Education Funding

ESSER Isn’t the Only School Funding Relief That’s Disappearing Soon

By Mark Lieberman & Lauraine Langreo — February 13, 2024 10 min read
Vector illustration of a businessman's hand holding a slowly vanishing dollar sign.
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A slew of federal and state funding initiatives that helped schools weather the logistical and financial chaos of the pandemic are set to expire in the coming months or have recently done so—even as district leaders and advocates argue the need for those funds hasn’t gone away.

The highest-profile funding program set to dwindle is the last and largest round of $190 billion in emergency aid Congress sent to districts in three rounds between March 2020 and March 2021. Districts will have to commit all their remaining funds from ESSER to specific expenses by Sept. 30 or forfeit the remainder.

But ESSER isn’t the only set of dollars that’s on its way out.

Several states—including Idaho, New York, and Rhode Island—are winding down so-called “hold harmless” policies that temporarily allowed districts to receive per-pupil funding based on larger student-body numbers from previous academic years to prevent steep drops in state aid tied to enrollment declines. Major sources of funding for expanding access to essential technology are drying up. And supplemental federal investments or temporary provisions aimed at preventing children from going hungry, allowing low-income families to obtain medical care, and supporting schools that serve large numbers of homeless students have either already receded or will soon.

“The end of these programs marks the largest-ever reduction in publicly available resources in education—and we’ve known for a while it’s been coming,” said Katie Silberstein, the strategic project lead for the Edunomics Lab at Georgetown University.

A large number of districts anticipated the drop in financial support they’ll soon feel, devoting temporary funds to one-time expenses that won’t need to be covered with other funds later.

That’s because some district leaders appear to have learned lessons from the fiscal cliff that accompanied the end of the last major round of stimulus funds schools received from the federal government, during the Great Recession of 2008, said David Knight, an associate professor of education finance and policy at the University of Washington College of Education.

“I think there is this acknowledgment that they’re not dummies, they understand what temporary money means,” Knight said.

Still, districts will inevitably have to make some painful cuts as these sources of temporary help wind down. The expiration of these policies, then, raises a pertinent question that Knight thinks ought to be a major consideration: Why were they necessary in the first place?

Hold-harmless policies, for instance, were a response to enrollment declines in schools that would in normal times drain districts of financial resources necessary to support the students who remained. But these emergency measures didn’t address the underlying causes of a declining birthrate and the skyrocketing cost of housing.

“State and federal policy is designed to help schools address the things that are outside of their control,” Knight said.

Now, schools face a future with far less support for those challenges.

Here’s a look at funding programs set to expire in the coming months and the impact schools and students will experience as a result.

Federal COVID-relief aid

The federal government sent three waves of COVID-relief aid to schools totaling $190 billion between March 2020 and March 2021. The first two waves have already expired. The last one, colloquially known as ESSER III, ends later this year.

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Dezirae Espinoza wears a face mask while holding a tube of cleaning wipes as she waits to enter Garden Place Elementary School in Denver for the first day of in-class learning since the start of the pandemic.
David Zalubowski/AP

Most districts appear on track to commit all their ESSER funds to specific expenses by the Sept. 30 deadline. But some are facing a troubled post-ESSER future, with reduced staffing for teaching and mental health services, diminished support for struggling students, and fewer protections from oncoming enrollment-based funding cuts.

New York City schools may lose hundreds of social workers and summer and preschool programming for thousands of students. Schools in places like Jackson, Miss., and Wichita, Kan., may close as districts look to trim expenses and consolidate operations. And crucial corners of the K-12 ecosystem, like school libraries, may lose the opportunity to offer expanded services on the scale of the last few years.

The end of ESSER may prompt a renewed conversation about the school funding responsibilities of the federal government, Knight said. President Joe Biden promised on the campaign trail in 2019 to triple Title I funding to serve schools in low-income areas, but his administration has fallen well short of that lofty goal.

“There’s probably a lot of support for a dramatic permanent increase in federal funding in education,” Knight said.

Two other COVID-relief programs passed by Congress during that period also affected schools: the Emergency Assistance for Non-Public Schools grant for private education providers and the Governor’s Emergency Education Relief Fund, which gave each governor a set of dollars to allocate at their discretion to K-12 and higher education. Some states used the latter program to supply districts with additional COVID aid, while others made targeted investments, like $40 million for school nurses and psychologists in North Carolina and tens of millions of dollars for laptops for every child in Connecticut.

Both those latter relief programs have lapsed already.

‘Hold harmless’

In the early days of the pandemic, the vast majority of states passed a version of a hold-harmless policy, designed to protect school districts from the financial impact of declining or volatile enrollment trends.

Most states distribute school aid in large part based on a measure of districts’ enrollment numbers. Sudden drops, like the ones many districts have seen since the pandemic began, can lead to significant reductions in state assistance. Hold-harmless policies often base state funding on a previous year’s enrollment measure to temporarily ward off a sudden drop in funding.

Some states already abandoned those policies as of last year. Hold-harmless policies are set to expire this year in Idaho, New York, and Rhode Island.

Such policies proved helpful to districts that were already seeing enrollment drops prior to the pandemic, Knight said. On the other hand, the policies have their flaws—school districts with growing enrollment, for instance, end up with fewer resources per pupil than they would otherwise receive to serve their larger population.

In her annual State of the State address in January, New York Gov. Kathy Hochul defended the decision with a reminder that the federal government poured billions of dollars more than usual into K-12 education over the last few years.

“As much as we may want to, we are not going to be able to replicate the massive increases of the last two years,” said Hochul, a Democrat. “No one could have expected the extraordinary jumps in aid to recur annually.”

District leaders in the state have expressed widespread disapproval, however. Some say they were planning to avoid major cuts tied to the end of ESSER with the help of the hold-harmless provision but now will have to strongly consider laying people off to make ends meet.

In Rhode Island, meanwhile, K-12 enrollment has dropped by roughly 5 percent, or 7,000 students, in the last five years, to about 136,000 statewide this past fall.

Rather than cutting off funding for those empty seats all at once, the state is gradually ramping down its hold-harmless provision. For each student a district has lost since hold harmless went into effect in 2022, the state will cover 40 percent of their per-pupil allocation in the current school year, and 25 percent in the 2024-25 school year, before cutting off funding the following year.

Technology investments

To assist schools with emergency remote learning early in the pandemic, the federal government provided several temporary funding programs schools could use to purchase the tools needed for students to continue learning virtually.

ESSER funds were available to use for buying laptops and tablets, as well as tools to improve internet connectivity for students and staff. Many districts used that money to expand students’ access to broadband and digital devices, according to a 2022 report from the Association of School Business Officials.

But ESSER’s pending end poses technology-related challenges.

In North Carolina, for instance, 89 out of 115 districts surveyed by the state last month said that they haven’t identified sufficient funding to stay on track with “refresh cycles” for district-owned devices once ESSER runs out.

Along with ESSER, the federal government also created the Emergency Connectivity Fund, a $7.2 billion program to help schools and libraries provide students and staff with laptops, tablets, and broadband access. Those funds are set to expire on June 30.

There’s also the Affordable Connectivity Program, a $17.4 billion federal program that provides a discount on broadband internet for eligible low-income families. However, the Federal Communications Commission, which runs the program, expects the funding to run out by the end of April unless Congress provides additional funding.

The end of these programs, experts say, will make it harder to close the “homework gap,” a phrase used to describe the inequities between students who have digital devices and reliable home internet connectivity and those who don’t.

“All of these things coming to an end at the same time—it’s understandable since they were responses to a pandemic and the pandemic is over,” said Sarah Radcliffe, the director of future-ready learning for the Altoona school district in Wisconsin. “But it does add another layer of challenge to figure out how to continue to offer all the supports that families need from a school with the money that we have.”

All of the digital devices bought during the pandemic will need to be repaired or replaced in a few years, Radcliffe said. She said she’s revisiting her district’s replacement cycle “to try to get more years” out of them and “stretch our dollars out.”

School-adjacent programs

A handful of other federal programs and policy provisions temporarily helped low-income families afford food during the summer months and maintain health coverage, provided districts with supplemental funds to pay for services for homeless students, and distributed money so child care providers could stay afloat.

Those initiatives have already wound down, though Congress made one of them permanent—for states that have opted in.

  • The Pandemic EBT program, which sent EBT cards to low-income families when schools shut down so they could afford meals, has come to a close. But Congress made the program permanent in the form of the new Summer EBT program. But states have to opt in for their families to receive the benefit, and 14 states and the District of Columbia won’t participate this summer.

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Salina Sanchez gives free lunches to Damien Chavez, right, and Umar Kotroo at Wheel Park in Aurora, Colo., on June 6, 2019. The Aurora Public Schools takes free summer lunches to children on colorful, hand-painted school buses. The USDA's new Summer EBT program will help families cover the costs of meals during the summer months.
Salina Sanchez gives free lunches to Damien Chavez, right, and Umar Kotroo at Wheel Park in Aurora, Colo., on June 6, 2019. The Aurora Public Schools takes free summer lunches to children on colorful, hand-painted school buses. The new Summer EBT program from the U.S. Department of Agriculture will provide $120 per child in grocery benefits to families with children who qualify for free and reduced-price lunch during the school year. But 15 states aren't participating in the program's first year.
Philip B. Poston/The Aurora Sentinel via AP

  • As many as 4 million children may have lost Medicaid health coverage after a policy that brought unprecedented stability to the federally funded, state-administered program ended in late 2023. The temporary policy, called continuous enrollment, allowed Medicaid recipients to remain covered without filling out regular paperwork to confirm their eligibility.

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  • Congress in 2021 dedicated $800 million in emergency relief for the nation’s roughly 1.2 million homeless students through the existing McKinney-Vento funding program. The emergency funds have since dried up, even as advocates say homeless students continue to face major challenges and would benefit from additional school-based services. In most districts, the federal program pays for only a small portion of the costs of services for homeless students, leaving states and districts to cover the rest, a March 2023 report from the Learning Policy Institute found.
  • Federal subsidies to help child-care providers stay afloat during the height of the pandemic have gone away, prompting closures and staff shortages. A handful of states have proposed major investments to fill gaps. Virginia Gov. Glenn Youngkin, a Republican, included $900 million of child-care investments in his most recent state budget proposal, for instance. But many governors have not emphasized child care in their 2024 agendas.

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