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From ESSA to American Rescue Plan: How K-12 School Districts Can Use Funding

In this guide, you'll learn about the three emergency relief packages, and read best practices in managing and allocating K-12 education funds for 2022 and beyond.


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How is K-12 education funded?

Funding for public K-12 education in the US comes from three main sources: local, state, and federal governments, with the lion’s share of the funding coming from localities and states. Education funding is supported by local property taxes and general taxes collected by state and federal governments. 

The total spend by public K-12 schools topped $750 billion during the 2018-19 school year, the most recent year for which data is available. Not including interest on debt and capital expenditures, the average per-pupil spend was just over $13,000 for the nation’s 48 million public school students. About one-third of the total spend, around $240 billion, went to instructional salaries. 

Because the tax base varies widely across individual districts, a large portion of state and federal funding is directed to shoring up underfunded districts and students with disabilities or those from low-income households. Despite the efforts of states and the federal government to deliver more equitable outcomes, significant disparities in spending remain. Annual per-pupil spending ranges from a low of around $8,000 in some states to as high as $25,000. 

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While state and local funding increased nearly 40% between 2011 and 2019, federal funding declined steadily during that period. In 2019, state and local governments provided just over 45% of total funding, while the federal government provided around 9%.

However, COVID has reversed the trend, with major new programs to help districts address learning disruptions, cover the increased costs associated with safety, and address the increase in long-standing equity gaps exacerbated by the pandemic. The major new sources of funding include: 

  • Coronavirus Aid, Relief, and Economic Security (CARES) Act. Allocates around $13.2 billion to K-12 education. Funds must be designated for a specific purpose by September 30, 2022.

  • Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, Includes an additional $54 billion for K-12 education. Funds must be designated for a specific purpose by September 30, 2023.

  • American Rescue Plan (ARP) Act. Provides another $123 billion for K-12 education. Funds must be designated for a specific purpose by September 30, 2024.

COVID funding comes in addition to normal annual grants, the majority of which is made available through the Every Student Succeeds Act (ESSA), which in 2015 replaced the No Child Left Behind Act (NCLBA). ESSA includes the following five funding categories: 

  • Title I — Improving Basic Programs Operated by State and Local Education Agencies. Designed to close achievement gaps by funding personnel, instruction, and interventions for economically disadvantaged students. 

  • Title II — Preparing, Training, and Recruiting High-Quality Teachers, Principals, or Other School Leaders. Support for the professional development for teachers, principals, and other educational professionals.

  • Title III — Language Instruction for English Learners and Immigrant Students. Designed to support English language learners (ELLs) achieve English proficiency and excel academically. 

  • Title IV — 21st Century Schools. Includes both grants and assistance programs meant to support needs of students and enhance family engagement.

  • Title V — Flexibility and Accountability/Rural Education and Achievement Program. Gives states and districts the flexibility to use funds to meet their unique needs.  

The other major source of federal funding for K-12 public schools is the Individuals with Disabilities Education Act (IDEA), which supports free public education and related services appropriate to children with disabilities.

How can schools use the new sources of federal education funding?

Thanks to the CARES, CRRSA and ARP programs passed in 2020 and 2021, US public schools will get around $190 billion in additional federal funding over the next several years. Collectively, the new funding is often referred to as Elementary and Secondary School Emergency Relief (ESSER). According to federal guidelines, state legislatures and education departments can provide guidance about spending ESSER funds and inquire about plans, but the ultimate decisions are up to districts.

In addition to direct help for districts, CARES and CRRSA also granted funds directly to state governors. Called the Governor’s Emergency Education Relief (GEER) fund, the program gives governors a large amount of discretion over those funds, though they must still adhere to general guidelines.

Like so much during the COVID epidemic, the changes in funding have occurred so quickly that there has been a great deal of confusion. Some districts have received as much as $20,000 per student. Others have gotten little or none. You can consult the EducationWeek database to find out what your district is receiving.

Mitigating Pandemic-Related Learning Loss

Districts have a large degree of flexibility in the ways they use ESSER funds. However, at least 20% of ARP funds must be devoted to addressing pandemic-related learning disruptions—for example, large-scale, evidence-based initiatives like high-dosage tutoring (HDT).

Other options for learning-loss mitigation include new or expanded services for students with disabilities, social-emotional learning programs, increased communication with families and home visits, and assessments.

Other Ways to Spend ESSER Funds

In addition to addressing pandemic related learning loss, other acceptable use of funds include:

  • Education technology, including both devices and connectivity
  • Mental health services
  • Professional development
  • Curricular planning
  • After-school programs
  • Structural improvements in facility to improve air quality and other measures to prevent COVID transmission
  • Nutrition
  • Other approved uses for funds under the Every Student Succeeds Act (ESSA) and other federal programs.
Note that, while not strictly prohibited, investment in new construction is discouraged.

Federal funding is here to support urgent K-12 priorities, including learning recovery.

What is the process for managing new federal ESSER funds?

Districts must report on ESSER spending directly to the Education Department, though they are not required to report specific, measurable outcomes in order to receive funds, as is the case with ESSA and other standard federal funding programs.

The Department of Education also requires state education departments to perform oversight over district spending. While the oversight process is not set in stone, states have largely been following one of the following processes:

  • Review of applications and related budgets before they have been officially approved.
  • Review of spending before reimbursing district.
  • A more rigorous process of ongoing financial monitoring.
In addition, the federal government plans to audit districts receiving more $750,000 in federal funds. In the future, there may also be audits performed by the inspector general’s office of the US Department of Education as well as the US Congress’s Government Accountability Office (GAO).

How can school districts best allocate ESSER funds for the coming year?

Because of the flexibility in the ways they can spend incoming federal and state funding, districts are having to make big decisions on how best to serve their students.

These one-time sums come with significant responsibility. Districts must strategically leverage funds to address immediate student needs while also laying the groundwork for long-term systemic improvements. 

Here are some of the principal ways they are prioritizing their spending for the 2021-22 school year:

  1. Evidence-based learning acceleration. Schools are both implementing high-dosage tutoring (HDT) programs and extending learning times through internships, summer and after-school programming, and project-based learning. Research has consistently shown HDT programs to be one of the most effective ways to accelerate learning—principally, programs that use evidence-based criteria for success. Learn more about funding high-dosage tutoring at your school district.

  2. Digital infrastructure investment. While the pandemic forced districts to expand access to devices and connectivity, the digital divide has not gone away. “We need to get into a “let’s do something about it” mode and find ways to get every student a reliable device, find a way to get every student no matter where they’re at in this country access to reliable internet in their home. Funding is desperately needed to knock down this barrier. This is a must,” says Marlon Styles, Jr., Superintendent at Middletown City School District in Ohio. The Emergency Connectivity Fund (ECF), part of the ARP Act, provides $7.17 billion to help districts purchase devices, Wi-Fi hotspots, modems, and routers. By supporting anytime, anywhere learning, ed tech tools can deliver significant value and personalization to school communities post-pandemic. Learn how district leaders are optimizing their district’s tech infrastructure, as well as managing total cost of ownership.

  3. Data and diagnostic systems. Measuring holistic needs will be critical for the 2021-22 school year and beyond, given the declines in engagement and the effects of disparities in students’ home circumstances. Instructionally relevant assessments include: student and family surveys; universal social, emotional, and behavioral health screening; and digital tools to track student engagement and progress.

  4. Whole-child and family supports. The COVID-19 pandemic has caused major disruption for students of all kinds. However, effects of the pandemic on English learners, students of color, low-income students, and students with disabilities have been even more stark. NWEA and the American Association of School Administrators (AASA) have provided guidance on delivering targeted support for students with disabilities, students experiencing homelessness, and ELL support.

  5. Reconfigured learning. Distance learning and other emergency measures during the pandemic have forced schools to become much more creative in terms of when, where, and how learning can take place. In the process, they have discovered ways to use technology both at school and home to increase equity and accelerate learning. From Massachusetts and New York to Texas and California, districts are embracing evidence-based methods to reimagine how and how students attend school.

  6. Educator support. Just like their students, teachers have been overwhelmed by the demands and dislocations of COVID, and they too need holistic support in 2021-22. Districts around the country are responding by providing staff wellness and self-care sessions, as well as socioemotional support and tech tools that alleviate stress and enhance their ability to serve students.

  7. Inclusive practices. As study after study has shown, the pandemic exacerbated existing inequities related to race and socioeconomic status. In response, districts are investing in practices that are inclusive, identity-safe, culturally responsive. The Alliance for Resource Equity recommends that education leaders ask three questions: Does each student have access to strong teachers? Does each student have access to teaching practices that are engaging, culturally relevant, and standards-aligned? Does the teacher workforce reflect student diversity

  8. Real-world preparation. Only 52% of students feel high school readied them for today’s workforce. To better prepare students for the 21st-century economy, districts can invest in teaching higher-order skills like self-direction, relationship skills, and a growth mindset. In addition, doubling down on early childhood education can make a big difference in real-world preparation—especially for English learners and children from low-income households. “We're focusing on funding pre-AP, so every child in seventh, eighth, and ninth grade has access to strategies for success. We're also funding opportunities like International Baccalaureate, building up our CTE programs through our corporate partnerships, and increasing the number of college partnerships for dual enrollment and college,” says Dr. Lindsa Mcintyre, Secondary Superintendent at Boston Public Schools.

Navigating federal funding in 2022

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