Department Releases Education Stimulus Guidelines

Earlier this week the Department of Education released its first set of Stimulus guidelines for states and local education agencies. The four documents provide general information about the stimulus and details on the application process for State Fiscal Stabilization Funds, Title I Stimulus funds, and IDEA Stimulus funds. Below, we summarize some of those details.

Overarching Goals

Each document introduces the Stimulus guidelines in the context of four main goals for the use and impact of stimulus dollars. The first goal, “spend funds quickly to save and create jobs,” encourages states and LEAs to rapidly plan out spending that will have the greatest impact on the economy. The second states that dollars should be used to improve student achievement by setting college- and career-ready standards, creating Pre-K through college data systems, improving teacher effectiveness and distribution, and supporting schools identified as in need of improvement. The third goal requires “transparency, reporting, and accountability” in the distribution and use of stimulus funds. The final goal asks that states and LEAs use new funding in “thoughtful” ways that do not create large decreases in funding or “cliffs” when the stimulus runs out.

The main introductory document provides a timeline for the distribution of funds under each program in the stimulus. The timeline is as follows:

End of March 2009

• At least 50 percent of Title I funds distributed (>$5.0 billion)
• At least 50 percent of IDEA Part B funds distributed (>$5.9 billion)
• 67 percent of State Fiscal Stabilization Funds distributed (as long as an application has been approved) ($32.6 billion)
• 50 percent of IDEA Part C funds distributed ($250 million)[1]
• 50 percent of Vocational Rehabilitation State Grants distributed ($270 million)[2]
• 100 percent of Impact Aid distributed ($100 million)
• 100 percent of Independent Living Services funds distributed ($140 million)
• 100 percent of McKenney Vento Education for Homeless Students funds distributed ($70 million)

July 1, 2009

• Pell Grants distributed ($17.1 billion)
• Remaining State Fiscal Stabilization Funds distributed ($16 billion)

Fall of 2009

• Title I School Improvement Grants distributed ($3 billion)
• Educational Technology State Grants distributed ($650 million)
• Teacher Incentive Funds distributed ($200 million)
• Teacher Quality Enhancements funds (grants?) distributed ($100 million)
• Statewide Data Systems funds/grants distributed ($250 million)

By October 1, 2009

• Remaining Title I funds distributed (<$5.0 billion)
• Remaining IDEA Part B funds distributed (<$5.9 billion)

State Fiscal Stabilization Fund

The document related to the State Fiscal Stabilization Fund (SFSF) sets out a two step process by which states can apply for funds. The first step requires states to submit an application assuring that the state will commit to advancing the four goals outlined above, providing baseline data for the state’s current status in each goal, and describing how the state will use its funds. Once the Department of Education has accepted a state’s application, it will receive 67 percent of its stabilization funds within two weeks. However, states that demonstrate a need for more than 67 percent of their SFSF to avoid layoffs can request up to 90 percent of their funds immediately.

States must submit a more detailed application to receive the final 33 percent of its SFSF dollars. These applications must include how the state plans to achieve the four goals outlined in the guidelines and how the state will achieve the stimulus record-keeping and reporting requirements. The Department plans to distribute the second phase of funds starting July 1, 2009.

As we’ve discussed previously, the guidelines reiterate that 81.8 percent of the SFSF must be used for K-12 purposes authorized under NCLB, IDEA, Perkins Vocational Education, and the Adult and Family Literacy Act, early education purposes, or higher education purposes. The remaining 18.2 percent can be used for education purposes including school renovation and modernization, public safety, or other government services.

Title I

The guideline for the distribution and use of Title I stimulus funds describes the process by which states will receive funds. The initial 50 percent of Title I funds will be distributed under the states’ existing Title I applications, requiring no additional efforts on the part of states. The remaining funds are contingent upon each state submitting an amendment to its application detailing how they will achieve the recording-keeping requirements.

Approved uses for Title I stimulus funds outlined in the guideline include new teacher training programs, aligned PreK-Third programs, new online curricula, improved data systems, professional development, reading and math coaches, and extended learning activities.

The document also states that LEAs can apply SFSF funds towards the Title I maintenance of effort requirement. This provision obligates LEAs to maintain at least 90 percent of the previous year’s per student or aggregate expenditure. By allowing LEAs to use SFSF towards the maintenance of effort provision, the Department is giving LEAs permission to replace typically state and local funds with SFSF funds.

IDEA

Much like Title I stimulus funds, states will receive IDEA funds in two stages. The first stage will be based on the state’s existing IDEA application while the second will be contingent on an amendment to the application outlining record-keeping and reporting practices.

The guideline provides several suggested uses for these funds including assistive technology, professional development for special education teachers, new data systems, expanded opportunities for pre-school children, and job placement coordinators for disabled youth.

The document also encourages LEAs to take advantage of the IDEA maintenance of effort provision by using stimulus IDEA funds to replace state and local funds that would otherwise be used for special education purposes. However, these state and local funds must instead be used towards other education activities under NCLB or towards achieving the four goals described in the guidelines.

In Sum

States can expect to receive at least $44.3 billion by the end of this month. That is a significant chunk of change to help support struggling states and school districts. We hope that they will heed the Department’s guidelines and spend the money both quickly – for the greatest economic impact – and thoughtfully.

For a summary of how these guidelines impact early education, click here.

[1] The guidelines do not state when the other 50 percent of these funds will be distributed.

[2] The guidelines do not state when the other 50 percent of these funds will be distributed.