LINDSAY -- At the Lindsay Unified School District, a second-grader can be doing fourth-grade work while a fellow second-grader gets one-on-one help to make the grade.

Here, children progress at their own pace, regardless of their grade level. It's called performance-based learning, and it's a growing trend in education.

Lindsay learned Monday that it's one of only four districts in California to be named a finalist for federal Race to the Top education improvement funds. Its innovative program might have given the rural district a leg up in the competition.

"I think it would certainly draw the attention of the judges in the U.S. Department of Education," said John Fensterwald, editor of EdSource Today, an online news site dealing with California education.

Personalized learning is one of the government's priorities in the Race to the Top program, Fensterwald said. "Performance-based learning certainly complements and fits into that focus very much."

Lindsay Unified Superintendent Tom Rooney has no trouble trumpeting the system. "People learn in different ways and they learn in different time frames," he said.

But he wasn't gloating. The district still must compete against 60 other districts that made the list of grant finalists announced by the Department of Education.

Lindsay applied for $10 million of the $400 million up for grabs. The Department of Education will award four-year grants of $5 million to $40 million to 15 to 25 districts by the end of this year.

One of Lindsay's competitors is Galt Joint Union Elementary School District, a kindergarten-eighth grade district with an enrollment of about 4,000 located between Stockton and Sacramento. Also making the cut: New Haven Unified School District, a 13,000-student district south of Hayward, and Animo Charter Schools in Southern California.

Galt has a lot of similarities to Lindsay, besides its small enrollment. It applied for $10 million in Race to the Top funds and the district's focus is personalized education. "The intent, I believe with this grant, was really looking at system change to personalize the learning environment to make students college- and career-ready," Superintendent Karen Schauer said.

Rooney is confident Lindsay has a strong application, and its inclusion as a finalist put him at "another level of hopeful" Monday evening.

Making the final cut is a significant step for the 4,100-student district surrounded by orange groves in Tulare County. The district beat out much larger competitors in the San Joaquin Valley, including Fresno, Clovis, Sanger and Central unified districts.

Lindsay Unified introduced performance-based learning four years ago to ninth-graders and expanded it this year to every grade level, making it a pace-setter. "It's just beginning to gain speed" nationwide, Rooney said.

School officials from districts across the country visit Lindsay schools to study the education system. In January, officials from Kenowa Hills, a 3,500-student school district in Grand Rapids, Mich., will be in the city, said Rick Schreiber, co-founder of Re-Inventing Schools Coalition, an Alaska-based nonprofit that helped Lindsay develop its program.

Lindsay's history with the learning method could have played into the district's ranking with Race to the Top judges, Schreiber said.

The judges would have known "they're already well along the path, and that this grant award would allow them to further develop what they're doing and would allow other districts across the country to take that information and apply it to their organizations," he said.