THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
SAVING AND CREATING JOBS AND REFORMING EDUCATION
The American Recovery and Reinvestment Act of 2009 (ARRA) provides approximately $100 billion for
education, creating a historic opportunity to save hundreds of thousands of jobs, support states and
school districts, and advance reforms and improvements that will create long‐lasting results for our
students and our nation including early learning, K‐12, and post‐secondary education. This document
describes the principles and strategy that will guide the distribution and implementation of the ARRA
funds appropriated to the U.S. Department of Education.
Accompanying documents provide initial
guidelines for three components of ARRA education funding: the State Fiscal Stabilization Fund (SFSF),
Title I, Part A of the Elementary and Secondary Education Act (Title I), and the Individuals with
Disabilities Education Act (IDEA), Part B. Separately, we will issue guidelines on other ARRA funds as
they are developed. The Department will periodically provide updated information at www.ed.gov.
Principles: The overall goals of the ARRA are to stimulate the economy in the short term and invest in
education and other essential public services to ensure the long‐term economic health of our nation.
The success of the education part of the ARRA will depend on the shared commitment and responsibility
of students, parents, teachers, principals, superintendents, education boards, college presidents, state
school chiefs, governors, local officials, and federal officials. Collectively, we must advance ARRA’s
short‐term economic goals by investing quickly, and we must support ARRA’s long‐term economic goals
by investing wisely, using these funds to strengthen education, drive reforms, and improve results for
students from early learning through post‐secondary education. Four principles guide the distribution
and use of ARRA funds:
a. Spend funds quickly to save and create jobs. ARRA funds will be distributed quickly to states, local
educational agencies and other entities in order to avert layoffs, create and save jobs and improve
student achievement. States and LEAs in turn are urged to move rapidly to develop plans for using
funds, consistent with the law’s reporting and accountability requirements, and to promptly begin
spending funds to help drive the nation’s economic recovery.
b. Improve student achievement through school improvement and reform. ARRA funds should be
used to improve student achievement. In addition, the SFSF provides funds to close the
achievement gap, help students from all backgrounds achieve high standards, and address four
specific areas that are authorized under bipartisan education legislation – including the Elementary
and Secondary Education Act and the America Competes Act of 2007:
1. Making progress toward rigorous college‐ and career‐ready standards and high‐quality
assessments that are valid and reliable for all students, including English language learners
and students with disabilities;
2. Establishing pre‐K‐to college and career data systems that track progress and foster
continuous improvement;
3. Making improvements in teacher effectiveness and in the equitable distribution of qualified
teachers for all students, particularly students who are most in need;
4. Providing intensive support and effective interventions for the lowest‐performing schools.
c. Ensure transparency, reporting and accountability. To prevent fraud and abuse, support the most
effective uses of ARRA funds, and accurately measure and track results, recipients must publicly
report on how funds are used. Due to the unprecedented scope and importance of this investment,
ARRA funds are subject to additional and more rigorous reporting requirements than normally apply
to grant recipients.
d. Invest one‐time ARRA funds thoughtfully to minimize the “funding cliff.” ARRA represents a
historic infusion of funds that is expected to be temporary. Depending on the program, these funds
are available for only two to three years. These funds should be invested in ways that do not result
in unsustainable continuing commitments after the funding expires.
Categories of funds and schedule for distribution: Balancing the need for speedy investments and for
rigorous accountability and transparency, the Department has designed the following approaches for
distributing different categories of funds. Some funds will be distributed in stages to states on a formula
basis and then distributed from states to local education agencies (LEAs) or institutions of higher
education (IHEs) for use over the next two school years (2009–10 and 2010–11); some funds will be
distributed all at once; some funds will be distributed through a competitive grant process.
The ARRA Pell grant and work study funding will be used for school year 2009–2010. These funds are
available, pending disbursement, beginning July 1.
o Pell Grants—$17.1 billion. This will increase the maximum Pell award for all eligible students
from $4,850 to $5,350.
o Work Study—$200 million.
The funds under the SFSF, Title I, Part A and IDEA, Part B will be available in two stages. Funds from
these very large programs are to be delivered by formula from the Department to the states. The
Department will release 50 percent of Title I, Part A and 50 percent of IDEA, Part B funds before the end
of March 2009, without requiring new state applications. Streamlined, user‐friendly applications for the
initial 67 percent of the SFSF will be available to governors by the end of March, and funds will be made
available by the Department within two weeks after receipt of an approvable application. For these
three categories of funds, we expect to make available the remainder of the funds during the period July
1 to Sept. 30, 2009, conditioned on states providing additional information. The guidelines for securing
these funds will be available on our Web site at www.ed.gov.
o SFSF delivered to the state governors ($48.6 billion)
o $39.8 billion is devoted to public early learning, K‐12, and higher education. This amount
must be distributed by formulae from the state to local education agencies and through
a mechanism determined by the state to institutions of higher education.
o $8.8 billion is allocated to governors for education (including school modernization),
public safety, or other government services.
o Title I, Part A ($10 billion) to State educational agencies.
o IDEA, Part B ($11.7 billion) to State educational agencies.
A minimum of 50 percent of the funds for the following programs will also be available by the end of
March as soon as guidelines are issued:
o IDEA Part C ($500 million).
o Vocational Rehabilitation State Grants ($540 million).
For the following programs under $500 million, all of the formula funds will be available by the end of
March:
o Impact Aid Construction ($100 million: only 40 percent will be distributed by formula; 60
percent will be distributed through competitive grants at a later date).
o Independent Living Services ($140 million; only $52.5 million will be distributed by formula;
remaining $87.5 will be distributed by competitive grants at a later date).
o Education for Homeless Youth ($70 million).
For the following programs, funds will be made available beginning in fall 2009, and will be conditioned
upon receipt of further information that will be outlined in future guidance:
o Title I School Improvement Grants ($3 billion).
o Educational Technology State Grants ($650 million).
The following funds will be made available beginning in fall 2009, based on the quality of the
applications submitted through a competitive grant process. Guidelines for these funds will be posted
shortly:
o Teacher Incentive Fund ($200 million).
o Teacher Quality Enhancement ($100 million).
o Statewide Data Systems ($250 million).
Under the $5 billion in SFSF reserved for the Secretary of Education to make competitive grants, the
Department will conduct a national competition among states for a $4.35 billion state incentive “Race to
the Top” fund to improve education quality and results statewide. The Race to the Top fund will help
states drive substantial gains in student achievement by supporting states making dramatic progress on
the four reform goals described above and effectively using other ARRA funds. $650 million of the $5
billion will be set aside in the “Invest in What Works and Innovation” fund and be available through a
competition to districts and non‐profit groups with a strong track record of results. Guidelines and
applications for the competitive funds will be posted expeditiously. Race to the Top grants will be made
in two rounds—fall 2009 and spring 2010).
In the coming months, the Department will also announce opportunities to compete for discretionary
funds under non‐ARRA programs. The priorities for these competitions will be aligned with the reform
goals of the Race to the Top fund, and will recognize states and LEAs that optimize the use of the varied
funding streams provided under ARRA. In addition, the Department will identify technical assistance
resources to help states and localities effectively implement the most promising and evidence‐based
reforms using all relevant federal, state, and local resources. With federal funds available for R&D, the
Department also hopes to work with schools to support rigorous testing of interventions that states and
districts support with ARRA funds, to build the knowledge base about what works.
What must states do to receive SFSF, Title I, Part A and IDEA, Part B funds? States will receive initial
Title I, Part A and IDEA, Part B funds under pre‐existing applications. For the first round of state
stabilization funds, governors must provide three things:
o Assurances that they are advancing the four reforms described in the statute and maintenance
of effort;
o Baseline data on their current status in each of these areas; and
o Basic information on how the funds will be used.
The Department intends to provide governors with a streamlined, user‐friendly initial SFSF application
package.
For the second round of funds, state educational agencies (SEAs) must provide information regarding
their ability to meet reporting requirements under the ARRA under Title I, Part A and IDEA, Part B. In the
case of the SFSF, governors must provide plans outlining the state’s plans and progress in the four
reform areas described above. As part of its application for the second part of the SFSF, a state must
describe how the state and its LEAs plan to use SFSF and other funding in a fiscally prudent way that
substantially improves teaching and learning. Governors and chief state school officers should work
closely with other state and local officials in the state to develop effective data reporting systems and
plans that will meet the assurances required by SFSF.
Conclusion: This distribution strategy balances the need for speed and economic stimulus with the
need for aggressive and effective education improvement and reform in order to drive our nation’s long‐
term economic well‐being. It provides significant resources quickly while giving states and local
educational agencies time to carefully plan thoughtful use of funds. It seeks to align the use of the funds
provided through SFSF, Title I, IDEA and state incentive grants, with the purposes of prudent investment
under the ARRA and improving student achievement. Success will depend on the quality of leadership,
judgment, coordination, and communication of all involved. It represents a historic opportunity to
restore America’s global leadership in education.
