$143 Billion in Emergency K-12 Education Funding Remains Unspent

During the pandemic, Congress and the U.S. Department of Education have awarded more than $150 billion in federal funding to state departments of education to reopen K-12 schools and address students’ needs while schools were closed. But new data from the Department of Education show that states have spent less than 6 percent of the emergency funds provided since March 2020.

As of May 31st, nearly $143 billion remained unspent. That’s enough to provide emergency grants worth more than $5,000 per child to 26 million children from low-income households. States will receive additional funding authorized by the American Rescue Plan later this year.

American students, particularly disadvantaged children, suffered significant setbacks during the 2020–21 school year due to prolonged school closures. Recent analyses by McKinsey and NWEA have found that children made less progress during the 2020–21 school year and that disadvantaged children were more negatively impacted by schooling disruptions.

The Centers for Disease Control and Prevention’s new guidance recommending “universal indoor masking for all teachers, staff, students, and visitors to schools, regardless of vaccination status,” highlights the possibility that American schools may face new disruptions during the upcoming school year. Policymakers have a responsibility to use currently available emergency funding to immediately help at-risk children.

States have spent 13 percent of 2020 emergency K-12 funds

Congress appropriated this emergency funding through three separate appropriations bills: the CARES Act in March 2020, the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act in December 2020, and the American Rescue Plan in March. Table 1 presents U.S. Department of Education data showing states’ expenditure of 2020 Elementary and Secondary School Emergency Relief (ESSER) funds as of May 31st.

Nationally, state education agencies have spent only 13 percent of 2020 ESSER funds. The rate of expenditure is higher for CARES Act funding with state education agencies spending 58 percent on average. But several states have been very slow to spend the emergency funding awarded at the beginning of the pandemic. Colorado, Maine, Maryland, New York and Vermont had spent less than one-third of their CARES Act funding as of May 31st.

Looking at the funding that Congress appropriated in December, states have spent a small fraction of CRRSA funds awarded. Nationally, states have spent just 2 percent of these ESSER funds. Seventeen state education agencies have not yet spent a dollar of their CRRSA ESSER funds.

Limited visibility into how states are using K-12 emergency funds

It is possible that states have spent more than these amounts. In March, the Government Accountability Office reported that the Department of Education’s system for tracking data may not accurately reflect the rate at which states and school districts are using these funds. GAO recommended that the Department of Education should

Regularly collect and publicly report information on school districts’ financial commitments (obligations), as well as outlays (expenditures) in order to more completely reflect the status of their use of federal COVID-19 relief funds. For example, Education could modify its annual report on state and school district spending data to include obligations data in subsequent reporting cycles.

But many states have not even complied with current federal reporting requirements. For example, the American Rescue Plan required that states submit ESSER plans to the Department of Education by June 7, 2021. But nine states (Arizona, California, Colorado, Florida, Maryland, Mississippi, Virginia, Vermont, and Wisconsin) have not yet submitted plans.

Analysts with McCourt School of Public Policy at Georgetown University studied states’ plans for spending their share of American Rescue Plan ESSER funds. They found that “at least two dozen” states were expanding tutoring options to help address learning losses from the pandemic. Several states are operating summer school programs using relief funds. New York is using emergency aid to expand universal prekindergarten for 4-year-olds. New Hampshire is using federal aid to fund “Recovering Bright Futures, which provides free learning pods, or small-group instruction, for K-8 students.” Brook LePage and Phyllis W. Jordan concluded that their review shows that “mental health initiatives, tutoring and comprehensive data systems for tracking student needs are likely to become increasingly prominent in public education.”

Congress needs more information about how states are using emergency education aid. As we explained last fall, Congress has a responsibility to conduct meaningful oversight to understand how and whether emergency funds were being used to reopen schools and address learning losses from school closures.

$143 billion in emergency aid remains unspent

Since March, the Department of Education has distributed neatly $86 billion in additional aid authorized by the American Recovery Plan. (This is two-thirds of what Congress authorized. The final third will be provided when the Department of Education approves states’ plans for spending ARP funding.) To date, 49 states have not yet spent a dollar of American Rescue Plan funding, according to the Department of Education.

Table 2 presents an overview of currently available unspent funds by state including funding appropriated in 2020 and 2021. In addition to statewide totals, the table shows how much is available per disadvantaged student (based on Department of Education data for the number of public school students eligible for the federal free and reduced school lunch program).

Unspent aid could provide grants worth $5,000 to low-income children

The $143 billion in currently available aid could be used to provide grants worth $5,000 or more to an estimated 26 million American children who are eligible for the federal free and reduced-price school lunch program. Providing direct aid in this manner could help ensure that disadvantaged children recover from learning losses that occurred during prolonged school closures last spring and during the 2020–21 school year.

A new McKinsey report shows that American children suffered significant learning setbacks:

The pandemic widened preexisting opportunity and achievement gaps, hitting historically disadvantaged students hardest. In math, students in majority Black schools ended the year with six months of unfinished learning, students in low-income schools with seven. High schoolers have become more likely to drop out of school, and high school seniors, especially those from low-income families, are less likely to go on to postsecondary education. And the crisis had an impact on not just academics but also the broader health and well-being of students, with more than 35 percent of parents very or extremely concerned about their children’s mental health.

A NWEA review of student test score data of 5.5 million children in grades 3 through 8 reached similar conclusions about the academic effects of schooling disruptions during the pandemic:

Achievement was lower for all student groups in 2020–21; however American Indian and Alaska Native (AIAN), Black, and Latinx students, as well as students in high-poverty schools were disproportionately impacted, particularly in the elementary grades we studied.

A learning loss grant worth $5,000 or more per child could be used to purchase extensive tutoring. It could also be used to form a “pandemic pod” or to pay for private school tuition during the upcoming school year, particularly if public school systems operate remotely.

Under current law, state education agencies are required to provide the vast majority of relief funding directly to school districts through the Title I funding formula. Therefore, it is unlikely that many school districts will choose to use funds in this manner. However, Congress could amend current law to expand the allowable uses of how these funds may be spent. Alternatively, the Department of Education could grant broad waivers to encourage states and school districts to award learning loss grants.

Importantly, states do not need to wait on Congress, the Department of Education, or even use federal funding to improve students’ learning opportunities. In 2021, more than a dozen states created or expanded programs to increase education choice options for parents.

Conclusion

The 2020–21 schooling disruptions during the 2020–21 school year were avoidable. As my colleagues and I at FREOPP wrote in July 2020, the personal and public health risks to children from COVID-19 were less than the widely-recognized risks of closing schools. School leaders’ decision to close schools for prolonged periods reflected a decision to prioritize the interest of adults working in K-12 public school systems over the children these systems are intended to serve.

The United States cannot afford to repeat this mistake during the 2021–22 school year. Using currently available emergency education relief funding to immediately benefit disadvantaged children would be an important step to promote equal opportunity and to begin to address learning losses caused by prolonged school closures.