COVID-19

Overview of Federal Relief for K-12 Education and Child Care

Since March 2020, the federal government has passed three relief packages that assist K-12 schools and child care providers in their response to the coronavirus disease 2019 (COVID-19) pandemic. This post provides a brief summary of how the three federal relief packages affect K-12 education and child care. (We described the first federal relief package in our earlier post, COVID-19: Federal and State Actions Affecting K-12 Education and Child Care.)

Three Federal Relief Packages

The federal government has enacted three relief packages, each of which has included support for schools and child care.

• Coronavirus Aid, Relief, and Economic Security (CARES) Act. Signed into law on March 27, 2020, the CARES Act provided $30.8 billion for a newly created Education Stabilization Fund. This fund is for higher education institutions, elementary and secondary schools, and states to cover costs related to the COVID-19 response in education. The CARES Act also provided $3.5 billion for child care programs. The legislation also established the Coronavirus Relief Fund (CRF), which can be used by states for a variety of activities that address the COVID-19 public health emergency. (As we describe later, California allocated a portion of its CRF funding to schools and child care.)

• Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA). Signed into law on December 27, 2020, the CRRSAA provided $81.9 billion for a second round of funding for the Education Stabilization Fund and $10 billion for child care. The CRRSAA made some minor changes to allowable uses, but generally had similar rules for how school and child care funds were to be spent.

• American Rescue Plan (ARP). The ARP was signed into law on March 11, 2021 and provides the largest round of funding, totaling $168.1 billion for K-12 and higher education and $39.6 billion for child care. In contrast to the first two federal relief packages, ARP makes notable changes to both the grants to schools and funds available for statewide emergency needs.

In the following sections, we discuss the major elements of federal relief for K-12 education and child care and describe how the state has used some funds in 2019‑20 and 2020‑21.

K-12 Education

In this section, we provide more detail on the funding and spending requirements for schools associated with each of the three federal relief packages. Figure 1 summarizes the major funding components for California K-12 public schools in each relief package. The state has made budget decisions regarding the use of state flexible funds included in the CARES Act, but has not yet appropriated the funds included in CRRSAA or ARP.

CARES Act

Elementary and Secondary School Emergency Relief Fund (ESSER) Primarily Provided Funding With Broad Discretion. The CARES Act provided $13.2 billion in federal relief for K-12 public schools through ESSER. This funding was allocated to states based on the Title I, Part A formula under the federal Every Student Succeeds Act (ESSA). (The Title I, Part A formula uses the number of low-income and disadvantaged children to allocate funding.) California received about $1.6 billion. Of this amount, 90 percent ($1.5 billion) was sent as grants to school districts and charter schools proportional to their Title I funding under ESSA. Up to 10 percent of the total amount ($165 million) was available as statewide flexible funding for emergency needs in response to the COVID-19 outbreak. The state has one year to commit the funds and until September 30, 2022 to expend them. Any expenses incurred after March 13, 2020—considered the start of the emergency—are eligible for reimbursement. Allowable uses for the local assistance grants are broad and include:

• Activities Aligned With Existing Federal Programs. Any activities consistent with existing federal education programs, such as special education services, career technical education, and supplemental services for disadvantaged student groups.

• COVID-19 Response. Coordinating, developing, and implementing COVID-19 response efforts, as well as purchasing supplies to clean facilities.

• Distance Learning. Planning for delivering instruction and meals during long-term school closures, purchasing education technology for students, providing mental health services, and providing supplemental learning opportunities for disadvantaged students.

• Staff Resources. Resources and training for staff to address the needs of their individual schools.

Governor’s Emergency Education Relief Fund (GEER) Gives Additional State Flexible Funds. In addition to relief funds earmarked for schools, the CARES Act provided states $3 billion in flexible funds for education through GEER. Of this funding, 60 percent was allocated to states based on their population aged 5 through 24 and 40 percent was allocated based on the number of low-income and disadvantaged students counted under Title I, Part A of ESSA. California received $355 million. This funding supports emergency grants to schools, higher education institutions, and other education-related entities considered most impacted by the outbreak. States have considerable discretion in deciding how to allocate funding. Similar to the requirements for ESSER funds, the state has one year to commit the funds and until September 30, 2022 to expend them.

States Are Expected to Maintain Education Funding at Recent Levels. As a condition of receiving a state allocation under ESSER and GEER funding, states are to maintain their support for education. Specifically, states must agree to maintain their support for K-12 education and higher education in fiscal years 2020 and 2021 at the average annual level they provided in the prior three fiscal years. The U.S. Secretary of Education may waive this requirement, however, for states that experience a “precipitous decline in financial resources.”

State Appropriated Flexible CARES Act Funds in 2020‑21 Budget. The 2020‑21 budget package used $4.8 billion in CARES Act funding for learning loss mitigation. This included all $355 million in GEER funding, as well as $4.4 billion from the CRF. The flexible statewide ESSER funding was used to provide $112 million for higher reimbursement rates for some school meals, $45 million for a competitive grant to support implementation of the community schools model, $6 million for teacher professional development to address student learning loss, and $2 million for the California Department of Education (CDE) to administer the funds.

CRRSAA

CRRSAA Provided Second Round of ESSER Funding to Schools. CRRSAA provided $54.3 billion in federal relief for K-12 public schools through a second round of ESSER funding. Funds were allocated to states using the same distribution formula as the CARES Act, based on Title I, Part A ESSA allocations. California received $6.7 billion—a four-fold increase from the first round of ESSER funding. Of this funding, $6 billion was sent directly to school districts and charter schools as grants proportional to Title I funding under ESSA. In addition to the activities allowed under the CARES Act, the CRRSAA explicitly allows ESSER funds to be used for three new activities: (1) addressing learning loss among disadvantaged students, (2) repairing and improving school facilities, and (3) improving indoor air quality in schools. The remaining $671 million in ESSER funding is available for statewide K-12 education priorities. The state has one year to commit the funding and until September 30, 2023 to expend funds.

States Also Received Second Round of GEER Funding. CRRSAA provided $4.1 billion for a second round of GEER funding. The first two rounds of GEER funding share many similarities, including the state allocation formula and allowable uses, with one difference related to private school funding. Specifically, CRRSAA reserves about $2.8 billion in GEER funding for emergency assistance and services to private schools. These funds were allocated to states proportional to their share of low-income children aged 5 through 17 enrolled in private schools. Private schools that enroll low-income students and were most impacted by the pandemic receive priority for the funds. California received $187 million in emergency assistance for private schools. CDE is responsible for developing an application process and awarding assistance and services to eligible private schools. The remaining GEER funds were allocated to states under the same formula as the CARES Act, proportional to population between the ages of 5 and 24 and student counts under Title I, Part A of ESSA. Similar to the CARES Act, the state can use these funds on emergency needs related to education. California received $154 million for statewide emergency needs under GEER. Any private school funds remaining after six months also may be used for statewide emergency needs. The state has one year to commit the funding and until September 30, 2023 to expend funds. CRRSAA also requires states to maintain their support of K-12 education and higher education in fiscal year 2022 as a condition of receiving ESSER and GEER funding.

ARP

Significantly Greater ESSER Funding, With Additional Spending Requirements. ARP provides $122 billion for a third round of ESSER funding. Similar to the first two federal packages, ARP allocates ESSER funding to states based on Title I allocations under ESSA. California will receive $15.1 billion in total ESSER funds under ARP—more than twice the amount the state received under CRRSAA. States are required to send at least 90 percent of the total state allocation to school districts and charter schools. In California, $13.6 billion will be provided to schools as ESSER grants. In contrast to prior rounds of funding, which provided broad discretion for use of ESSER funds, schools are required to spend at least 20 percent of their ESSER grants from ARP to address learning loss through activities such as summer school, after school programs, and additional instructional time. In deciding how to use its ESSER funds, schools are expected to consider student social-emotional needs and the student groups most impacted by COVID-19. Each school district or charter school must also make publicly available its plan for safe in-person instruction within 30 days of receiving ESSER funding.

Spending Requirements for State-Level ESSER Funds. Of California’s ESSER allocation, $1.5 billion is available for statewide K-12 education priorities. Similar to the spending requirements for schools, ARP sets greater restrictions on the use of statewide ESSER funds. Specifically, states must spend at least 5 percent of their total ESSER allocation on learning recovery, 1 percent on summer school, and 1 percent on comprehensive after school programs. State-level activities are expected to consider student social-emotional needs and the student groups most impacted by COVID-19. Altogether, these spending requirements apply to a total of $1.1 billion in available statewide ESSER funds, with the remaining $452 million available for other statewide education needs. The state has one year to commit the funding and until September 30, 2024 to expend funds.

Provides Additional Funding for Special Education, Private Schools, Homeless Students, and Education Technology. In addition to ESSER, ARP provides a $3 billion one-time augmentation to federal special education funding under the Individuals with Disabilities Education Act. Of this funding, California will receive $302 million. ARP also provides $2.8 billion for emergency services and assistance to private schools that enroll a significant percentage of low-income students and were most impacted by the pandemic. California will receive $181 million in private school funds. These funds are available through September 30, 2024. ARP additionally provides $800 million for identifying and providing services to homeless students. California will receive $99 million to support homeless students. Similar to the first two federal packages, ARP requires states accepting ESSER funds to maintain their support for K-12 education and higher education for fiscal years 2022 and 2023. Unlike the CARES Act or CRRSAA, ARP also limits funding reductions for school districts and schools with the most low-income students. Lastly, ARP provides $7.2 billion for the federal government to reimburse certain costs for eligible schools and libraries to connect individuals (including students and school staff) to the internet during the pandemic.

Child Care

In this section, we provide more detail on child care funding from the three federal relief packages and describe how the state has expended some of these funds. Figure 2 summarizes the total allocation California received specifically for child care.

California to Receive a Combined $2.8 Billion in Supplemental Child Care and Development Block Grant (CCDBG) Funding. The federal government provided a total of $28.5 billion in federal relief through supplemental CCDBG funds. As Figure 2 shows, California received a combined $2.8 billion in supplemental CCDBG funds from the three relief packages. All the supplemental CCDBG provided through the three relief packages can be used for child care assistance to essential workers. Supplemental CCDBG provided through the CARES Act and CRRSAA can also be used to support child care providers. For CARES Act and CRRSAA, supplemental CCDBG must be committed by September 30, 2022 and expended by September 30, 2023. For ARP, funds must be committed by September 30, 2023 and expended by September 30, 2024.

State Has Appropriated $882 Million of Relief Funds for Child Care. The state appropriated all of its $460 million in CARES Act funding through a variety of spending actions in 2020 and 2021. CARES Act funding for child care includes $350 million of supplemental CCDBG as well as $110 million in CRF. The Legislature also passed Chapter 6 of 2021 (AB 82, Ting), which appropriated $402 million of the $964 million in supplemental CCDBG the state received through the CRRSAA. The administration subsequently submitted a budget revision to use $20 million of the CRRSAA funds to address a budget shortfall associated with providing voucher providers with reimbursement flexibility. Figure 3 describes how the state used these one-time federal relief funds in more detail. A total of $542 million in CRRSAA and $1.4 billion in ARP supplemental CCDBG funds remain available.

California Anticipated to Receive an Additional $2.4 Billion for Child Care From ARP. Of this amount, $2.3 billion is child care stabilization funding. The state is to provide grants to child care providers to pay for costs such as payroll, rent, and cleaning supplies. The ARP also includes ongoing child care entitlement funding, which we estimate would provide an additional $63 million for subsidized child care programs. For entitlement funds, the state must commit by the end of the fiscal year and expend by the end of the second fiscal year. The Legislature has not yet appropriated any of these funds.

Conclusion

The availability of federal relief funding, combined with the state’s improved fiscal situation, has increased the amount of one-time funding available to address pandemic-related issues, such as learning loss and the higher cost of operating child care centers. The Legislature can target flexible federal relief funding in ways that best complement other funds. Regarding schools, the Legislature may want to consider using the funds strategically to complement the $20 billion in direct grants to schools. For example, the Legislature could encourage multiagency coordination to address certain issues, such as student mental health. Regarding child care, the Legislature may want to consider actions that can be implemented quickly to distribute funding more quickly to child care providers that have experienced fiscal challenges during the pandemic. The Legislature also may want to spend child care funds over multiple years. Given supplemental CCDBG funds from ARP can be spent through September 2024, there is no requirement for the Legislature to appropriate all the federal assistance in the current budget cycle. (We discuss our suggestions for the Legislature in more detail in our post, The 2021‑22 Budget: Child Care Proposals.)