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What Congressional Covid Funding Means for K-12 Schools

screen-shot-2020-10-01-at-8-38-38-pm(Updated 10/18) The coronavirus outbreak has upended the way schools are operating, and the pain could continue through this school year and beyond, as tax revenue losses will likely bring sharp cuts in education funding. Recognizing this, Congress dedicated some of its $2 trillion March stimulus package, known as the CARES Act, to supporting education, including $13.2 billion for K-12 schools.

In the coming week, lawmakers will decide whether to advance a new relief package before the Nov. 3 election or wait until later to provide more aid for schools, governments and unemployed families. House Speaker Nancy Pelosi  said Sunday she would give the White House 48 hours, until Tuesday, to negotiate a package. On the Senate side, Majority Leader Mitch McConnell has said he will bring a smaller relief package up for a vote on Wednesday.

On Oct. 1, the House approved a  $2.2.trillion aid package, a scaled-down version of the HEROES Act, after failing to reach agreement in negotiations with the White House. While talks were expected to continue, President Donald Trump tweeted on Oct. 6 that he had instructed his team to end negotiations until after the  election. Since then, he has reversed course and is now calling for a big relief package. Treasury Secretary Steve Mnuchin has offered a $1.8 trillion proposal, but Senate Republican leaders have expressed reluctance to spend that much.

The House bill includes a total of $225 billion for education, $208 billion of that for stabilizing budgets. That includes $175 billion for K-12 schools, $27 billion for higher education, $2 billion for Bureau of Indian Education-funded schools and Tribal Colleges and Universities, and $4 billion for governors to split. Another $5 billion in grants would go toward improving K-12 facilities, including school ventilation systems. And $11.9 billion would go toward helping colleges and universities address pandemic-related challenges. An analysis by The Learning Policy Institute estimates how much each state could receive, ranging from nearly $22 billion for California's K-12 schools to $262 million for Wyoming's.

The revised HEROES Act garnered no support from GOP House members, and Senate Republicans have shown little interest in a comprehensive deal, saying they want to spend no more than $1 trillion on the next aid package. McConnell said the bill the Senate will consider this week will look a great deal like the $500 billion package that it rejected in September.

That measure, which failed to muster the needed votes on Sept. 10, would provide about $100 billion for education, with  two thirds of K-12 aid reserved for schools and districts with in-person classes. The $500 billion package would also support private schools with proposals for a two-year pandemic tax credit program to pay tuition scholarships, extra dollars to expand state tax credit voucher programs, and permission for parents to use 529 savings accounts to pay for homeschooling costs. The U.S. Department of Education would set up and administer a web portal for scholarship opportunities under the bill's provisions. With 52 of 53 Republicans voting for the bill, but no Democrats, the measure failed to receive the 60 votes needed to move forward.

Earlier in September, a court decision effectively blocked a controversial Education Department rule requiring public school districts to share more of the federal Covid aid with private schools. On Sept. 4, U.S. District Judge Dabney Friedrich in Washington, D.C., ruled  that Education Secretary Betsy DeVos misinterpreted Congress's intent when she drafted an interim rule for how CARES Act dollars should be spent.

"In enacting the education funding provisions of the CARES Act, Congress spoke with a clear voice...," wrote Friedrich, a Trump appointee to the court. "Contrary to the Department’s interim final rule, that cannot mean the opposite of what it says."

Judge Friedrich's ruling in the case filed by the NAACP came after federal judges in Washington state and California issued preliminary injections. While it was unclear whether these rulings blocked DeVos's actions nationwide, Friedrich's summary judgment effectively shuts down the interim rule. The U.S. Education Department website now reflects that the rule is no longer in effect, and on Sept. 25, DeVos sent a letter to state education leaders telling them the department would not pursue the policy any further.

She encouraged state leaders to find ways to support private schools. "More broadly, the truth remains that all schools and all students have borne the pandemic’s burden and need support," she wrote. "We hope, through meaningful consultation and honest assessment, education leaders will do right by all students they serve.

Meanwhile, a key provision allowing school districts greater flexibility in providing meals to students and families has been extended until through September 2021, under a provision in the continuing resolution approved by Congress and signed by President Donald Trump. The measure, which keeps the federal government running, also provides $8 billion in nutritional programs for low-income families and children. Schools have been allowed to use summer rules for meals programs, which means that families can pick up food at locations around the community, and community organizations can receive federal reimbursement for the support they provide.

Trump announced a series of executive actions in early August that would provide some relief for unemployed workers and cut some payroll taxes. None of his actions would lead to alloting any new money for education.

The GOP Senate bill reflected many of the same proposals as  $1 trillion bill released by Republicans in late July proposing $70 billion for K-12 schools. The emphasis on reopening schools came after Trump and U.S. Secretary of Education Betsy DeVos spoke about cutting federal aid for schools that don't reopen for in-person instruction—or shifting those dollars to schools, public or private, that do reopen. The bill also provides $29 billion for higher education and $5 billion for governors to use at their discretion.

[Read More: How Governors Are Spending Their CARES Act Education Dollars]

The House already passed a $3 trillion stimulus bill, known as the HEROES Act, on May 15 that includes $1 trillion for state and local governments, something that is not included in the Senate Republican bill. Senate Democrats offered a $430 billion education and childcare spending package on June 30.

The House measure provides $90 billion for the U.S. Department of Education to share with states in a stabilization fund—65 percent of it for K-12 schools and 30 percent for higher education institutions. That's triple the amount that Congress has provided for education so far, but well below the $250 billion that 70 education organizations recommended. Beyond education spending, the House-approved measure would also bolster support for Medicaid, which provides health coverage to 37 percent of school-age children.

Senate bill that Democrats introduced in late June would include $345 billion for education: $175 billion for K-12 schools, $132 billion for higher education and $33 billion to be distributed by the governors. That measure never received a vote. On July 17, presumptive Democratic nominee Joe Biden weighed in with a proposal for a separate, emergency $30 billion boost to help K-12 schools reopen safely. He also voiced support for passing the HEROES Act and launching a challenge to close equity gaps laid bare by the pandemic.

[Read More: Roadmaps to Reopening: States' Guidance to Schools]

In addition to the Covid aid bill, some Republican senators are also pushing to send more federal dollars to private schools: A bill introduced July 22 would designate about 10 percent of the Covid-19 aid to an emergency fund that would help parents pay private school tuition or home-schooling costs. The money would flow through designated scholarship granting organizations. The bill, sponsored by Republicans Tim Scott of South Carolina and Lamar Alexander of Tennessee, would also allot as much as $5 billion annually in tax credits for private school scholarships. Funding for that proposals was not included in the original Senate Republican proposal, but a two-year tax credit was included in the September version.

CARES Act

The stimulus bill that passed in late Marchcovid-19-funding-to-support-students-2, known as the Coronavirus Aid, Relief, and Economic Security Act or CARES Act, earmarks $30.7 billion under an Education Stabilization Fund for states to spend on education, including $13.2 billion for the Elementary and Secondary School Education Relief Fund and $14 billion for Higher Education Emergency Relief Fund. Another $3 billion goes to the Governors Emergency Education Relief Fund, which governors can use for “significantly impacted” school districts or higher education institutions.

The U.S. Education Department has released estimates of how much money each state should receive, ranging from $32 million in stabilization funding for K-12 education in Wyoming to $1.6 billion in California. (see full chart below) Under the governors discretionary funding, New York will have $164 million to spend, while Rhode Island will have less than $9 million. In California, EdSource has calculated how much each of the state's school district could receive. The CARES Act money must be spent by September 2022.

An analysis by the Association of School Business Officials International and the Superintendents Association suggests that a typical school district could spend nearly $2 million to reopen schools, given increased need for cleaning and transportation costs.

The law list 12 allowable uses of the $13.2 billion in the package's K-12 relief fund:

  1.  Any activity authorized by the ESEA of 1965, including the Native Hawaiian Education Act and the Alaska Native Educational Equity, Support, and Assistance Act, the Individuals with Disabilities Education Act, the Adult Education and Family Literacy Act, the Carl D. Perkins Career and Technical Education Act of 2006, or subtitle B of title VII of the McKinney-Vento Homeless Assistance Act.
  2. Coordination of preparedness and response efforts of local educational agencies with state, local, Tribal, and territorial public health departments, and other relevant agencies, to improve coordinated responses among such entities to prevent, prepare for, and respond to coronavirus.
  3. Providing principals and others school leaders with the resources necessary to address the needs of their individual schools.
  4. Activities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth, including how outreach and service delivery will meet the needs of each population.
  5. Developing and implementing procedures and systems to improve the preparedness and response efforts of local educational agencies.
  6. Training and professional development for staff of the local educational agency on sanitation and minimizing the spread of infectious diseases.
  7. Purchasing supplies to sanitize and clean the facilities of a local educational agency, including buildings operated by such agency.
  8. Planning for and coordinating during long-term closures, including for how to provide meals to eligible students, how to provide technology for online learning to all students, how to provide guidance for carrying out requirements under IDEA and how to ensure other educational services can continue to be provided consistent with all Federal, State, and local requirements.
  9. Purchasing educational technology (including hardware, software, and connectivity) for students who are served by the local educational agency that aids in regular and substantive educational interaction between students and their classroom instructors, including low-income students and students with disabilities, which may include assistive technology or adaptive equipment.
  10. Providing mental health services and supports.
  11. Planning and implementing activities related to summer learning and supplemental afterschool programs, including providing classroom instruction or online learning during the summer months and addressing the needs of low-income students, students with disabilities, English learners, migrant students, students experiencing homelessness, and children in foster care.
  12. Other activities that are necessary to maintain the operation of and continuity of services in local educational agencies and continuing to employ existing staff of the local educational agency.

The CARES Act includes an additional $100 million in grants under Project SERV, which is dedicated to helping school districts and post-secondary institutions recover from “a violent or traumatic event that disrupts learning.” That pot of money can support distance learning, as well as mental health counseling and disinfecting schools.

Microgrants and Private Schools

In addition, U.S. Secretary of Education Betsy DeVos released new details on April 27 about the $180 million "Rethink K-12 School Models" competitive grant program, which will focus on helping states and families with virtual learning and the needed technology particularly during the Covid emergency. She encouraged states to develop innovative models "not yet imagined" for providing remote education. That could include directing the money to parents to pay for tutoring, counseling or summer programs that would keep students learning. It would also allow for creating a statewide virtual school.  Congressional critics slammed the grant program as a backdoor approach to providing vouchers to parents who want to educate their children at home or in private institutions.

DeVos acknowledged as much in a May 19 interview on SirusXM radio, saying the funding could allow parents to send their children to faith-based schools. “For more than three decades that has been something that I’ve been passionate about. This whole pandemic has brought into clear focus that everyone has been impacted, and we shouldn’t be thinking about students that are in public schools versus private schools.”

Congressional Democrats have also questioned the methodology for choosing which states receive the discretionary grants does not necessary benefit communities most affected by the coronavirus outbreak. In a May 15 letter , House Education and Labor Committee Chairman Bobby Scott, D-Va., called on DeVos to rescind the proposal and to develop new metrics for distributing grant funds.

Even as she pushed for reopening schools, Devos announced July 29 that she is awarding $180 million in grants to 11 states to support virtual coursework, training for remote instruction, and electronic devices. DeVos announced grants ranging from $6 million to $20 million to 11 states: Georgia, Iowa, Louisiana, Maine, North Carolina, New York, Rhode Island, South Carolina, South Dakota, Tennessee, and Texas. Several states, including Rhode Island and Texas will enhance their virtual coursework offerings, which could benefit students from shuttered schools as well as homeschoolers. New York will put the bulk of its money toward training teachers in remote instruction, while Louisiana sets aside some of its grant providing devices and internet hotspots for 12,000 students. South Carolina is exploring a way to deliver remote instruction without internet access.

Private school funding was a point of contention in the Spring after the U.S. Education Department developed guidance and then an interim rule on how CARES Act dollars should be shared with private schools. screen-shot-2020-09-08-at-4-48-49-pmThe interim rule that took effect in early July back tracked somewhat on the department's initial guidance, giving more latitude to districts. In addition, at least four governors have devoted some of CARES Act discretionary funds to tax-credit scholarships for private schools, and other allow private schools to compete for grants.

DeVos's interim rule, now blocked by a federal court ruling, allowed districts to treat the money as Title I aid, giving it only to schools serving low-income students in both the public and private sector, but it would be subject to Title I rules. That would have limited how districts could use it to fill gaps left from state cuts.

On August 21, a federal judge in Washington state put a temporary hold on DeVos's rule, agreeing with state officials that sharing more federal aid with private schools could cause "irreparable harm" to public schools. "The Department's claim that the State faces only an economic injury, which ordinarily does not qualify as irreparable harm, is remarkably callous, and blind to the realities of this extraordinary pandemic and the very purpose of the CARES Act: to provide emergency relief where it is most needed," Judge Barbara Rothstein wrote in her opinion.

On August 26, a federal judge in the Northern District of California issued a similar ruling blocking implementation in a lawsuit filed by Michigan, California, Hawaii, Maine, Maryland, New Mexico, Pennsylvania, and Wisconsin; the District of Columbia;  an school districts in New York City, Chicago, Cleveland and San Francisco. "The Department may prefer to give CARES Act funds to private schools more generously than Congress provided, but it is Congress who makes the law, and an 'agency has no power to ‘tailor’ legislation to bureaucratic policy goals by rewriting unambiguous statutory terms,'” U.S. District Judge James Donato Donato wrote in issuing his temporary injunction.

And on Sept. 4, a federal judge in Washington, D.C. issued a summary judgment effectively invalidating DeVos's interim rule nationwide. U.S. District Judge Dabney Friedrich ruled that the education secretary overstepped her authority and misinterpreted what Congress intended for the CARES Act funding. "The interim final rule was not “necessary” to accomplish the statute’s unambiguous directive—indeed, it went far beyond that directive by interpreting the statute to require a different formula," Friedrich wrote.

[Read More: The Challenge of Taking Attendance in Remote Learning]

Typically Title I dollars can flow to private school students for "equitable services," such as tutoring, if the students are deemed low achieving and live in an attendance zone for a Title 1 public school. The initial guidance called for school districts  to provide these services, including materials and equipment, to any students and teachers in non-public schools, regardless of whether the students are low-achieving or live in the right attendance zones. The share for private schools would have to be proportionate to the share of all students in the district attending such schools.

Students with Disabilities

Beyond the new money allotted, The Education Department is offering states more flexibility in how they spend their existing money, with release of a template for requesting waivers. This could allow schools to spend more of the federal dollars on technology for distance learning.

While the CARES Act gives the DeVos broad authority for waiving accountability requirements, lawmakers stopped short of allowing waivers for special education rules and gave DeVos a month to report her recommendations to Congress. In an April 27 report, she did not recommend any waivers for the "core tenets" of the federal law that requires providing services for students with disabilities. She did suggest flexibility on time lines for evaluation to ensure that toddlers with disabilities don't lose the support they need.

Schools are grappling with how to deliver services—such as physical or occupational therapy—or meet timelines set in individualized education plans (IEPs) required under federal law. Or even how to get the required signatures for IEPs. Some districts initially declined to provide instruction to any students because they could not address the needs of those with disabilities. The U.S. Education Department discouraged that sort of thinking.

Child Nutrition

Another important aspect of student health is nutrition. The Families First Coronavirus Response Act, approved in mid-March, provides greater flexibility for schools to serve free meals beyond the school grounds. Some schools are allowing families to pick up food at community centers or using school buses to deliver meals. The measure also allows student who qualify for free and reduced-price meals to receive benefits from the Supplemental Nutrition Assistance Program (SNAP).

The CARES Act provides $18.5 billion toward SNAP and $8.8 billion for child nutrition programs.  The stimulus bill approved by the House in mid May would allot another $10 billion toward SNAP and $3 billion to child nutrition programs.

The House bill passed in May would increasee SNAP’s maximum benefit by 15 percent from June 1, 2020 through September 30, 2021, an increase for all SNAP households averaging about $25 per person per month. Republicans HEALS Act proposed in late July provides no new dollars toward addressing hunger for children or adults.

The continuing resolution that Congress passed to keep the government running provides another $8 billion for child nutrition programs and extends the flexibility for school meals through September 2021.

The Next Aid Package

The $3 trillion stimulus bill approved by House Democrats on May 15, known as the Health and Economic Recovery Omnibus Emergency Solutions or HEROES Act, would direct $1 trillion to state and local governments and provide $90 billion specifically for education. The bill also provides $1.5 billion for an Emergency Connectivity Fund at the Federal Communications Commission (FCC) for Wi-fi hotspots,  equipment, connected devices, and advanced telecommunications and information services at libraries and schools. Another $4 billion in FCC funding would go toward expanding broadband service, which could support remote learning, as well.

On June 30, Democratic Sens. Patty Murray of Washington and Chuck Schumer of New York introduced the Coronavirus Child Care and Education Relief Act. Its $345 billion stabilization fund includes $175 billion for K-12 schools to address learning loss, put in place health protocols and education students "in-person, remotely or a hybrid of both." It would enact a "maintenance of effort" requirement, basically prohibiting states from their funding of schools for at least three years. I

Neither bill received a vote in the Senate.

[Read More: How Federal Covid Aid Can Support Students and Schools]

Senate Republicans took a different approach, providing no dollars for filling revenue gaps in state and local governments, which are key sources of funding for K-12 schools. Their bill focused more on the debate over school reopening.

The measure, known as the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, calls for states to distribute one third of the stabilization money to districts within 15 days of receiving it from the federal government. Much of that money could go toward reopening priorities, such as providing masks, increasing cleaning services and adding more school buses.

For the remaining two thirds, school districts must submit plans to the governor providing a detailed timeline for providing in-person instruction, a description of how many days of such instruction students will receive each week, and an assurance that district will provide "as much in-person instruction as is safe and practicable."

After more than a month of negotiations, Senate Republicans released a slimmed-down version of their bill, dealing only with  education funding, liability protections and unemployment benefits. The bill with its private school choice provisions garnered no support from Democrats, leaving it without the votes to advance in the Senate.

On Oct. 1, the House passed a narrower version of their HEROES Act, approving $2.2 trillion in aid, with $225 billion dedicated to schools. The bill garnered no Republican votes.

In addition to direct stimulus funding, a $1.5 trillion infrastructure package that the House approved July 1 includes about $100 billion in grants and $30 billion in bond authority over five years for school projects, focusing on schools with concentrated poverty and including dollars to improve distance learning and help meet public health guidelines for reopening after Covid-19. A recent analysis predicts that preparing for reopening schools could cost about $1.7 million for an average school district. The infrastructure package would also support  expanding broadband, which would ensure more students have internet access for distance learning. The bill now goes to the Senate, where Majority Leader Mitch McConnell, R-Kentucky, has already criticized the measure.

School districts could also apply for federal dollars to support homeless students under a bill submitted June 10 by U.S. Sens. Lisa Murkowski (R-AK), Joe Manchin (D-WV), and Krysten Sinema (D-AZ). The Emergency Family Stabilization Act would create aa funding stream administered by the Administration for Children and Families within the U.S. Department of Health and Human Services.

Student-Based Health Care

With more than 120,000 schools nationwide shuttered for the foreseeable future, millions of students have lost access to an important source of health care. As school districts and health providers cobble together solutions, Congressional funding and new regulatory flexibility could  deliver some needed support.

 A key source of funding for the school-based health care is Medicaid, which covers 37 percent of school-age children and reimburses $4 billion to $5 billion in services at schools annually. That figure has increased in recent years after a 2014 regulatory change allowed schools to seek reimbursement for services provided to all eligible children.

The Families First Act temporarily increases the federal match to states for Medicaid. To receive those extra dollars, states must commit to maintain current eligibility standards and premiums and to limit disenrollment. The HEROES Act would increase the federal match again and block regulations that could effectively cut Medicaid, reports Edwin Park of the Georgetown University Center for Children and Families.

Read More: How the Health and Education Sectors Can Collaborate]

Beyond legislative efforts, federal authorities are granting wide latitude on billing Medicaid for using telehealth to deliver services and urging states to expand offerings. This allows students to receive special education services or visit health providers virtually, using a smart phone or computers, without risking a visit to an office or hospital.

State Medicaid programs can reimburse these providers for telehealth services just as they do for in-person visits without obtaining federal approval, the Centers for Medicare and Medicaid Services (CMS) explained in a recent release. That said, some states have restrictions on what services must be delivered in person, especially for students with disabilities.

The legislation passed so far will hardly be Congress's last word on education funding. Members of Congress and education leaders are already contemplating how to support K-12 schools in future stimulus bills.

[Read More: Tracking State Legislation on the Coronavirus]

U.S. Education Department Allocation Calculations

The CARES Act requires that at least 90 percent of the Elementary and Secondary School Emergency Relief Fund flow to local education agencies, with no more than 10 percent reserved for the state agency, and a fraction of that for administrative costs. The totals in the chart below are rounded.

State Total for School Relief Minimum for LEA Maximum for SEA Maximum for Administration Total for Governors  Fund
U.S. 13.2 B 11.9 B 1.3 B 66 M 2.9 B
Alabama 217 M 195 M 22 M 1 M 49 M
Alaska 38 M 35 M 3.8 M 192,000 6.5 M
Arizona 227 M 249 B 27 M 1.3 M 69 M
Arkansas 129 M 116 M 13 M 643,800 31 M
California 1.6 B 1.5 B 165 M 8.2 M 355 M
Colorado 121 M 109 M 12 M 604,900 44 M
Connecticut 111 M 100 M 11 M 555,300 27 M
Delaware 43 M 39 M 4.3 M 217,500 7.9 M
D.C. 42 M 38 M 4.2 M 210,000 5.8 M
Florida 770 M 693 M 77 M 3.9 M 174 M
Georgia 457 M 411 M 46 M 2.3 M 106 M
Hawaii 43 M 39 M 4.3 M 216,900 9.9 M
Idaho 48 M 43 M 4.8 M 239,300 15.7 M
Illinois 569 M 513 M 57 M 2.8 M 108 M
Indiana 214 M 193 M 21 M 1 M 61 M
Iowa 72 M 64 M 7.1 M 358,100 26 M
Kansas 85 M 76 M 8.4 M 422,600 26 M
Kentucky 193 M 174 M 19 M 965,000 44 M
Louisiana 287 M 258 M 29 M 1.4 M 50 M
Maine 44 M 39 M 4.3 M 218,900 9.3 M
Maryland 208 M 187 M 21 M 1 M 46 M
Massachusetts 215 M 193 M 21 M 1 M 51 M
Michigan 390 M 351 M 39 M 1.9 M 89 M
Minnesota 140 M 126 M 14 M 700,700 43 M
Mississippi 170 M 153 M 17 M 849,400 35 M
Missouri 208 M 187 M 20 M 1 M 55 M
Montana 41 M 37 M 4.1 M 206,500 8.8 M
Nebraska 65 M 59 M 6.5 M 325,400 16 M
Nevada 117 M 105 M 12 M 585,900 26 M
New Hampshire 38 M 34 M 3.8 M 188,200 8.9 M
New Jersey 310 M 279 M 31 M 1.5 M 69 M
New Mexico 109 M 98 M 11 M 542,900 22 M
New York 1 B 933 M 104 M 5.2 M 164 M
North Carolina 396 M 357 M 40 M 1.9 M 96 M
North Dakota 33 M 30 M 3.3 M 166,500 5.9 M
Ohio 489 M 440 M 49 M 2.4 M 105 M
Oklahoma 161 M 145 M 16 M 804,800 39 M
Oregon 121 M 108 M 12.1 M 605,500 33 M
Pennsylvania 524 M 471 M 52 M 2.6 M 104 M
Rhode Island 46 M 42 M 4.6 M 231,800 8.7 M
South Carolina 216 M 195 M 22 M 1 M 49 M
South Dakota 41 M 37 M 4.1 M 206,500 7.9 M
Tennessee 260 M 234 M 26 M 1.3 M 64 M
Texas 1.3 B 1.1 B 129 M 6.4 M 307 M
Utah 68 M 61 M 6.8 M 339,100 29 M
Vermont 31 M 28 M 3 M 155,700 4.5 M
Virginia 239 M 215 M 24 M 1.2 M 67 M
Washington 217 M 195 M 22 M 1 M 57 M
West Virginia 86 M 77 M 8.6 M 433,200 16 M
Wisconsin 175 M 157 M 17 M 873,900 47 M
Wyoming 33 M 29 M 3.3 M 162,800 4.7 M
Puerto Rico 349 M 314 M 35 M 1.7 47 M
Source: U.S. Education Department. For notes on methodology, see the emergency relief fund calculations and governor's fund calculations.