Fiscal Report
Public Education's Point of Reference for Making Educated Decisions

$2.2 Trillion Federal Stimulus Package for COVID-19 Signed Into Law

A federal stimulus package, which seeks to provide some relief during the COVID-19 pandemic was adopted by the federal government this week. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a $2.2 trillion package that provides billions of dollars to struggling industries, boosts unemployment insurance, and provides cash payments directly to Americans. The stimulus package also earmarks approximately $31 billion for K–12 and higher education assistance and over $4 billion for childcare and early education programs. 

Some of the biggest items for K–12 education and early education include the following:

  • $13.5 billion in the Education Stabilization Fund, which will be distributed to states based on their state-level Title I allocation. States will pass through 90% of the funds to school districts and charter schools using the Title I formula. Funds can be used for coronavirus-response activities such as purchasing educational technology to support online learning, sanitation supplies, or mental health services, as well as additional activities authorized by federal elementary and secondary education laws (e.g., Elementary and Secondary Education Act [ESEA], Individuals with Disabilities Education Act [IDEA], Carl D. Perkins Career and Technical Education Act, or McKinney-Vento Homeless Assistance Act). Districts that receive money from this fund “shall to the greatest extent practicable, continue to pay its employees and contractors during the period of any disruptions or closures related to coronavirus.”
  • $3 billion for governors to spend on K–12 or higher education in regions that have been hit hardest by the coronavirus. Governors in each state will receive a share of this funding to allocate at their discretion for emergency grants to support the ability of local educational agencies to continue to provide educational services to their students and to support on-going district operations.
  • $8.8 billion for child nutrition programs to help ensure students receive meals while schools are closed.
  • $3.5 billion for Child Care & Development Block Grants, which provide childcare subsidies to low-income families and can be used to augment state and local systems.
  • $750 million for Head Start early education programs.
  • $100 million in Project School Emergency Response to Violence grants to help clean and disinfect schools, and provide support for mental health services and distance learning.
  • $5 million for health departments to provide guidance on cleaning and disinfecting schools and daycare facilities. 

To ensure that states are using funding earmarked in the Education Stabilization Fund to supplement and not supplant state funding, states have to agree that funding provided in fiscal years 2021 and 2022 is at least the same as the average spent on education over the prior three fiscal years. However, the CARES Act gives U.S. Secretary of Education Betsy DeVos new authority to waive certain ESEA provisions, including this requirement to maintain a state’s funding level.

The CARES Act also allows states to apply for waivers to freeze in place the schools identified as needing additional assistance under the Every Student Succeeds Act (ESSA). Under this waiver, schools identified for comprehensive support and improvement, targeted support and improvement, or additional targeted support in the 2019–20 school year would maintain that designation in the 2020–21 school year and continue to receive supports and interventions.

States also may seek to waive several other funding mandates under ESSA, including increasing the amount of carryover of Title I funds from the current year to the next.

Within 30 days of the stimulus package becoming law, Secretary DeVos is required to report to Congress on any additional waivers that may be necessary from the IDEA, ESSA, the Rehabilitation Act, and the Carl D. Perkins Career and Technical Education Act, in order to provide schools with “limited flexibility.”