Where’s My Stimulus Money?

It’s on its way.

Over the weekend, the Department of Education released guidelines for the implementation of the American Recovery and Reinvestment Act (ARRA, or the “stimulus bill“), which includes nearly $100 billion in funding for PK-16 education.

Department of Education funding for early education will come through three programs: the State Fiscal Stabilization Fund, Title I funding, and IDEA. Note: we are still waiting for more information from the Department of Education, which plans to issue further guidelines in the coming weeks on how states can use ARRA funds for early childhood. The Department of Health and Human Services also has yet to release new information on ARRA funding for early education programs under its remit (including $2.1 billion for Head Start and Early Head Start and $2 billion for the Child Care Development Block Grant.)

State Fiscal Stabilization Fund

The State Fiscal Stabilization Fund (SFSF) is a one-time appropriation of $48.6 billion to states to help them maintain funding for education at FY 2008 or FY 2009 levels. Of these funds, 61 percent will be distributed according to the state’s school age population (defined as age 5 to 24) and the remaining 39 percent will be based on relative shares of total population. An additional $5 billion will be distributed to states as incentive challenge grants, bringing total SFSF funding to $53.6 billion.

SFSF funds will be awarded to states in two phases. As part of application for phase one funds (67 percent of total), states must assure that they will take actions in accordance with the four core principles of AARA, including “increase teacher effectiveness and address inequities in the distribution of highly qualified teachers,” and “establish and use pre-K-through-college and career data systems to track progress and foster continuous improvement.” The application for phase one funds will be available by the end of March, after which states are promised money within two weeks of application. Second-phase funds will be awarded beginning July 1, 2009.

How SFSF funds may be used for early education is still unclear. The guidelines say that 81.8 percent of SFSF funds must be used for elementary, secondary, higher ed and “as applicable, early childhood education” and we are pleased to see pre-k included in the incentive to build longitudinal data systems. But the guidelines also say the funds “must be run through the state’s primary elementary and secondary education funding formulae.” This means that publicly funded pre-K programs that are not included in state funding formulae may be left out. The remaining 18.2 percent of SFSF funds can be used for other education and government services, including “assistance for early learning.”

Title I

In its conference report, Congress indicated that some ARRA Title I funds should be used for early childhood. To that end, the Department includes among the examples of uses of Title I funds:

“Strengthen and expand early childhood education by providing resources to align a district-wide Title I pre-K program with state early learning standards and state content standards for grades K-3 and, if there is a plan for sustainability beyond 2010-11, expanding high-quality Title I pre-K programs to larger numbers of young children.”

Again, we are pleased to see the Department emphasize PreK-Third alignment and program sustainability. Along with President Obama’s remarks today about boosting quality in early education, this is a sign that the Department is headed in the right direction. Earlier this week, we recommended adding pre-K to the 20 percent set-aside of Title I funds that are currently reserved for school choice and SES.

States will automatically receive 50 percent of their ARRA Title I funds by the end of March. The department expects that the remainder of the funds will be available between July 1, 2009 (which coincides with the first allocation of regular FY 2009 Title I funding) and September 30, 2009, conditioned on states providing assurances on how they are using the funds, including for stated ARRA goals like the PK-College data system

IDEA

The stimulus conference bill appropriates $12.2 billion to IDEA Part B (special education), including $400 million for preschool and $500 million for infants and families (IDEA Part C). The guidelines also emphasize that the rest of the $11.3 billion appropriated to IDEA Part B can include efforts to “expand the availability and range of inclusive placement options for preschoolers with disabilities by developing the capacity of public and private preschool programs to serve these children.”

Like Title I funds, 50 percent of IDEA Parts B and C will be available by the end of this month, with the remainder of Part B funds sent to states in late summer 2009 (phase two of Part C is not specified) after states have given the department information on how they will use the funds.

For more about how these guidelines impact K-12 and higher education, see here.