Most Districts Have Spent at Least Half Their Federal COVID Aid. What This Means for K-12 Companies

Contributing Writer
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School districts around the country are making progress when it comes to spending emergency federal funding.

That’s the takeaway from a recent survey conducted by the EdWeek Research Center that examines how much districts have spent from the massive amount of emergency aid injected into the K-12 education system to mitigate financial pain caused by the pandemic.

A nationally representative survey conducted between late June and mid-July found the vast majority of districts have already plowed through at least half of their federal relief funds — and, in many cases, a substantial portion more.

Of the 535 district leaders and principals who responded to the survey, 40 percent said they have spent three-quarters of their federal stimulus dollars. Another 36 percent said they’ve spent about half of their emergency funds.

And a small slice of districts — 11 percent — said they have exhausted their allotment of relief money. Data from the survey first appeared in Education Week

District Spending Relying Heavily on Emergency Aid

The survey findings are of particular importance for education companies, given that district purchasing has largely revolved around the emergency federal funding since the start of the pandemic — and will continue to do so at least for the next couple of years. 

Over the last two years, districts have received roughly $190 billion of stimulus funds from three separate relief measures. The largest chunk, about $123 billion Congress approved last March through the American Rescue Plan, has to be spent by September of 2024.

So far, the funding has supported everything from student mental health to educational technology to massive tutoring initiatives for struggling learners. It has also paid for COVID-mitigation measures such as personal protective equipment, cleaning supplies, new construction, and upgraded ventilation systems.  

Flush with cash, school systems have been criticized for not spending those dollars quickly enough. 

Reg Leichty, a founder and partner of Foresight Law + Policy, a law firm with clients that include K-12 school systems, said districts are moving in the right direction, taking careful steps to identify areas to spend that money. 

“Clearly, a lot of decisions have been made leading up to this school year about how to best use those funds,” he said. 

The pace of spending has been a lingering question for districts.

An EdWeek Market Brief survey from last year of 280 district administrators asked when they planned to spend the money from the two most recent stimulus measures. That includes a $54 billion infusion for schools approved by President Trump in December 2020, known as ESSER II, and $122 billion of relief funds signed into law by President Biden in March 2021 known as the American Rescue Plan. 

That survey found 52 percent of districts planned to spend most of their share of ESSER II money by the end of 2021-22 academic/fiscal year. 

But districts’ timeline for spending money through the American Rescue Plan was slower. 

A substantial portion of K-12 officials surveyed — 32 percent — said they didn’t anticipate spending the majority of the money they received until the 2022-23 academic/fiscal year. Thirteen percent predicted spending it during 2023-24 or later. 

What Will Happen When the Federal Funds Run Out

Another looming issue for districts: how to use those federal emergency relief funds now without leaving their school systems scrambling in two years to find funding for positions and programs created with one-time pandemic-era funding. 

School finance experts have warned of an impending funding cliff once the stimulus dollars run out. 

Some districts are using those relief funds in a way that commits their school system to spend money beyond the next two years, and that means future cuts are likely unless new money can be found to cover those costs. 

Leichty, the K-12 consultant, said while many districts have not invested the one-time money into new staff and programs that will incur recurring costs moving forward, some clearly have. And those districts “are going to be in a position to need to find more funding” once the federal money dries up, he said. 

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