Stimulus Money for Schools Expected Soon

The checks from Uncle Sam will soon be in the mail. In fact, school districts might see some of the $100 billion from the economic-stimulus package within a few weeks. The U.S. Department of Education (DOE) will start to release money aimed at restoring cuts as well as funding programs for low-income and special education students by the end of March.

The major chunk for education comes from the $53.6 billion state stabilization fund, and states must submit applications for that money. About $32.5 billion of that amount goes out in this first round, and the applications will be available to governors by the end of March. Once states turn in their applications, they should get their share within two weeks.

Programs for low-income (Title I) and special education students (those served by the Individuals with Disabilities Education Act) get help even sooner. The $5 billion for Title I and $6 billion for IDEA will go out by the end of the month -- that's half the funds earmarked for those programs under the plan -- and states don't need to turn in applications for this money, the DOE reported over the weekend.

What It Means

The funds can't come soon enough. In Pontiac, Michigan, for example, the school district is considering laying off all its teachers and then calling back only those needed for the next school year. In the Mesa Public Schools, in Mesa, Arizona, 310 teacher positions could get cut.

The money will flow first to governors. It then goes out to districts as part of their share of state funding for education, based on their state's formulas for K-12 funding; there's no competition for this money.

From there, it's a case of just what each school system needs, and federal officials want districts and states to make plans for the funds as soon as they can. For instance, if a district does not need the money to prevent teacher layoffs, it might use this windfall to hire new staff.

"It's kind of like a Rubik's Cube. It's just going to vary from school district to school district," says Joel Packer, director of education policy and practice with the National Education Association. "It becomes almost like 15,000 sets of decisions, in a way."

The Requirements

To get the first batch of stabilization money, states have to agree to make key education improvements. To get the next round of money, expected between July and September, they have to show they've taken steps to achieving these goals. The improvements are raising academic standards (including better assessments for limited-English-speaking and special education students), more transparent data collection and reporting, better distribution of good teachers to low-performing schools, and investments to turn around the worst-performing schools. (These requirements are already part of the No Child Left Behind Act.)

As with all the money in the economic-stimulus package, the education money comes with reporting requirements: States must publicly report back exactly how they spent the money.

Other details on the release of the education money include the following:

• The nearly $5 billion innovation fund will start going out in the fall. The competitive state grants will be awarded in two rounds; the first begins in October. As part of that money, there's also $650 million that districts and nonprofit organizations can win. Applications and details on the grant process will be available later in the spring.
• The total that states get now is $44 billion; another $49 billion will start going out in July. But if states find they can't cover the essentials with the first round of money, they can get more money from the second round sooner.
• States can use about 18 percent of the stabilization money for line items such as school repairs and modernization, but the DOE wants states to conduct any renovations with an eye toward environmentally friendly construction.
• The $650 million for education technology won't be available until the fall.

The money also comes with a warning: It's a onetime cash infusion, so districts shouldn't try to finance programs that require future investments to continue. Education secretary Arne Duncan says officials need to find the "best way to stretch every dollar."

Alexandra R. Moses is a freelance writer in the Washington, DC, area who specializes in education.