March 26, 2020
Members of the Senate worked through the weekend on a bipartisan, nearly $2 trillion “economic rescue” bill that passed the Senate, and is expected to quickly pass the House of Representatives and be signed into law. The bill includes everything from emergency spending on hospitals and airlines, to big pots of aid to workers who have been laid off, to dollars to help states cope with the economic and public health crisis. Education, from early education on up through higher education and workforce training, has been drastically affected by the coronavirus crisis, and it has a big part in the emergency spending bill, including some funding for education technology. However, the bill includes relatively smaller amounts of funding to address the needs of households with little to no access to high-speed Internet, even though students in schools and colleges around the country are expected to learn online from home. We’ve teamed up across New America’s Education Policy Program to explain what’s included -- and what’s next for the field.
The proposal includes $3.5 billion for the Child Care Development Block Grant (CCDBG) that subsidizes child care for families with low incomes. These funds are intended to provide continued payment and assistance to child care providers that experience decreased enrollment or closure due to the pandemic as well as help providers reopen their programs if they’re forced to close. The proposal encourages, but does not require, states, territories, and tribes to place conditions on payments to providers to ensure that they continue to pay the salaries and wages of staff. The money is also designated to be used to provide child care to essential workers, including health care employees, emergency responders, and sanitation workers without regard to the usual income eligibility requirements.
The proposal also includes $750 million for making payments under the Head Start Act and specifies that up to $500 million of these funds can be used to operate supplemental summer programs by existing grantees determined by the Office of Head Start to be ready to operate those programs. Additionally, child care providers with fewer than 500 employees are eligible for small business loans of up to $10 million, of which eight weeks’ worth of mortgage/rent, payroll, and utility payments will be eligible for loan forgiveness. Early education advocates have been pushing for a total of $50 billion in relief amid predictions that over half of the early education workforce could end up unemployed due to state-imposed closures and declining enrollment related to the pandemic.
Education Stabilization Fund
The proposal includes a $30.75 billion fund, to be spent over the next 18 months, to provide emergency funding for education. Just shy of 10 percent of the grant will be awarded to governors who apply for the funding, with a 60-40 split between a population count (ages 5-24) and the K-12 student headcount. Those grants can be used for K-12 schools or for higher education, as needed. The remaining funds must be spent by states between K-12 and higher ed: 43.9 percent (about $13 billion) to school districts, awarded to states based on their current Title I allocations, and 46.3 percent (around $14 billion), mostly sent directly to colleges through a formula that awards three-quarters of the dollars based on Pell student enrollment for those not exclusively in online education, and the last quarter based on non-Pell student enrollment. States must promise to meet a “maintenance of effort” requirement for both K12 and higher education (including state spending on appropriations and student aid), which consists of maintaining the average funding from the last three fiscal years for the next three fiscal years — likely to be a challenge for many states as the country heads toward a recession. The law says the Secretary of Education can waive this requirement, and there will likely be a strong push for her to do so.
The Elementary and Secondary School Emergency Relief Fund will largely be delivered as subgrants to local education agencies (LEAs) who will have latitude in deciding how to use the funds. The allowable activities include: purchasing educational technology, planning for how to provide technology for online learning during closures, coordination of preparedness and response efforts between LEAs and other governmental agencies, giving school leaders resources to address the needs of their schools, activities to support the needs of special populations (e.g. English learners, low-income, students with disabilities, homeless students), purchasing supplies and training LEA staff on how to sanitize school buildings and other facilities, mental health services and planning for summer instruction either online or in person with attention to students with disabilities, English learners, low-income students, migrants students and other vulnerable groups. Any funding that is not used (within one year) must be returned to the U.S. Department of Education so that it can be reallocated to other states.
The Institute of Museum and Library Services will receive $50 million to “prevent, prepare, and respond to coronavirus,” which could include grants to states, territories and tribes to expand digital network access, purchase Internet-accessible devices, and provide technical support services. This relatively small pot of funds appears to be among the few provisions in the bill that could be used to improve residents’ access to the Internet and potentially lessen the costs of going online, unless the LEA funds above are used to purchase and distribute devices like Wifi hotspots and employ other services to bring households online. Addressing digital divide issues is critically important as schools and universities make plans for students to learn online from home. The “homework gap” was already affecting low-income students who, prior to the crisis, were relying on Wifi access at libraries and fast-food restaurants. The IMLS funds would be available until September 30, 2021.
While the funding may help ease pain in the short-term, it likely will not be enough to stave off the economic impacts of a recession. During the 2008 recession, teachers were laid off at high rates and state funding for education dropped causing sharp cuts to educational programs and services. The real costs will be felt next year when budget cuts occur at the same time that students return to school needing extra support and resources to make up for lost learning during the spring and summer. The effects will be worse for poorer students, who will need the most catch-up support but are more likely to be in districts that have made the deepest cuts to staffing.
The grants to higher education can go to schools across all sectors—including for-profit schools. Colleges are required to use at least half of the dollars provided through this bill to give emergency grants to students—for things like living costs, healthcare, child care, and technology—with discretion to use the other grants largely as needed. That’s good news for a field that’s experiencing both huge losses, as many colleges close down for the semester (and maybe longer), and new expenses, as colleges rapidly transition to remote learning. But it runs the risk of misuse by for-profit schools. And for many schools, it likely won’t be enough, especially for public colleges that experience big budget cuts from their states; looking ahead, a state-federal partnership that helps cover states’ budgets in the short-term but encourages states to reinvest in good economic times will be critical to guaranteeing access to an affordable college education for more.
The bill includes “national emergency education waivers,” which give the Secretary authority to waive requirements for states related to assessments, accountability, and related reportings in ESSA. A limitation states that nothing in this provision should be construed to allow the Secretary to waive any statutory or regulatory requirements under civil rights laws. However, it further directs the Secretary to prepare and submit a report to Congress within 30 days to recommend additional waivers under the Individuals with Disabilities Education Act. While school closures will make it difficult for schools and districts to provide equal instruction to all students, waiving obligations to support these students will put them further at risk and ultimately cost more to provide the additional services these students will need when schools reopen.
The proposal also strives to protect teachers who were recipients of TEACH grants from unintended consequences during this time of unprecedented school closures. TEACH grants act as no-cost loans that prospective teachers can use to fund their higher education, with the promise that recipients who fulfill a service obligation of teaching in a high-need area in a low-income school for at least four years will have their TEACH grant loan debt forgiven. The bill would ensure that TEACH grant recipients whose work is interrupted or reduced for some period of time during this emergency situation still get credited for that time as part of fulfilling their service requirements. It also gives the Secretary broad authority to modify the categories of extenuating circumstances under which a TEACH grant recipient may be excused from fulfilling some portion of their service obligation. These are common-sense measures that will help fulfill the intent of the TEACH grant program, and ensure that the teachers can focus on serving our highest-need students instead of worrying about the status of their service obligation. New America has also called for the Department of Education to improve systems for the administration and servicing of TEACH grants more broadly.
The proposal addresses the needs of student borrowers who might be struggling now, or who might face additional hardship in the coming weeks and months. All federally held student loan payments would be suspended through September 30th, relieving borrowers of their payments in this time of uncertainty. (Borrowers from the old bank-based system, for some reason, would be excluded from these benefits — likely to lead to major confusion for borrowers who think they’ll get the benefit automatically.) The proposal also makes those forbearances interest-free, codifying a policy announced by President Trump earlier this month that avoids interest accrual and allows borrowers who want to continue repaying to make more progress toward their existing principal. To eliminate possible confusion later, this proposal would “count” this time of non-repayment towards loan forgiveness programs like income-driven repayment and Public Service Loan Forgiveness (PSLF). In addition, the months of forbearance would also “count” toward qualifying rehabilitation payments for borrowers trying to get out of default on their loans. For borrowers already in default on their loans, the legislation would end collections practices like wage garnishment and offsetting tax refunds for the same six-month period. A major challenge for the Education Department moving forward, though, will be clearly and consistently communicating this to borrowers, before they’re placed back in repayment and wind up delinquent or in default.
The Senate proposal also addresses the needs of existing students and colleges and universities. Outside of the new money sent directly to institutions, there is now some flexibility with the existing funds. For instance, institutions would no longer have to provide matching funds for their campus-based aid programs except for work-study jobs with for-profit employers; and Historically Black Colleges and Universities and minority-serving institutions could repurpose their grant aid under the Title III and V programs for those schools. Institutions would also be able to move some of their work-study dollars to Federal Supplemental Educational Opportunity Grant (SEOG), and use SEOG funds to provide emergency grants to students who might be in need, like the ones made available through the education stabilization fund described above. Colleges could also pay students their Federal Work-Study dollars even if they are not able to work in their work-study jobs right now.
Workforce and Workers
The stimulus bill includes a number of measures aimed at softening the impact of COVID-19 on the millions of Americans who have lost their jobs due to the pandemic.
One of the most important provisions is a massive expansion of the amount and extent of eligibility for unemployment compensation (UC). States that enter into agreements with the federal government could receive funding to provide Federal Pandemic Unemployment Compensation: an additional $600 per week for workers whom the state deems eligible for UC, no matter how small that initial benefit might be. The bill specifically covers workers whose jobs or families are affected by COVID-19, as well as those who might otherwise be ineligible for UC because they are self-employed or have exhausted their benefits. And the maximum duration of UC eligibility would extend to 39 weeks, a huge increase on the amount currently available in many states.
The proposed bill also provides support for an important alternative for companies considering mass layoffs. Short-Time Compensation (STC) is a type of work-sharing arrangement, designed to encourage employers to keep employees on their payroll at reduced hours instead of laying them off entirely. Under STC, states use regular UC funds to pay a part of the hourly wages an employee loses during a downturn; while these funds usually come from both federal and state payroll taxes, under the Senate stimulus bill these job-saving arrangements would be fully federally funded through this year, and sweetened by an employee retention tax credit. New financing would also be made available to encourage the 24 states that have no STC laws to give the model a try, and an additional expansion grant program would help to increase the number of companies that use it.
Finally, the bill includes several provisions related to growing the health care workforce. But although the bill provides welcome reauthorization of funding for the development of innovative training models for physicians and nurses, there is much more work to be done to allow jobseekers to easily enter and advance through health care career paths.
Note: This post was revised on 3/26/2020 at 1:30 PM to correct an error in the K-12 Education section regarding waivers the Secretary may use. The waivers apply only to certain aspects of the Every Student Succeeds Act.
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