Stimulus Money Starts Flowing to Schools

Some grant money already headed to schools; states have to apply for $54 billion more.

by / April 3, 2009

Editor's Note:
This story was originally published online by Converge magazine, a sister publication of Government Technology that focuses on technology in education. Pictured at left: U.S. Education Secretary Arne Duncan

States and school districts will start seeing stimulus money trickle into their bank accounts because Education Secretary Arne Duncan released the first round of funds Wednesday.

The Education Department has $98 billion in stimulus funds, some of which will go to the Office of the Inspector General, and will make $44 billion available to states now.

Existing formulas that are based on census data determine how much each school district will receive of the $11.4 billion in grants for the Elementary and Secondary Education Act Title I, Individuals with Disabilities Education Act (IDEA), vocational rehabilitation and independent living. The Title I grants help schools that have a high percentage of low-income students while the IDEA grants help schools teach students with disabilities.

Budget Buoys on the Way

An additional $53.6 billion slice of the education dollars will help states stabilize their budgets, but they have to apply for the money to receive it. State governors can now fill out an online application for the initial grants, which include a $26.6 billion pot of pre-K through higher education money and a $6 billion discretionary pot that they can use for public safety, other government services or education.

Duncan plans to send stabilization dollars to states within two weeks of approving their requests and said that he thinks governors will spend the money wisely. But he also warned in a Maryland press conference that states will not receive any more stabilization funds if they do not find innovative and creative ways to improve education with their initial funds.

"Ultimately we're really going to hold states accountable for investing in children and using these scarce dollars to dramatically improve school achievement," Duncan said.

Schools in each state have to commit to four reforms -- setting high academic standards, improving teacher quality, turning low-performing schools around and using more comprehensive data systems -- that the American Recovery and Reinvestment Act of 2009 outlines in order to receive the funds. If they cash in on the first round of money and don't show improvement, they won't qualify for $5 billion in incentive funds or the second round of stabilization funds.

"This is not a menu," Duncan said. "This is not 'I'll take two out of three or, you know, three out of four.'"

They also have to keep funding for K-12 and higher education at least at the same level as 2006 for the next three fiscal years. Duncan can waive this requirement for states that can't meet it if they show that their percentage of education funding has stayed the same or increased.

Wanted: One National Standard

Duncan argued that states need to create high standards and assessments that will prepare students for college and careers as well as make them competitive with their international peers. He said he wants states to use the same formula for reporting test scores and other data.

"The idea of 50 states each individually doing their own thing has lead to a race to the bottom," Duncan said. "We want to reverse that and create this race to the top."

Other education secretaries have tried to force states to adhere to a unified standard before, but the states haven't bought into it. States have the constitutional right to control education locally.

Then-Education Secretary Margaret Spelling announced in October that states have to calculate

their high school dropout rates the same way by 2013. Although the states do not have to adhere to this policy, they will likely come close to reaching a unified standard, said Jay Smink, the executive director of the National Dropout Prevention Center at Clemson University.

The important thing to remember, he said, is that the nation has a dropout problem, and it doesn't matter so much what the definition is or how many people dropped out.

"America's focus should be recognizing there's an issue," Smink said, "and then saying, 'OK, regardless of what the number is, we need to look for solutions.'"

Future Funding

The remainder of the state fiscal stabilization fund will be available later this year, including $13.1 billion for education, $2.9 billion for discretionary uses and $5 billion for states that show the best improvement. A second round of Title 1 grants and IDEA grants will also be available later this year.

Tanya Roscorla Former Managing Editor, CDE

Tanya Roscorla covered ed tech from 2009-2017.