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

ED Drops Controversial Equitable Services Calculation for CARES Act Funds

The U.S. Department of Education (ED) recently announced that the July 1, 2020, Interim Final Rule (IFR) that applied new equitable services calculations for certain Coronavirus Aid, Relief, and Economic Security (CARES) Act dollars is no longer in effect due to the recent opinion and order issued by the U.S. District Court for the District of Columbia in NAACP v. DeVos, which vacates the rule.

As a reminder, the CARES Act specified that local educational agencies (LEAs) that receive funding from the Governor’s Emergency Education Relief (GEER) fund and Elementary and Secondary School Emergency Relief (ESSER) fund are required to “provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 (Title I) to students and teachers in non-public schools” (see “Equitable Services Requirement Applies to Certain CARES Act Funds” in the July 2020 Fiscal Report). Title I mandates the set aside for private schools to be based on the number of low-income children who attend those private schools.

However, the July 1 IFR issued by the ED attempted to significantly change this calculation, resulting in more CARES Act dollars being diverted from traditional public schools to private schools. What the U.S. District Court opinion does is effectively say that the new equitable services calculations detailed in the July 1 IFR are invalid and that LEAs should base their calculations on the number of eligible low-income private school students and not the entire population. In other words, LEAs should calculate the equitable services set aside as stipulated under Title I of the Elementary and Secondary Education Act.

While the ED has not explicitly stated whether or not they will appeal this opinion to a higher court, the fact that they have announced that this rule is no longer in effect signals that they will likely not pursue further legal action on this matter. In addition, the California Department of Education has posted additional information in a Frequently Asked Questions page for ESSER funds, including details on how any disputes with private schools regarding the equitable services calculation should be resolved.