Pop Quiz: Are School COVID Relief Funds Working?

Last September, McAllen, a mid-sized city in Texas’s Rio Grande Valley, was considering how best to spend some of the nearly $140 million it received in federal COVID-relief funds. In addition to hiring counselors and educational staff, the McAllen Independent School District (ISD) Board of Trustees had another idea: What if it expanded a “historic Spanish Revival adobe hacienda surrounded by lush tropical landscaping & native woodland?”

The Quinta Mazatlan, which the board unanimously voted to spend $4 million to expand, is an old estate and lush bird sanctuary owned by the city of McAllen. The money will fund construction of a school science center on the grounds, with the aim of teaching students about ecology.

“We’re using this money to address achievement gaps, which do exist as a result of COVID, and this will not only address those achievement gaps, but it’s going to connect kids to higher education, and it’s going to bolster their education in the scientific realm for decades to come,” McAllen ISD spokesperson Mark May told local news station KRGV.

One of the funds’ major purposes is to address learning loss, which remains a problem after COVID. One national analysis showed that in spring 2021, K-12 students were an average of five months behind in math and four months behind in reading.

“There are third graders who don’t know how to read,” Marguerite Roza, director of the Edunomics Lab at Georgetown University, said. “And there are eighth graders who kind of missed fractions and then aren’t going to be successful in math going forward, because there are really significant holes in their learning. There are high schoolers who don’t know how to get out of bed and go to school on time every day, because we told them they didn’t have to.”

But not everyone in McAllen could make the connection between pandemic learning loss and a scenic 1930s estate. 

“I’m having difficulty understanding the partnership between the school, our kids, and the park,” Tory Guerra, a McAllen ISD parent, told KRGV. The McAllen ISD did not respond to a request for comment.

To be clear, the McAllen board only spent a small fraction—less than 3 percent—of its total COVID relief allocation on the Quinta Mazatlan. And available evidence suggests that spending on this type of project is not representative of the typical school district.

But the episode does shed light on two major questions about how Congress’ massive pandemic investment in K-12 schools is being administered: What sorts of expenses can school systems use the funds for? And are they achieving their goals? On both counts there is widespread uncertainty.  

For many experts, these questions are more pressing than eye-catching expenses like the Quinta Mazatlan expansion or concerns that districts are spending the funds too slowly. Some even felt that those stories paint a misleading picture.

“I feel like there’s a narrative that this money isn’t being spent or it isn’t being spent wisely,” Phyllis Jordan, associate director of education think tank FutureEd, told The Dispatch. “And I think it’s too soon to say that, and I think that belies all the hard work a lot of districts have done to plan for spending this money.”

Between the three COVID-relief bills passed—the CARES Act, the CRRSSA Act, and the American Rescue Plan Act—Congress provided $189.5 billion in Elementary and Secondary School Emergency Relief (ESSER) funds (plus a few small funds for special purposes). For context, K-12 spending by local, state, and federal governments combined was $752 billion in the 2018-2019 school year, the last full school year before the pandemic.

State education agencies (SEAs) each received three rounds of ESSER funding: ESSER I from the March 2020 CARES Act, ESSER II from the December 2020 CRRSSA Act, and ARP ESSER—also known as ESSER III—from the March 2021 American Rescue Plan Act. The money then flows from SEAs to local education agencies (LEAs)—normally district school boards—according to the federal Title I formula, which prioritizes districts serving larger numbers of poor students.

ESSER I consisted of $13.2 billion total, ESSER II $54.3 billion, and ARP ESSER $122 billion. The funds must be committed to specific expenditures by different deadlines: September 30, 2022; September 30, 2023; and September 30, 2024, respectively. LEAs have an additional four months after these obligation deadlines to actually spend the cash.

All three funds largely serve the same purposes and have the same requirements: safely reopen schools, address student learning loss from online learning or school closures, and support student and staff mental health affected by the pandemic.

The American Rescue Plan Act adds a few additional provisions related to addressing learning loss. Each LEA must dedicate 20 percent of its ARP ESSER funding toward responding to learning loss, and this spending must be “evidence-based.” An “evidence-based” strategy must, at minimum, draw on empirical research, even if the plan itself has not been directly studied.  

School districts have faced a series of problems and limitations as they weigh how to spend these funds.

Once the ESSER funds run out, schools will hit a fiscal cliff where their budgets shrink significantly, potentially making it hard to pay the salaries of new hires. Nearly half of district leaders expect such a problem after the ESSER funds expire, according to a 2022 RAND survey. Of those administrators anticipating a fiscal cliff, 41 percent are avoiding hiring for certain roles to avoid later layoffs. 

“The ultimate problem is how to spend that money without hiring a bunch of people,” Chris Hines, deputy superintendent at the Conroe Independent School District outside of Houston, told RealClearInvestigations. “This is a labor-intensive industry and 90 percent of our budget is people.”

Avoiding or mitigating that fiscal cliff has led some administrators to adjust their spending: 40 percent of district leaders anticipating the funding dropoff are trying to make up-front investments in preparation, according to the RAND survey.

That can mean construction projects, which have become a common destination for ESSER funds: 55 percent of school district leaders planned to spend some of their ARP ESSER funds on facility maintenance or updates, according to a January 2022 survey from AASA, The School Superintendents Association. But many stakeholders found federal guidelines surrounding ESSER spending on construction projects vague or inconsistent. 

Department of Education guidance has drawn criticism for being unclear, especially for construction, infrastructure, or facility upgrades. “There’s just a lot of gray area and people hear one thing from one person and another thing from another person,” Roza said. 

“The toughest part has been the lack of clarity from any governmental agency on what we can and can’t do,” Christopher Young, a Vermont principal, told K-12 Dive. His district had initially wanted to use some of its ESSER funds on field trips. After the state advised the district that expenditures must be closely related to the pandemic, the district opted to obligate $120,000 for mountain bikes and ski passes for outdoor and experiential learning, as well as $130,000 for playground construction.

“North Country Supervisory Union is a rural district on the Canadian border with relatively high poverty,” a spokesperson at the Vermont Agency of Education said. “These kinds of programs ensure all students have access to these kinds of programs, which have benefits both inside and outside the classroom.” Young did not respond to a request for comment.

Early federal guidance, issued after the first round of ESSER funds, told districts they had “considerable flexibility” in spending the money. But after all three bills had passed, the Education Department issued a much longer set of FAQs saying that a district must ask, “Is the use of funds intended to prevent, prepare for, or respond to the COVID-19 pandemic, including its impact on the social, emotional, mental health, and academic needs of students?” suggesting an expectation of more targeted spending.

That document said that facility spending “to reduce risk of virus transmission and exposure to environmental health hazards, and to support student health needs” was a permissible use of funds. 

But it also said that any construction funded by ESSER must “meet the overall purpose of the CARES Act, CRRSA Act, or ARP Act programs, which is ‘to prevent, prepare for, and respond to’ COVID-19.”

Roza pointed to fixing leaky roofs as an example of spending that seems to meet the “environmental health hazards” requirement but not the “overall purpose” requirement: “We basically said you can build healthy buildings. So if something relates to a healthy building, like fixing a leaking roof, that’s fine too. And that’s actually an example they gave.”

It is unclear whether headline-grabbing uses of ESSER funds—a football field in Wisconsin, track and weight room renovations in Kentucky, or bleachers in Iowa—are merely inappropriate or actually illegal under these guidelines. When asked, an Education Department spokesperson told The Dispatch, “Questions on allowable uses of funds are highly contextual. Therefore, it is important that we have all the relevant facts before we make any judgments regarding the allowability of certain activities or purchases.”

“I suspect you can make a case for anything, but the purpose is clear: It’s to open safely, stay open safely and deal with learning loss,” VirginiaRep. Bobby Scott, who chairs the House Education and Labor Committee, told the Associated Press last year. “These are targeted resources needed to address the fact that a lot of children just didn’t achieve much for about a year.”

In the longer set of FAQs, the Department of Education also warned, “Remodeling, renovation, and new construction are often time-consuming, which may not be workable under the shorter timelines associated with ESSER and GEER funds.” Supply chain slowdowns and worker shortages have only exacerbated these concerns.

On May 13, 2022, in response to an AASA question, the Department of Education said that it would accept liquidation extension requests. But the Education Department has issued no further guidance on the extension process since the May letter. On July 22, a group of education organizations requested more details from the department in a letter to Education Secretary Miguel Cardona, but the government has not yet responded. (A Department of Education spokesperson told The Dispatch the department “looks forward to responding directly” to the letter’s authors.)

 Sasha Pudelski, assistant director for policy and advocacy at AASA,  referred to the actual details of the extension application process as “the big question.” 

Many districts might need to take advantage of it. In the AASA survey, over half of school district leaders reported needing an extension of the September 2024 obligation deadline to spend ARP money on HVAC and construction projects.

Once the ESSER funds are spent, data on how—and how effectively—they have been spent are sparse.

“We’re not really measuring progress as we go, so it almost feels like a data-light investment,” Roza said. “190 billion in federal dollars, and we don’t know what it bought, and we don’t know whether it worked to get kids back on track. And I think that last piece of it is the part that’s been upsetting me the most.”

The Department of Education’s transparency portal gives some information on ESSER spending: how much money each state received in each round of ESSER funding and how much of each round each state has spent. Vermont has spent the least of its total ESSER funds—16 percent, as of June 30. At 46.2 percent, Hawaii has spent the most. We know that, by the end of the June 30 reporting period, Michigan had spent 93.5 percent of its ESSER I funds, 45 percent of its ESSER II funds, and 10.1 percent of its ARP ESSER funds.

The most granular data, which is currently only available through September 30, 2020, comes in the form of a massive spreadsheet that lists how much districts spent on various categories—such as “sanitization,” “educational technology,” or “dedicated learning devices.” But the data set codes over half of the expenditures as simply “other.”

At the state level, more recent data is often available. But state portals “lump a lot of things under ‘other,’ which is very frustrating,” Jordan, of the FutureEd think tank, said. “At this point, it’s a little unclear how it’s being spent.”

The quality of data varies widely at the state level. For example, Washington state breaks down how its school districts have used the 80 percent of their ARP ESSER funds not restricted to evidence-based learning loss remediation strategies. Of what they’ve spent, 68 percent have been classified as “other.”

But Indiana’s Department of Education uses a different reporting system, resulting in only around 4 percent of the ARP ESSER expenditures thus far being classified as “other.”

FutureEd predicts that 27.4 percent of ARP ESSER funds nationwide will go to “academic recovery,” 24.4 percent to “staffing,” 23.9 percent to “facilities and operations,” 9.7 percent to “technology,” 7.2 percent to “mental and physical health,” 5.6 percent to “miscellaneous financials,” and 1.8 percent to “other.” These numbers come from an analysis of a nationally representative set of districts’ spending plans—from which actual spending can diverge substantially—compiled by data aggregator Burbio. 

“A lot of people are looking for averages,” Roza said. “And the thing about it is, every district gets to decide how they’re spending money. So one district could spend it on facilities and the next district over can give everybody a raise, and the next, next district over can launch into a massive tutoring plan. And so the average doesn’t really mean anything if those three are spending their money in very different ways.”

The Dallas Independent School District is such an example. It has used its ESSER funds to experiment with adjusted school year calendars: 41 schools in the district are using an intersession calendar, where five intersession weeks are added to the school year. Only some students are invited to the intersession weeks, although others can opt in. Teachers likewise choose to work the intersession weeks. The remaining students and teachers have the intersession weeks off from school. Five other schools in the district have an extended calendar for all students and staff, and the remaining 184 schools use a regular calendar. 

District-level standardized test results released since then have largely tracked with state-level improvements in test results. But more students at campuses following the adjusted calendars “showed above average levels of growth in Reading relative to matched comparison campuses,” according to a February 2022 report. “Extended year campuses showed high rates of growth in Math, and overall higher than Reading, but fell below matched comparison campuses.”

In Dallas’ case, information on spending and outcomes was available. But Roza doubted that that would be the case elsewhere: “We’ve been talking to states to try to get richer data from them, if they have it. And one of the states told us last week, ‘I mean, I’ll just be honest with you. We’re never going to know how this money was spent.’ And I was like, ‘I think you’re right, but wow, I can’t believe we’re a year in and that’s sort of what we’re acknowledging.’”