One solution to this problem would be to give students at overwhelmed schools vouchers to attend better schools. This is the preferred conservative solution. Hope and Despair extols the benefit of a very different approach, implemented for many years in Raleigh, N.C.: merge the urban and suburban school districts to make sure that no school is overwhelmed by having too many of its students living in poverty. The goal was (Raleigh has since abandoned this) to make sure that the schools were all truly mixed. In other words, this should be called the common schools approach. Each school would reflect the community at large.
In dealing with poverty, there are three basic approaches: cash transfers, vouchers or other targeted benefits, and government provision of services. Welfare payments and the earned income tax credit (EITC) count in the first category. Food stamps (SNAP), Medicaid, section 8 housing vouchers, and school vouchers (only implemented in a few places to date) would count in the second category. Free government-run hospitals or clinics would count in the third category. (Technically, Canadian-style, single-payer health care is in the second category, since doctors are still private contractors, not government employees.) Any public housing projects would count in the third category. Also, our current school system would count in the third. Yes, we have a socialized primary and secondary school system, America. After reading many articles from Slate's Matthew Yglesias, I think there are a lot of inefficiencies created, in general, by a voucher system (he has not talked about this specifically to my knowledge, but he has talked about the exclusion created in schools by zoning). Specific to education, I cannot understand with voucher plans where all the students are supposed to go. How many students will actually be ABLE to transfer with their voucher? Same question with charter schools. It seems a far better bet to work to improve the public schools, and Hope and Despair is the first evidence I have read of a whole school district -- not just one school with a charismatic principal but a whole district! -- being able to make dramatic, measurable, sustainable improvements.
Here is another article to this effect. And another one. And yet another. There was a great article in The Atlantic about Louisville, KY's efforts. And an article from the Washington Post.
School districts entrench segregation. Wealth of an area tracks closely with its reading scores. This American Life has a wonderful two-part series on integration: part 1, part 2. Here's another good article on school segregation levels and one on academic performance.
A recent article in the Atlantic is fantastic on how integration in the North was not accidental but intentional:
Describing opposition to busing as something other than resistance to school desegregation was a move that obscured the histories of racial discrimination and legal contexts for desegregation orders. In covering school desegregation in Boston and other Northern cities, contemporary news media took up the busing frame, and most histories of the era have followed suit. Americans' understanding of school desegregation in the North is skewed as a result, emphasizing innocent or unintended "de facto segregation" over the housing covenants, federal mortgage redlining, public-housing segregation, white homeowners associations, and discriminatory real-estate practices that produced and maintained segregated neighborhoods, as well as the policies regarding school siting, districting, and student transfers that produced and maintained segregated schools. Understanding the history of school desegregation in Boston and other Northern cities makes it clear that so-called "de facto" residential and school segregation in the North were anything but innocent.
The most damning part is that Northern sponsors of the 1964 Civil Rights Act inserted language to the effect that desegregation was race-blind assignment of students to schools, not purposefully balancing schools by race. That meant challenges to redlining and the like could be deflected by pointing to the Civil Rights Act!
An article on voluntary integration efforts. More. Integration by socioeconomic status and charter schools.
One interesting proposal: change college admission standards to favor integrated schools, to create an incentive for parents to demand integration.