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An Unparalleled Investment in U.S. Public Education: Analysis of the American Rescue Plan Act of 2021

Learning in the Time of COVID-19 blog series: The American Rescue Plan Act of 2021 by Michael Griffith

This post is part of LPI's Learning in the Time of COVID-19 blog series, which explores evidence-based and equity-focused strategies and investments to address the current crisis and build long-term systems capacity.

President Biden has just signed into law the American Rescue Plan Act of 2021 (ARPA), which provides $1.9 trillion in federal stimulus funding to help state and local governments—as well as individual taxpayers and businesses—address the impact of COVID-19. This act provides just over $170.3 billion to education, making this the federal government’s largest ever single investment in our schools. State and district leaders now have the opportunity and responsibility to use these funds to address short-term needs associated with the pandemic and to invest in the structural changes that will, over the long term, make schools more equitable and whole-child focused.

An Unparalleled Investment in Public Education

ARPA provides a total of $170.3 billion in funding for education. This includes more than $125.4 billion for state k–12 public education programs and $39.6 billion to higher education, with the remaining funds going to other educational programs and activities. The act also provides $7.2 billion in funding for the federal E-Rate program, which will be extended to provide devices and connectivity to students, educators, and patrons of public libraries. Under this legislation, governors will also receive $2.75 billion in funding to assist private schools that “enroll a significant percentage of low-income students and are most impacted by the qualifying emergency.” Since last spring, the federal government has provided k–12 public schools with just over $200 billion (approximately $4,000 per student) in funding to address the impact of COVID-19 (see below).

Federal Investment in Public K–12 Education Since the Beginning of the Pandemic

CARES Act $13.2 billion
Coronavirus Response and Relief Supplemental Appropriations $54.3 billion
ARPA: E-Rate $7.2 billion
ARPA: K–12 Education $125.4 billion
Total Federal Funding $200.1 billion


What Will Public Schools Receive?

ARPA includes $122.8 billion for the Elementary and Secondary School Emergency Relief Fund (ESSER). ESSER funds will be distributed to states in the same way that the last two federal rescue packages were distributed: based on their relative Title I, Part A funding. The first $800 million of ESSER funding must be used by states to provide educational and wraparound services to students experiencing homelessness. The bill requires states to distribute the remaining $122 billion in the following manner:

  • Local Education Agencies (LEAs) ($109.8 billion): Ninety percent of funding will be distributed to districts based on their relative share of Title I, Part A funding.
  • Lost Learning Time ($6.1 billion): States must use at least 5% of their ESSER funding “to address learning loss by supporting the implementation of evidence-based interventions, such as summer learning, extended day, comprehensive afterschool programs, or extended school year programs, and ensure such interventions respond to students’ academic, social, and emotional needs and address the disproportionate impact of the coronavirus on [students of color, students from families experiencing low-incomes, students with disabilities, English language learners, migrant students, students experiencing homelessness, and students in foster care].”
  • After-School Programs ($1.2 billion): A minimum of 1% of state funding must be used for after-school programs that address students’ academic, social, and emotional needs.
  • Summer Enrichment Programs ($1.2 billion): At least 1% of funding must be used by states to provide students with evidence-based summer learning programs.
  • Administration Costs ($610 million): States can spend up to 0.5% of their funding on the costs of administrating this program.
  • Remaining State Funds ($3 billion): States will be allowed to use these funds on any of the allowable uses in the act (see below).

LEAs will be required to use at least 20% of the funds they receive ($22 billion) to address lost learning time for students. They will have the freedom to spend the remaining 80% ($87.8 billion) of funding based on local needs and priorities. A state-by-state breakdown of ESSER funding can be found here.

ARPA also provides more than $3 billion in funding for the Individuals With Disabilities Education Act (IDEA). IDEA supports the education of eligible infants, toddlers, children, and youth with disabilities. The act provides an additional $2.58 billion supporting IDEA grants for school-age children with disabilities. It also allots $200 million for IDEA preschool grants and $250 million in grants to support infants and toddlers with disabilities.

How Can These Federal Funds Be Used?

This act provides LEAs with nearly $110 billion through a single program with a great deal of flexibility. Funds can be spent on any educational expense allowed under the Elementary and Secondary Education Act, the Perkins Career and Technical Education Act, and IDEA, plus a number of specific allowable uses. States and districts can use these funds to make high-leverage investments to:

  1. Accelerate student learning through extended school year, summer enrichment, or high-quality, evidenced-based tutoring programs;
  2. Provide students and staff with safe school reopenings that align with public health guidance;
  3. Upgrade school facilities for healthy learning environments;
  4. Invest in wraparound supports, including through the use of community schools; and 
  5. Stabilize and diversify the educator workforce and rebuild the educator pipeline.

Provision for the Maintenance of Effort and Equity

The act contains several provisions that help ensure that federal funds are used in addition to—and not in place of—state and local education funding. For both the 2021–22 and 2022–23 school years, states and districts must follow the following guidelines:

  • Effort: States must continue to fund public elementary and secondary education and higher education at least at the proportional levels as the average annual funding over fiscal years 2017, 2018, and 2019. For example, if a state spent on average 26% of its total budget on k–12 and higher education between 2017 and 2019, then it must provide that same percentage of support in both 2022 and 2023.
  • Equity—State: In the 2021–22 and 2022–23 school years, high-need school districts are protected from states’ spending reductions in two ways. First, state per-pupil funding for the neediest half of districts cannot be reduced by an amount that exceeds the overall decrease in state funds. Second, per-pupil state funding for the 20% of districts with the highest percentage of economically disadvantaged students may not be reduced below pre-pandemic levels (FY 2019).
  • Equity—LEAs: LEAs shall not decrease either per-pupil funding (from state and local sources) or staffing levels for their high-poverty schools by an amount that exceeds districtwide reductions. The bill defines “high-poverty schools” as the 25% of schools serving the highest percentage of economically disadvantaged students in the LEA.
The [American Rescue Plan Act of 2021] contains several provisions that help ensure that federal funds are used in addition to—and not in place of—state and local education funding.

Time for State and District Leaders to Step Up

In this act, the federal government has provided a record amount of funding to public education. State and local leaders must use these federal funds on evidence-based policies and practices to address the pandemic’s impact on student learning. However, these federal funds should also be used to make systemic changes to our public schools so that they are funded more equitably to support investments in teaching, learning, and wraparound supports and so these resources are routinely available to close opportunity gaps. This bold initiative can launch a new norm that ensures digital capacity, expanded learning time, and social, emotional, and academic supports within community schools that nurture the whole child for years to come. Policymakers have this once-in-a-generation chance to refashion our public schools to ensure that they help all students achieve their full potential. The road to change will take time. However, the new federal investment in education will provide our public schools with the opportunity to return not just to our pre-pandemic status, but to an even better system that will support our students now and into the future.

LPI Deputy Director of Federal Policy Michael A. DiNapoli Jr. contributed to this blog.

Data for this interactive provided by LPI; design courtesy of Education Week. See related story at Education Week.