Call it learning in lean times: Many of the nation’s public schools have taken a hit as states grappling with the economic crisis have made drastic budget reductions, leading to education program cuts, deferred spending on facilities, and teacher layoffs. But with the passage of the federal economic stimulus bill — the American Recovery and Reinvestment Act, which provides some $115 billion in new education funding — financial help is on the way to the country’s 14,000 school districts.

Much of the money goes directly to state budgets

Nearly $80 billion will go directly to states, though governors will need to make assurances their states are meeting education-reform criteria to receive certain funds; the first round of money should be available within the next four weeks. What impact will this aid have on schools in your community? At this point, exact figures for local districts are unknown — estimates for several programs can be found on the U.S. House Committee on Education and Labor’s EdLabor Journal blog — and specific projects have yet to be approved, but here is an overview of the major education-related allocations.


Funds to prevent layoffs and program cutbacks

$53.6 billion for the State Fiscal Stabilization Fund

To address budget shortfalls in K-12 schools and higher education, the stimulus bill establishes a fund that will be disbursed by Education Secretary Arne Duncan. The bulk of the money, $39.5 billion, will go to state governments to prevent or reverse layoffs and program cuts. But because it will be distributed using existing funding formulas that rely on population data and therefore tend to favor bigger school districts and states with higher per-pupil spending, some districts may not reap as many benefits as others. According to the Ed Money Watch blog, published by the nonpartisan public policy institute New America Foundation, allocations will vary widely based on total stimulus funding per student and Title I (see below) funding per low-income student. Of the 50 largest school districts the blog analyzed, the Detroit City School District will receive the most in total stimulus dollars per student ($1,914) and Texas’s Cypress-Fairbanks Independent School District will receive the least ($240). “For many of these districts, particularly those with large impoverished populations,” writes Jennifer Cohen, “stimulus dollars may significantly increase their per pupil expenditures. How this money will be spent, however, is yet to be seen. That will be the true test of the stimulus package and its impact on education.”

As for private schools, at the states’ discretion they could receive money for services such as remedial math and reading instruction for disadvantaged students and support for special needs kids, but the funds cannot be spent on tuition and vouchers or modernizing private school facilities. Public charter schools that currently receive aid through funding formulas for Title I, the Individuals With Disabilities Education Act (IDEA, see below) and other programs should receive their share of stimulus money.

Rewards for states that help struggling schools and raise student achievement

The stabilization fund also features $4.35 billion in incentive grants and $650 million for an “innovation fund” to reward states that implement successful programs to help struggling schools, close student-achievement gaps, improve teacher quality and develop databases that track students’ progress.

Money for leaky roofs and other urgent needs

Finally, states will receive $8.8 billion for high-priority needs, which may include public-school-modernization projects such as repairing a damaged roof, installing security cameras or making a facility more energy efficient.

To receive their share of the stabilization money, states must demonstrate that they are developing the aforementioned tracking databases and assigning qualified teachers to low-income school districts, among other requirements. The funds will be allocated in cycles pending approval of states’ applications by the U.S. Department of Education.

Aid for low-income children

$13 billion for Title I grants

This money will support the Title I program under the No Child Left Behind Act, which helps schools with large numbers of economically disadvantaged students provide them a “fair, equal, and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging state academic achievement standards and state academic assessments.”

$100 million for food-service equipment

Under the National School Lunch Program, which provides free or reduced-price meals for low-income students, schools will be able to apply for competitive grants to purchase new food-service equipment.

Help for kids with special needs

$12.2 billion for special education

This funding will go to services for children with learning and other disabilities, provided under the Individuals With Disabilities Education Act.

$680 million for rehabilitation services and disability research

Of this amount, $540 million will go to state grants for programs that provide vocational counseling and assist high school students with disabilities transition from school to work.

Support for technology and aid to homeless students

$720 million for school-improvement programs

This includes $650 million to expand the use of technology in elementary and secondary schools and $70 million to provide meals, transportation and other aid to homeless students (whose numbers are increasing as more families lose their jobs and homes).

Grants for tracking student achievement

$250 million for developing tracking databases

These competitive grants will help states design data systems that allow schools to track individual students’ progress and provide teachers with tools for improving academic achievement.

Higher education

More money to help students pay for college

$15.8 billion for financial aid

This includes $15.6 billion for the Federal Pell Grant Program, which provides need-based grants to low-income undergraduates; the money will increase the maximum amount by $500 per student. Also, work-study programs for students who work part-time will receive $200 million.

$13.9 billion for the American Opportunity Tax Credit

This $2,500-per-person tax credit is available for college students for the next two years.

$60 million for student aid administration

This money will help the Department of Education manage programs that administer loans, grants and work-study awards.

Early-childhood education

Help for low-income kids

$2.1 billion for Early Head Start and Head Start

This will provide an additional 124,000 low-income kids with health, nutrition and education services, such as developing reading, math and other school-readiness skills, through these programs that already serve some 900,000 children.

More money for childcare

$2 billion for the Child Care Development Block Grant

This will extend childcare services to an extra 300,000 children from poor families.


Merit pay for teachers in high-need schools

$200 million for the Teacher Incentive Fund

This program supports efforts to develop pay-for-performance initiatives for educators in high-need schools.

Funding for teacher-training grants

$100 million for the Teacher Quality Partnership program

This money will support efforts to strengthen curriculum-preparation and teaching skills and increase opportunities for professional development.

Support for more math and science teachers and for better instruction

$100 million for the National Science Foundation

The foundation runs a scholarship program to support prospective science, technology, engineering and math teachers. Its Math and Science Partnership project focuses on improving K-12 students’ achievement in those areas.

School construction

Money to build and repair schools

$22 billion in school-construction bonds

This may go toward the construction or repair of public school facilities or toward the acquisition of land on which such a facility would be built.

$2.8 billion for Qualified Zone Academy Bonds

These bonds may be used only for repairing public schools, investing in new equipment and technology, developing course materials or training teachers; they may not be used for new construction.

$200 million for the National Science Foundation

The foundation also has a program to refurbish and improve academic research facilities.

$100 million in construction grants for Impact Aid districts

The Impact Aid Program provides support to local educational agencies in communities with a low property-tax base because of federal activities, including military bases and Indian reservations.

Guidance for states and school districts

How will officials crunch the numbers in a timely fashion? Education Department guidelines (see “Implementing the Recovery Act” and suggestions for one-time expenditures) will help states and school districts “move successfully forward,” says Gina Burkhardt, CEO of the education nonprofit Learning Point Associates. In addition, “governors and state superintendents have high-quality support being provided through organizations such as the Council of Chief State School Officers and the National Governors Association.”

To learn more about how the stimulus bill will benefit education programs state by state, visit the Council of State Governments’ economic-recovery website.

March 2009