Education in the Stimulus
Blog Post
Jan. 14, 2009
After weeks of speculation about education's place in the stimulus bill, details are finally emerging. Today, the House Committee on Appropriations released a summary of the "American Recovery and Reinvestment Act of 2009." As expected, it includes funding for school modernization, aid to states for K-12 education, and a number of other programs from early childhood to higher education. It also includes an increase in the maximum Pell Grant.
Overall the proposed stimulus bill includes $550 billion for targeted programs and $275 billion in tax cuts. We calculate that of the total $825 billion in the stimulus bill, at least $68 billion is dedicated to education-related programs. While this is a small proportion of the overall total, it is a massive amount of new funding for education.
Here are some of the proposals included in the bill that distribute funds to education over two years.[i] Appropriations for FY 2008, where available, are provided in parentheses:
21st Century Classrooms
- School Construction: $20 billion total -- $14 billion for K-12 and $6 billion for higher education -- for renovation and modernization, including technology upgrades and energy efficiency improvements.
- Charter School Facilities: $25 million to help charter schools build, obtain, and repair facilities.
- Education Technology: $1 billion for 21st century classrooms, including computer and science labs and teacher technology training ($267.5 million in FY 2008).
Higher Education
- Pell Grants: $17.1 billion to increase the maximum Pell Grant to $5,350 ($16.3 billion in FY 2008).
- College Work-Study: $490 million to support undergraduate and graduate students who work ($980.5 million in FY 2008).
- Student Loan Limit Increase: Increases limits on unsubsidized Stafford loans by $2,000.
- Student Aid Administration: $50 million to help the Department of Education administer surging student aid programs while navigating the changing student loan environment.
K-12 Education
- IDEA Special Education: $13 billion for formula grants to increase the federal share of special education costs and prevent these mandatory costs from forcing states to cut other areas of education ($10.9 billion in FY 2008).
- Title I Help for Disadvantaged Kids: $13 billion for grants to help disadvantaged kids in nearly every school district and more than half of all public schools reach high academic standards ($13.9 billion in FY 2008).
- Statewide Data Systems: $250 million for competitive grants to states to design and develop data systems that analyze individual student data to find ways to improve student achievement and provide teachers and administrators with effective tools ($48.3 million in FY 2008).
- Education for Homeless Children and Youth: $66 million for formula grants to states to provide services to homeless children including meals and transportation ($64.1 million in FY 2008).
- Improving Teacher Quality: $300 million, including $200 million for competitive grants to school districts and states to provide financial incentives for teachers and principals who raise student achievement and close the achievement gaps in high-need schools and $100 million for competitive grants to states to address teacher shortages and modernize the teaching workforce ($2.9 billion in FY 2008).
- Impact Aid: $100 million for school construction in communities that lack a local property tax base due to non-taxable federal lands such as military bases or Indian reservations ($1.2 billion in FY 2008).
Early Childhood Development
- Child Care Development Block Grant: $2 billion to provide child care services for an additional 300,000 children in low-income families ($6.8 billion in FY 2008).
- Head Start: $2.1 billion to provide comprehensive development services to help 110,000 additional children succeed in school ($2.1 billion in FY 2008).
- IDEA Infants and Families: $600 million for formula grants to help states serve children with disabilities age 2 and younger ($435.7 million in FY 2008).
In addition to these programs, other parts of the stimulus bill also benefit education. For example, $1.5 billion for energy sustainability and efficiency grants to helps school districts, institutes of higher education, local governments, and municipal utilities implement energy efficient projects. Similarly, the stimulus provides $4 billion for job training including formula grants for adult, dislocated worker, and youth services (including $1.2 billion to create up to one million summer jobs for youth). The summary also notes an additional $79 billion in state fiscal relief, but it is unclear what this includes.
The summary is not complete and only represents the spending side of the stimulus. Of particular note is a change in the student loan subsidy from commercial paper to LIBOR. For more information, see this post.
The education specific proposals combined present a significant amount of funding do help alleviate the fiscal pressures states and schools are currently facing. Nearly one third of the funds will go to renovation and construction of school facilities, building infrastructure that students will be able to use for years to come. The other two thirds are dedicated to specific programs aimed at higher education, K-12, and early education. The three largest of these investments go to Pell Grants, NCLB Title I, and IDEA special education. Each of these programs aims to improve access to quality education for disadvantaged populations including low-income and disabled students.
With a deepening recession and economic indicators that continue to foretell tough times ahead, we hope this is enough to put education stakeholders on the road to recovery. Still, we have a few questions about the details of the plan:
- How will IDEA funds be distributed to states? Will it be based on population? Cost of living? Amount currently spent on IDEA services? Will districts with under-served populations received additional aid?
- Will states that are particularly struggling with budget cuts be favored in the distribution of funds?
- What does this spending mean for the FY 2009 budget, which has yet to be finalized three months into the fiscal year?
As further details unfold on the stimulus bill, we will keep you posted!
[i] Specifics are given only for those programs specifically listed under education in the summary. For more details, please see http://appropriations.house.gov/pdf/PressSummary01-15-09.pdf