Education Funding

ARRA Brings Home Mixed Report Card

By Michele McNeil — February 12, 2011 14 min read
Verdell Schoats is a “pride promoter” at Gilcrease Middle School in Tulsa, Okla. His job, which helps ensure safety in the halls and provides support to teachers on discipline, is financed with federal economic-stimulus money.
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Two years after Congress made the federal government’s largest one-time investment in the nation’s public schools, the American Recovery and Reinvestment Act—the economic-stimulus package—has prevented massive teacher layoffs, spurred states to devise sweeping education overhaul plans, and invigorated the national conversation about turning around the worst-performing schools.

Yet a critical question remains: Will the ARRA’s nearly $100 billion in education aid result in higher academic achievement, particularly for those students most at risk of academic failure? Or, in the words of U.S. Secretary of Education Arne Duncan, will the country’s education “moonshot” hit its target?

“We have a long way to go. We have not done it,” Mr. Duncan said in a December interview, adding that his goal is for the United States to lead the world in academic achievement. “We’re not even close,” he said.

Education was one of the biggest beneficiaries of the package signed into law by President Barack Obama on Feb. 17, 2009. The measure ultimately provided a total of $814 billion for a variety of purposes aimed at helping correct the worst economic downturn since the Great Depression.

Aid from the stimulus program is paying for this team of staff members at Gilcrease Middle School, in Tulsa, Okla., which has dealt with discipline and safety issues. From left are Tyrone Pelzer, Mary Ornelas, Eli Brown, Verdell Schoats, and Brian Davis. The federal money also is financing an extra 90 minutes for teachers and 70 minutes for students each day at the 330-student school.

The emergency aid saved or created an estimated 368,000 school-related jobs during the 2009-10 school year, according to the U.S. Department of Education’s accounting of data self-reported by states and school districts. Since states and districts have already spent three-quarters of the education stimulus money, however, and the economic recovery is slow-going, many of those jobs now hang in the balance.

But saving education jobs, even if only temporarily, was just one goal of the funding program. Congress and the Obama administration also demanded that state and school officials undertake significant education changes in return for the money.

As a result, states such as Delaware and Tennessee have revamped their laws to promote the growth of charter schools. Massachusetts, among others, has launched efforts to tie teachers’ evaluations to student performance. A persistently failing high school in Oregon is spending a record amount on additional training for teachers, a move that reflects similar commitments elsewhere.

Yet a far-ranging review of the stimulus program by reporters from 36 news outlets in 27 states, working in a collaboration overseen by the Hechinger Institute on Education and the Media and the Education Writers Association, shows that its lasting impact on public education is far from certain. Indeed, this review shows, many of the resulting policy changes are already endangered by political battles and the big budget shortfalls still facing recession-battered state and local governments.

At the same time, several prominent stimulus-financed policy prescriptions face sharp scrutiny. Many educators believe the Obama administration’s embrace of ideas such as charter school expansion and teacher pay systems tied in part to student test scores is misguided, and they question the use of federal cash incentives for their adoption.

Randi Weingarten, the president of the American Federation of Teachers, said: “If states want to figure out ways to ensure good teaching, let’s do that by developing a fair and comprehensive teacher-evaluation system.”

And still others who generally supported the stimulus found problems with how the programs were implemented, particularly with how the Obama administration stressed the effort’s twin goals of saving jobs and sparking reform. “The mixed messages around the stimulus, which in some cases translated into conflicting and confusing guidance, caused problems,” said Andrew J. Rotherham, a partner at Bellwether Education Partners, a nonprofit education consulting firm. “Bigger picture: Was it supposed to be reform or be stimulus or both?”

Flood of Funding

The nearly $100 billion in education aid has flooded the education zone through different channels. Some of it has gone through existing Title I and special education formulas. A sizable chunk was distributed on a school-age-population basis to states to help stabilize their budgets.

And a small but significant portion of it was awarded through grant competitions, such as the $650 million Investing in Innovation, or i3, program. Last summer, 49 school districts and nonprofit organizations were selected to share that money, which is meant to scale up innovative, promising practices.

Another program, the Obama administration’s hallmark Race to the Top initiative, became the largest grant competition ever undertaken by the federal Education Department. It poured $4 billion into grants for the winners: 11 states and the District of Columbia.

The Race to the Top may turn out to underscore just how tough it is to overhaul long-established aspects of education, even with hefty federal rewards.

A case in point is Massachusetts, a national leader in student achievement, which won $250 million in the competition.

Although an important element of the Massachusetts application was buy-in from local teachers’ unions, their support for the proposed changes remains tenuous. At issue is how to incorporate results of standardized student tests into teacher evaluations, a practice the state promised to move toward in exchange for the federal money.


The American Recovery and Reinvestment Act, the federal government’s $814 billion economic-stimulus package, provided more than $100 billion in funding for precollegiate and higher education programs. In addition to preventing the loss of education jobs because of budget cuts, the ARRA legislation, signed into law in February 2009, aimed to promote innovative education policies.

The largest share of the education funding in the ARRA was directed to K-12 programs through the U.S. Department of Education. The department received slightly more than $79 billion that could be used for that purpose. More than half of that money was allocated to the State Fiscal Stabilization Fund to help states restore funding for education programs cut from their budgets as a result of the economic downturn. Most of the money in that stabilization fund was distributed to states based on population; $5 billion in discretionary incentive and innovation grants was awarded through competitive processes.


SOURCES: American Recovery and Reinvestment Act of 2009; EPE Research Center, 2011; U.S. Department of Education, 2010

“It’s been clear all along that people were only signing on to it for the money,” said Richard Stutman, the president of the Boston Teachers Union, an affiliate of the American Federation of Teachers. “No one has signed this because they thought it was a sound education concept. People have signed on because there’s a recession.”

Mr. Stutman’s union did not sign on. But even those unions that did give their assent have reservations.

“We’re a cash-strapped city that doesn’t support public schools,” said Timothy Collins, the head of the Springfield Education Association, a National Education Association affiliate, which represents teachers in the 25,000-student Springfield, Mass., school district. “We need the resources.”

What’s more, the document signed by teachers’ unions supporting the state’s application actually has several outs. It requires only a “good-faith effort” from all parties to implement the promises made in the application and promises that nothing in the application would override collective bargaining agreements. That means any changes will have to be negotiated district by district, in a state with historically strong unions.

The agreement also terminates when the grant money runs out in four years, meaning there is no guarantee of enduring change. (Other states, including Florida, also incorporated many outs for their participating districts.)

There are also signs of uncertainty among many of the districts that will have to help Massachusetts make good on its application promises, such as increasing the high school graduation rate. In recent weeks, 19 of them dropped out of the Race to the Top effort, mostly because they realized they would not be getting large grants under the formula used to divvy up the money.

Bumps Ahead

The rocky outlook for changes in K-12 policy isn’t limited to the 12 Race to the Top winners.

In the run-up to the competition, 13 states, including first-round winners Delaware and Tennessee, changed their laws to create or allow more charter schools in their states, and all but seven states have agreed to enact common academic standards. Eleven states changed laws to tie teacher evaluations to student achievement.

Those moves and others designed to improve schools have turned out to be a costly gamble for many states that lost in the competition.

Roosevelt High School, in Portland, Ore., above, is receiving nearly $12,000 in extra funding per student under the economic-stimulus program. The school, which graduates fewer than 40 percent of its students, is putting an intense focus on improved teaching strategies in its stimulus-funded turnaround effort.

One such state is Connecticut, which has one of the largest achievement gaps in the country. It is on the hook for a $300 million reform agenda, which was adopted in a sweeping new state law.

Now, as the state faces a $3.5 billion deficit out of a $20 billion budget, school districts still reeling from painful budget cuts last summer will have to figure out how to pay for the online and Advanced Placement courses the law mandated. They will also have to track student data, devise new tests, and provide remedial help. And they must hire additional math, science, and language teachers and possibly build science labs to support a more rigorous high school curriculum.

“Talk about unfunded mandates,” said Elin Katz, a school board member in suburban West Hartford. “I don’t know how we’re going to do this.”

Meanwhile, the state is trying to figure out how it can accomplish the changes for less. Rather than bringing in consultants to train parents in how to become more engaged in schools, the state plans to post educational sessions on the Internet, said Tom Murphy, a spokesman for the Connecticut Department of Education. Rather than design new end-of-year tests for high school courses, the state may borrow tests from other states, he said.

“We are trying to find a way to establish these reforms without the benefit of having millions to do it,” Mr. Murphy said.

Turnaround Push

While the Race to the Top drew plenty of publicity, another pot of education stimulus money was almost as big—and it was spread among all states: $3 billion in School Improvement Grants aimed at fixing the schools that persistently rank in the lowest-performing 5 percent in each state.

Though not a competition, the School Improvement Grants were awarded to districts that applied to their states for funding.

Roosevelt teachers attend a professional-development class funded through the stimulus. Teacher training has been a popular use of American Recovery and Reinvestment Act aid for school districts, second only to technology.

Few high schools in the nation are getting as much related financial help as the 700-student Roosevelt High in Portland, Ore., which was awarded nearly $12,000 in extra funding per student.

How will the school, which graduates fewer than 50 percent of its students, turn around? Roosevelt teachers say one key element is the all-out focus on improving teaching strategies, including robust training and in-class coaching from some of the strongest teachers in the school.

Teachers say that, until this year, they had gone years without a supervisor observing them in action. That left them free to plot their own course, set their own standards, and, at times, flail without support. “To never have someone check in on what you’re doing was just not right,” said math teacher Alison Strom.

Unlike most of the other stimulus funds, the School Improvement Grants came with significant strings. States and districts had to choose among four models prescribed by the federal government to deal with a school identified for such attention: closing the school and sending its students to higher-performing ones; replacing half of a school’s staff; restarting the school as a charter school; or using a “transformation” model that includes a basket of strategies such as extending learning time.

Education Jobs Created or Saved

367,524 jobs were reported saved during the 2009-10 school year


SOURCES: EPE Research Center, 2011
U.S. Department of Education

But a report in August by the Washington-based Center on Education Policy found districts largely unprepared to implement the models. One-third of the nation’s school districts said they weren’t familiar with the models, and only 12 percent had had any experience trying them out.

“Prescribing four specific models is not wise,” said Jack Jennings, the center’s president and chief executive officer and a former longtime Democratic congressional aide. “There’s an awful lot of money that’s going to be spent very fast.”

In Oklahoma, a mostly rural state, the biggest chunk of school improvement money is concentrated in six “persistently low-performing” schools in Tulsa. All of them have adopted the transformation model, but two are doing something that hasn’t been tried in previous reform efforts there because of its price tag: extended learning time.

“If kids are behind, they need more time on task. But with the financial difficulties we have been dealing with, we couldn’t have done this without [this money],” Tulsa Superintendent Keith Ballard said.

In the district’s 330-student Gilcrease Middle School, the grant is funding an extra 90 minutes for teachers and 70 minutes for students each day, plus salaries and benefits for five new employees. Two of them are “pride promoters,” who help ensure safety and order in the halls and provide extra support to teachers dealing with minor discipline issues.

Discipline problems got so out of hand at Gilcrease during the 2008-09 school year that the superintendent canceled classes there for three days in the middle of the year. Phyllis Lovett, who was introduced as Gilcrease’s new principal at the beginning of the 2009-10 school year, says the additional help from the “pride promoters” is contributing to growing stability at the long-struggling school.

“The perception among parents is that this school isn’t safe,” Ms. Lovett said. “This school is safe now, but the reputation has preceded us.”

District and school leaders readily admit that the precariousness of state revenue sources in Oklahoma makes the sustainability of expensive school improvement measures such as extended learning time questionable at best.

“The way I see it now is, at the worst, we [will have had] three years of extended learning time for those kids,” said Mr. Ballard, the Tulsa superintendent. “At the best, the tough financial times will be over, and we will find a way to continue it.”

Common Use

Teacher professional development is a common use of School Improvement Grants, and of all the stimulus funding. Yet much of that spending has been overshadowed by the more splashy components of the Race to the Top.

“It worries me very much that they spent their own money and federal money on professional development when I think most districts do very poor professional development,” said Tim Daly, the executive director of the New Teacher Project, a national teacher-training organization based in New York City.

In Texas, most districts that used the federal money for professional development focused on supporting current programs or training teachers to use new technology or instructional materials purchased with other stimulus funds.

Districts there shied away from investing in major new professional-development programs for several reasons, said Sandy Maddox, the associate director of a Texas Education Agency regional-service center that provides staff development to school districts. First, districts were concerned about starting programs they would have to find funding for later. Second, the money came quickly and “needed to be spent,” she said.

One exception is Garland, Texas, a large suburb of Dallas. That district is using $150,000 in stimulus aid to try to change education across the district by providing several training sessions over two years to help all employees—from bus drivers to administrators—better deal with students. “Change in the classroom? We hope so,” said Assistant Superintendent Phyllis Parker.

A lot of the stimulus money must be spent by Sept. 30, although awards such as the Race to the Top and School Improvement Grants have longer shelf lives.

Shelf Life

With aid running out, states must now figure out how to keep paying for the education jobs the federal money has supported, even as their own economies struggle. Helping, at least temporarily, is an additional $10 billion Congress approved in August for educator jobs as part of a state aid package called the Education Jobs and Medicaid Assistance Act.

Math teacher and coach Alison Strom helps student Ania Warren with her algebra at Roosevelt High.

Even so, this budget year, 13 states are making a combined $1 billion in unexpected, midyear cuts to K-12 education, according to a November 2010 report by the National Association of State Budget Officers and the National Governors Association.

The situation isn’t likely get better next budget year, when nearly half the states are expecting overall budget gaps. And 17 states are predicting they’ll still have shortfalls in fiscal 2013.

Michael Griffith, a fiscal analyst with the Denver-based Education Commission of the States, said it will take up to three years before states fully recover from the recession, which officially began in December 2007 and ended in June 2009. “Even with stimulus money, districts had to make pretty large cuts,” he said. “The money prevented them from cutting muscle and bone.”

The money also came with an important catch: It was for one time only, and the federal Education Department warned states and districts to beware of a funding cliff once the money ran out. With that in mind, U.S. officials stressed that stimulus money should be spent wisely, on purposes and personnel that would not add to a district’s overall bottom line.

In Connecticut, last summer’s budget cuts resulted in bigger class sizes, teacher layoffs, and reductions in programs. While figuring out how to pay for the changes the legislature mandated to compete for a Race to the Top grant, local schools are also worried about what will happen this coming summer when the stimulus funds that have propped up their budgets are exhausted.

State Rep. Larry Cafero, the Republican leader in the Connecticut House, said: “If I’m a superintendent of schools, I’m sweating right now.”

This article includes contributions from Noah Bierman, of The Boston Globe; Andrea Eger, of the Tulsa World; Betsy Hammond, of The Oregonian (Portland); Karel Holloway, of The Dallas Morning News; and Grace Merritt, of The Hartford Courant (Conn.).
A version of this article appeared in the February 09, 2011 edition of Education Week as ARRA Brings Home Mixed Report Card


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