How to Spend $100 Billion on Education

The stimulus money could help pay for college, Head Start, and special ed but not construction.

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Now that President Barack Obama has signed into law a $787 billion economic recovery plan, including an unprecedented $100 billion for public schools, the next task is getting that money out to states. But exactly how that will happen and how each state will spend the money is being worked out.

Education Secretary Arne Duncan has told U.S. News that, in addition to saving and creating jobs, he wants to use the stimulus to innovate and improve schools. The education funding contained in the stimulus could give Duncan the leverage to do that. Besides nearly doubling the budget of the federal Department of Education over the next two years, the stimulus package sets aside $5 billion for states that can prove to Duncan that they are raising student achievement by 1) improving teacher quality and getting better teachers into high-poverty schools, 2) raising academic standards and creating better tests, 3) using data systems that can track individual student growth, and 4) supporting struggling schools.

If $5 billion sounds like a paltry sum compared with the gargantuan size of the stimulus package, it's considerably more that previous education secretaries had. Even former Education Secretary Margaret Spellings, who presided over a massive expansion of the federal role in education with the testing requirements of the No Child Left Behind law, seemed in awe of Duncan's windfall. She told the New York Times that "as much confidence as I have in Arne Duncan, there's an awesome opportunity for slippage with that much money moving through the meat grinder." The newspaper suggested, tongue in cheek, that she might be a jealous of her successor.

Spellings, however, raises a legitimate point. Several education observers have warned about the dangers of getting so much money out to schools in a hurry. Duncan and Obama have promised to distribute the money in a timely and transparent fashion. Much of the education aid is expected to flow to states before July 1, the start of the new fiscal year. But other funds, such as the $5 billion for states that innovate and raise achievement, will take longer to go out. Duncan and his aides are hammering out those details.

Many groups knowledgeable about the stimulus, including the National Conference of State Legislatures, believe that the $53.6 billion state stabilization fund, which includes $39.5 billion in direct aid to schools, will help local districts avoid layoffs and cuts to education services. One study by the University of Washington says that 574,000 education jobs would be lost if states cut education spending by 15 percent over the next three years. That has caused critics of the stimulus, mainly conservative groups, to question whether the aid will really spur meaningful reform.

The stimulus also includes $13 billion to help states close the achievement gap. That money will flow to states based on their populations of low-income residents. Another $12.2 billion will go to states to educate students with special needs.

There is also $2.1 billion in the stimulus for Head Start and Early Head Start. The money could allow an additional 124,000 low-income infants and children to participate in these programs. According to estimates, this will also create 50,000 new early education jobs. But some studies have raised doubt that these programs help disadvantaged kids be better prepared when they start school.

The stimulus also offers relief to college students. It provides $15.6 billion to increase the maximum Pell grant by $500. The additional aid is expected to help 7 million students pursue college degrees.

The stimulus does not include any money for school construction. But it does set aside $8.8 billion in the state stabilization fund that can be used to make repairs and renovations to crumbling school buildings.

The National Education Association, a national teacher's union, has these preliminary estimates of the federal money that will be flowing to states:

Related content:

  • More on Arne Duncan
  • More on No Child Left Behind
  • More on Colleges in Recession
  • More on Economic Stimulus
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    No Child Left Behind
    Obama administration
    economic stimulus
    education
    education reform