American Recovery and Reinvestment Act

U.S. Department of Education Summary of ARRA grant programs (PDF,1.23Mb).

Summary of Key Education and Training Provisions

February 18, 2009

The following information is excerpted from the committee report that accompanied the American Recovery and Reinvestment Act. A committee report provides explanation of provisions of the law and in some cases also indicates Congressional intent as to how Congress believes the funds should be used.

Department of Education

The agreement includes $13,000,000,000 for programs supported by the Elementary and Secondary Education Act. The total conference agreement includes $10,000,000,000 for title I formula grants and $3,000,000,000 for School Improvement grants. The conferees intend that these funds should be available during school years 2009-2010 and 2010-2011 to help school districts mitigate recent reduction in local revenues and State support for education. The conferees direct the Department to encourage States to use 40 percent of their School Improvement allocation for middle and high schools.

The agreement includes $11,300,000,000 for section 611 of part B, $400,000,000 for section 619 of part B, and $500,000,000 for part C of IDEA. The conferees intend that these funds should be available during school years 2009-2010 and 2010-2011 to help school districts mitigate recent reduction in local revenues and State support for education.

State Stabilization Fund

STATE USES OF FUNDS

The conference agreement provides $53,600,000,000 for a State Fiscal Stabilization Fund, instead of $79,000,000,000 as provided by the House passed version of the bill and $39,000,000,000 as provided by the Senate. The conference agreement makes the entire amount available upon enactment of the bill. The earlier version of the bill, as passed by the House, would have distributed the funds in two equal amounts in 2009 and 2010.

The conference agreement requires Governors to use 81.8 percent of their State allocations to support elementary, secondary, and higher education. Funding received must first be used to restore State aid to school districts under the State's primary elementary and secondary education funding formulae to the greater of the fiscal year 2008 or 2009 level in each of fiscal years 2009, 2010, and 2011, and, where applicable, to allow existing formula increases for elementary and secondary education for fiscal years 2010 and 2011 to be implemented; and to restore State support to public institutions of higher education to the greater of the fiscal year 2008 or fiscal year 2009 level, to the extent feasible given available Stabilization funds. Any remaining education funds must be allocated to school districts based on the Federal Title I formula. The conference agreement also provides that Governors use 18.2 percent of State allocations for public safety and other government services, which may include education services. These funds may also be used for elementary, secondary, and higher education modernization, renovation and repair activities that are consistent with State laws. The agreement also provides that Governors shall consider for modernization funding any institution of higher education in the State that meets certain criteria.

USES OF FUNDS BY LOCAL EDUCATIONAL AGENCIES

The conference agreement provides that school districts receiving Stabilization funds may only use the funds for activities authorized under the Elementary and Secondary Education Act (ESEA), the Individuals with Disabilities Act (IDEA), the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins), and for school modernization, renovation, and repair of public school facilities (including charter schools), which may include modernization, renovation, and repairs consistent with a recognized green building rating system.

USES OF FUNDS BY INSTITUTIONS OF HIGHER EDUCATION

The conference agreement provides that public institutions of higher education receiving Stabilization funds must use these funds for educational and general expenditures, and in such a way as to mitigate the need to raise tuition and fees, or for modernization, renovation, or repairs of facilities that are primarily used for instruction, research, or student housing. Use of funds for endowments and certain types of facilities such as athletic stadiums are prohibited.

STATE INCENTIVE GRANTS

The conference agreement authorizes the Secretary of Education to award, in fiscal year 2010, Incentive Grants to States that have made significant progress in achieving equity in teacher distribution, establishing a longitudinal data system, and enhancing assessments for English language learners and students with disabilities. Each State receiving an Incentive Grant shall use at least 50 percent of its grant to provide school districts with subgrants based on their most recent relative Title I allocations.

INNOVATION FUND

The conference agreement authorizes up to $650,000,000 for an Innovation Fund, awarded by the Secretary of Education, which shall consist of academic achievement awards to recognize school districts, or partnerships between nonprofit organizations and State educational agencies, school districts, or one or more schools that have made achievement gains.

STATE REPORTS

The conference agreement requires that a State receiving Stabilization funds shall submit an annual report to the Secretary describing the uses of funds provided within the State; the distribution of funds received; the number of jobs saved or created; tax increases averted; the State's progress in reducing inequities in the distribution of highly-qualified teachers, developing a longitudinal data system, and implementing valid assessments; actions taken to limit tuition and fee increases at public institutions of higher education; and the extent to which public institutions of higher education maintained, increased, or decreased enrollments of in-State students.

FISCAL RELIEF

The conference agreement provides that the Secretary of Education may waive or modify any requirement of this title relating to maintenance of effort, for States and school districts that have experienced a precipitous decline in financial resources. In granting such a waiver, the Secretary shall determine that the State or school district will maintain the proportionate share of total revenues for elementary and secondary education as in the preceding fiscal year.

Department of Labor

The agreement includes $3,950,000,000 for Workforce Investment Act programs. Within this amount, $2,950,000,000 is provided for formula grants to the States for training and employment services. These funds are to be allotted to States within 30 days of enactment. Since these funds will be made available during program year 2008, they shall remain available to the States only as long as the other funds allotted in that program year. To facilitate increased training of individuals for high-demand occupations, the conference agreement modifies language proposed by the Senate to provide the authority for local workforce investment boards to contract with institutions of higher education and other eligible training providers as long as that authority is not used to limit customer choice.

For youth services, $1,200,000,000 is provided. The conferees are particularly interested in these funds being used to create summer employment opportunities for youth and language applying the work readiness performance indicator to such summer jobs is included as an appropriate measure for those activities. Year-round youth activities are also envisioned and the age of eligibility for youth services provided with the additional funds is extended through age 24 to allow local programs to reach young adults who have become disconnected from both education and the labor market.

For dislocated worker services $1,250,000,000 is provided. The conferees urge the Secretary to provide guidance on how States and local workforce areas can establish policies that assure that supportive services and needs-related payments that may be necessary for an individual's participation in job training are a part of the dislocated worker service strategy.

The agreement includes $750,000,000 for a program of competitive grants for worker training and placement in high growth and emerging industry sectors, as proposed by the House, rather than $250,000,000 for a similar program proposed by the Senate. Within the amount provided, $500,000,000 is designated for projects that prepare workers for careers in energy efficiency and renewable energy as described in the Green Jobs Act of 2007. Priority consideration for the balance of funds shall be given to projects that prepare workers for careers in the health care sector, which continues to grow despite the economic downturn. The conferees believe that training for wireless and broadband deployment is an eligible activity for grants for high growth and emerging industry sectors, along with advanced manufacturing and other high demand industry sectors identified by local workforce areas. In carrying out the program of competitive grants for worker training and placement in high growth and emerging industry sectors, the conferees expect the Department to use a limited portion of the program funds for technical assistance and related research.

Student Aid

The conference agreement specifies that funding is available to support a $4,860 maximum Pell Grant award for the 2009-2010 award year. With the additional $490 in mandatory funding, combined with the increased included in the FY 09 omnibus appropriations bill, the maximum Pell Grant will be $5,350.

Federal Work-Study funding is increased by $200 million. FY 2008 funding is $1.171 billion.

Compiled by National Association of State Directors of Career Technical Education Consortium
February 2009