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Education Receives Unprecedented Funding in American Rescue Plan Act

Concept meaning agree to give or allow something requested someone Authorize action.This blog post is written by AACTE consultant Jane West and is intended to provide updated information. The views expressed in this post do not necessarily reflect the views of AACTE. 

President Biden Signs Massive $1.9 trillion American Rescue Plan Act

On Thursday evening, just before a primetime address to the nation, President Biden signed into law the American Rescue Plan Act of 2021 (ARPA).

The House gave its final approval of the bill on Wednesday. Congressional Republicans, who voted en masse against the bill, have criticized the deal for funneling money to schools that haven’t offered in-person instruction despite earlier rounds of pandemic relief.

ARPA includes $122.8 billion for the Elementary and Secondary School Emergency Relief Fund (ESSER). ESSER funds will be distributed to states in the same way that the last two federal rescue packages were distributed: based on their relative Title I, Part A funding. The first $800 million of ESSER funding must be used by states to provide educational and wraparound services to students experiencing homelessness. The bill requires states to distribute the remaining $122 billion in the following manner :

  • Local Education Agencies (LEAs) ($109.8 billion): Ninety percent of funding will be distributed to districts based on their relative share of Title I, Part A funding.
  • Lost Learning Time ($6.1 billion): States must use at least 5% of their ESSER funding “to address learning loss by supporting the implementation of evidence-based interventions, such as summer learning, extended day, or extended school year programs, and ensure such interventions respond to students’ academic, social, and emotional needs and address the disproportionate impact of the coronavirus on [students of color, students from families experiencing low-incomes, students with disabilities, English language learners, migrant students, students experiencing homelessness, and students in foster care].”
  • After-School Programs ($1.2 billion): A minimum of 1% of state funding must be used for after-school programs that address students’ academic, social, and emotional needs.
  • Summer Enrichment Programs ($1.2 billion): At least 1% of funding must be used by states to provide students with evidence-based summer learning programs.
  • Administration Costs ($610 million): States can spend up to 0.5% of their funding on the costs of administrating this program.
  • Remaining State Funds ($3 billion): States will be allowed to use these funds on any of the allowable uses in the act.

LEAs will be required to use at least 20% of the funds they receive ($22 billion) to address lost learning time for students. They will have the freedom to spend the remaining 80% ($87.8 billion) of funding based on local needs and priorities. Senate Democrats are circulating a Congressional Research Service memo with estimates of Education Stabilization Fund totals for states and institutions of higher education (IHE). It breaks out funding by state for the K-12 fund, the non-public schools, and the higher education fund (by state and by type of IHE). The last pages aggregate each state’s total from all three emergency relief funds.  

In the final bill, a number of amendments approved by the Senate were included that increased funding for students with disabilities, students experiencing homelessness, and sought transparency in school district’s plans for reopening and addressing continuity of services.

  • As amended, the legislation provides $2.6 billion in additional funding for state special education grants under the Individuals with Disabilities Education Act (IDEA) for this fiscal year, which ends Sept. 30. In addition, the legislation provides $200 million for special education preschool grants, and $250 million for infants and toddlers with disabilities, both under the IDEA.
  • The Senate took $2.75 billion out of the House bill’s K-12 relief fund and earmarked it for private schools. Governors would allocate this money.
  • Maggie Hassan (D-N.H) offered an amendment that will ensure schools are transparent in their plans surrounding reopening and learning opportunities. The amendment says that within 30 days of receiving this new relief funding, school districts will have to publish “a plan for the safe return to in-person instruction and continuity of services.”
  • Lisa Murkowski, (R-AK) introduced an amendment that was agreed to by the Senate that provides $800 million help identify students experiencing homelessness, and to provide those students with wraparound services.

Other elements of the bill that are worth noting include:

  • States and schools must reserve roughly 25 percent of the stabilization fund for learning recovery (e.g. summer school and extended-day programs).
  • $350 billion is available for state and local governments.
  • $7 billion is available to help students and educators connect to the internet and provide them with connected devices, through the federal E-Rate program.
  • $39 billion will go to early-childhood programs, including Child Care and Development Block Grants and a stabilization fund for child-care providers.
  • Language in ARPA would punish states that want to enact/expand a new voucher tax credit by requiring them to pay back the equivalent amount of federal aid dollars as the tax credit they are issuing.
  • Families can claim up to $3,600 per child under age 6 and $3,000 for children up to age 17 for one year to help combat the economic damage of the pandemic. House Democrats are looking to make the tax change The current tax credit is up to $2,000 per child. 

The bill also includes about $40 billion for higher education—about half of which will go to emergency funding in grants to students. ACE President Ted Mitchell said that while the amount of higher ed funding “falls short of our most recent estimate of at least $97 billion in student and institutional needs, it still represents the largest federal effort so far to assist students and families struggling to cope with lost jobs or reduced wages and colleges and universities facing precipitous declines in revenues and soaring new expenses.” Additional funds will go to support Historically Black Colleges and Universities, Tribal Colleges and Universities, Hispanic-Serving Institutions, and other Minority-Serving Institutions. A provision is included in the bill that would exempt all student loan forgiveness from federal taxes for five years, perhaps paving the way for expanded student debt cancellation.

As I close, I offer a big shout out to one of our own—Kim Knackstedt—who has been named as the first White House Director of Disability Policy. With her Ph.D. in special education and several years of experience working on Capitol Hill, Kim is imminently qualified for this position.  I know you join me in congratulating her!

And a big thank you to Kaitlyn Brennan for her research and writing for this Washington Update.

Read the full Washington Update on my website for more information.


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Jane E. West

AACTE Education Policy Consultant

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