Happy First ARRA-versary!

One year ago today, President Obama signed the American Recovery and Reinvestment Act (ARRA) into law. This economic stimulus bill included nearly $100 billion for education programs including Title I grants to local education agencies, Pell Grants, the Individuals with Disabilities Education Act, and a new program called the State Fiscal Stabilization Fund.

Since then, $69.7 billion has been obligated to states and school districts and $33.2 billion of those funds have been disbursed for expenditure (47.6 percent).

Additionally, according to data reported by recipients of ARRA funds, education funds have saved or created nearly 410,000 jobs including nearly 240,000 from State Fiscal Stabilization Funds alone. Based on these numbers, education funds have saved or created more jobs than any of the other non-education programs funded by the ARRA.

However, the ARRA has dealt a mixed hand to some states and school districts according to recent reports. Dramatic one-time increases in funds that will disappear at the end of fiscal year 2010 or 2011 are likely to create significant funding-cliffs for many schools. This means that teachers and other school staff whose salaries have been primarily supported by ARRA funds could be out of their jobs in a year or two. This will also likely be the case for public institutions of higher education that have come to depend on ARRA funds to provide basic services.

Additionally, provisions in the programs funded by the ARRA have allowed for some unintended consequences. For example, a provision in the Individuals with Disabilities Education Act (IDEA), which received $11.7 billion in ARRA funds, allows school districts that receive dramatic increases in funds to redirect state and local funds of up to half the size of those increases to general education purposes if they qualify under state guidelines. As a result, school districts around the country have lowered state and local expenditures on special education, a trend that will likely weaken special education spending in the future.

Beyond these formula-based programs, the ARRA also created two competitive grant programs intended to increase and encourage innovation at the state and local level: $4.35 billion for Race to the Top and $650 million for Investing in Innovation. While funds for both of these programs have yet to be distributed, they have both made significant ripples in the existing education landscape.

At this point, it’s still too early to tell whether the ARRA has positively affected education in the United States. But it is unlikely that American public schools and institutions of higher education will see another investment of federal dollars of the same size and magnitude. Let’s hope it will result in more progress than waste.