Special Report
Federal

Tips Given on Best Use of Stimulus Money

By Michele McNeil — April 07, 2009 5 min read

After delivering a stern warning that states and school districts must use their federal stimulus money smartly or risk losing billions more, U.S. Secretary of Education Arne Duncan and his staff are starting to spell out exactly what they mean by “smartly.”

Career coaches for graduating special education students. Summer programs to get students ready for algebra coursework. Smartboards and other interactive technologies to improve instruction. The list of the department’s suggestions, first unveiled at a meeting with 150 or so education organizations earlier this month in Washington, goes on.

Now that the Department of Education has laid out technical guidance on how to apply and account for funds under the American Recovery and Reinvestment Act, officials are ramping up the next part of their communications strategy: how states and districts should spend the money. What they’re revealing is essentially a blueprint for states and districts to follow if they want a good shot at the billions of dollars still sitting in the department’s coffers, waiting to be disbursed.

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“Our job is now to move the money from the state level to the local district level,” Marshall S. “Mike” Smith, a senior adviser to Mr. Duncan, told education groups at the April 3 meeting. “We will be, over the next two or three weeks, working with a lot of you to think about what does it mean to spend this money smartly.”

Beginning on April 1, $11 billion total in special education aid and Title I aid for disadvantaged students started making its way to states through existing formulas. And $32.5 billion from the State Fiscal Stabilization Fund, which is designed to prop up states’ education budgets, will be available as soon as states turn in their applications.

President’s ‘Vision’

The ramped-up communications strategy started with the early-April meeting, to which the department invited representatives from 200 education-related organizations, encompassing teachers’ unions, preschool advocates, higher education groups, and such areas as educational technology. About 150 people attended. A big part of the message from Mr. Duncan and his senior staff was how to spend the money.

Spending Priorities

The U.S. Department of Education has outlined ways school districts should use their shares of the federal stimulus package, which could provide up to $100 billion for K-12 education over two years. The main chunks of money flowing to districts come from several pots, and many of the suggestions below can be funded through multiple sources.

Title I

• Identify and use effective teachers as coaches and mentors.
• Create summer programs for algebra and other college-prep courses.
• Partner with colleges and nonprofit groups to create early-college programs.
• Close low-performing schools and reopen them with new staffs, new programs, and additional learning time.

State Fiscal Stabilization Fund

• Create new, fair, reliable teacher-evaluation systems based on objective measures of student progress and multiple classroom observations.
• Train educators to use data to improve instruction.
• Purchase instructional software, digital whiteboards, and other interactive technologies and train teachers in how to use them.

Individuals with Disabilities Education Act

• Offer training and dual certification for teachers of English-language learners and students in special education.
• Implement online individualized education programs (IEPs) aligned with state academic standards.
• Hire transition coaches to help graduating high school seniors find employment or get postsecondary training.

Source: U.S. Department of Education

They will continue spreading their message through weekly or biweekly webinars and conference calls.

“It was about message,” Karen Stratman-Krusemark, the Education Department’s liaison to education associations, said in an interview. “We’re recruiting them to make sure that we are about saving jobs, but that in doing that, we’re promoting good reform.”

For local districts, though, it’s a balancing act—wanting to please federal officials in hopes of getting more money on one hand while also figuring out what is best for individual districts, organization leaders say.

“Every district is different, and it’s always helpful to receive advice about what might be the best use of stimulus funds,” said Claus von Zastrow, the executive director of the Washington-based Learning First Alliance, a group of 18 education organizations that represent school districts, teachers’ unions, and other education advocacy organizations. “But the challenge is not to be too prescriptive.”

Department officials are also making clear that the ideas for spending the money aren’t just coming from the department, or even Secretary Duncan.

“This is a vision of the president’s,” Mr. Smith told the group.

What’s at stake for districts and states is a second round of stimulus money. Part of it is the 33 percent of the $48.5 billion state stabilization fund that the department is holding back to make sure states use the money on education, and to make progress on key improvement efforts spelled out in the stimulus law. The department expects to start awarding that money beginning July 1.

Mr. Duncan is dangling another $5 billion in incentive and innovation grants that will go to states and districts—the so-called “Race to the Top” money that will be awarded solely at the department’s discretion. That aid will be awarded in two rounds—late fall of 2009, and the summer of 2010.

Avoiding the ‘Cliff’

Referring to the application for those competitive grants, Mr. Duncan said: “The first question, ... I promise you, will be what did you do with the stabilization money to drive reform and improve achievement? If there’s isn’t a good answer to that, they might as well just tear up the form.”

The Education Department’s suggestions for how to use the money balance the need to spend billions of dollars quickly with the need to avoid a “funding cliff” that will occur as early as 2011, when the stimulus money disappears.

The agency’s spending suggestions center on the four areas of reform that are highlighted in the stimulus legislation’s four “assurances” that states must make progress on as a condition of accepting state stabilization money. They are: progress on increasing teacher quality and effectiveness, establishment of data systems linking information from preschool to higher education, turnarounds of low-performing schools, and creation of better and higher academic standards.

Those areas will also be central to awards from the Race to the Top fund, department officials said.

Mr. Smith told school groups they should ask themselves five questions before spending the stimulus money: Will the money drive results for students? Increase long-term capacity for teachers, schools, and districts? Accelerate reform? Avoid the funding “cliff”? And allow for results to be tracked?

Secretary Duncan also said that in the coming weeks, the department will highlight the kinds of existing improvement efforts and programs in states and districts that should serve as models for the use of stimulus money.

“This is the starting point on the communications agenda,” Mr. Duncan said.

Some champions of education redesign are concerned that, in the race to spend the money quickly, states and districts may not target the funds towards making progress on the four assurances spelled out in the law.

Last week, more than 30 organizations, including the Bill & Melinda Gates Foundation, a philanthropy based in Seattle, and the U.S. Chamber of Commerce in Washington, sent a letter to Mr. Duncan urging him to make reform a priority in allocating a second round of stimulus money, slated to go out later this year.

“We encourage you and the department to embrace your authority to persuade, incentivize and assist states and districts to use these funds to fundamentally change the system so all young people receive an excellent education,” they wrote in the April 16 letter. “While we appreciate the speed and efficiency by which the department is delivering these much-needed funds, ... speed and efficiency must not trump reform and improvement.”

Staff Writer Alyson Klein contributed to this story.
A version of this article appeared in the April 22, 2009 edition of Education Week

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