To assist decision makers, this post summarizes five things that school and district leaders should know about the major education provisions in the CARES Act. It also contains information pertaining to nonprofits. This summary was prepared for The Wallace Foundation by EducationCounsel, a mission-based education organization and law firm that has analyzed the text of the new law.

1. The $2.3 trillion CARES Act provides new, one-time funding for states, districts and schools—based in part on poverty but with significant flexibility regarding where funds are used.

The law includes a $30.75 billion Education Stabilization Fund divided into three parts and meant to provide initial relief to states and districts facing education challenges stemming from the coronavirus. The parts are:

1. The $13.5 billion Elementary and Secondary School Emergency Relief Fund. States will receive this funding based on the number of students in poverty in the same manner as funding is provided under Title I, Part A, of the Elementary and Secondary Education Act—better known today as ESSA, the Every Student Succeeds Act. States must allocate 90 percent of that funding to districts, including charter schools, based on Title I, Part A. Districts have flexibility on how to target the funds they receive, including how and which schools are funded. States have flexibility on how to target the 10 percent of funding they retain. One way to think about this funding is that it equates to about 80 percent of the most recent year’s Title I, Part A, funding.
2. The $3 billion Governor’s Emergency Education Relief Fund. States will receive funds based on a combination of both school-age population and rates of poverty, and governors have wide discretion over use of these funds to support K-12 or higher education.
3. The $14.25 billion Higher Education Emergency Relief Fund. Institutions of higher education will receive this funding directly, and they have broad latitude over its use, although at least 50 percent of their allocations must support emergency financial aid grants to students for expenses, such as food, housing, course materials, technology, healthcare and child care. About $1 billion of the higher education relief fund is earmarked for Historically Black Colleges and Universities as well as Minority Serving Institutions.

Other provisions in the CARES Act directly support early childhood education, including $3.5 billion for the Child Care and Development Block Grant program and $750 million for Head Start.

Afterschool providers should consider additional relief offered through small business loans. Through the Paycheck Protection Program, the CARES Act provides federally guaranteed loans to small businesses—including nonprofits—with fewer than 500 employees. These loans can be forgiven if the employer keeps its employees on the payroll. After the enactment of the CARES Act, the Paycheck Protection Program quickly depleted its $350 billion allocation; however, Congress has passed a bipartisan agreement to replenish some of its funding.

2. The U.S. Department of Education will allocate K-12 education funds to states, which will then disburse funds to districts, but this could take several weeks or more.

On April 23, the Secretary of Education released the application states  will need to fill out to receive K-12 funding from the Education Stabilization Fund. States have until July 1 to complete the applications, and once received by the department, they are to be reviewed and approved within three business days. The department’s state application forms require states to provide technical assistance, if applicable, to districts on district use of funding for remote learning. The form also asks states to describe how they could use their state funding to support technology capacity and student access to technology.

Each state will make Elementary and Secondary Relief Funds available to districts, using Title I formulas. The districts will then make decisions about funding priorities. Although there is an expectation that all involved will move quickly, the process could well take time to unfold—even as states and districts approach the end of their school and/or fiscal years. This means that district and school leaders should consider thinking about use of funds not only for immediate needs but also for the longer term, that is, over the summer and into the coming school year.

3. The CARES Act provides districts (and states) with broad discretion over how they use new funds.

The Elementary and Secondary Relief Fund provides district leaders with broad authority over both the targeting of funds to specific schools and the use of funds more broadly. The CARES Act includes a long list of allowable activities, including any activities authorized under a range of existing federal education laws, as well as a long list of activities broadly related to coronavirus, such as support for principals and other school leaders to meet the needs of their schools; support for education technology essential to   distance learning; and support for measures to address the unique needs of low-income students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness and foster care youth. Also on the list is support for summer learning and afterschool programs.

States, meanwhile, have broad authority over spending from the Governor’s Education Relief Fund and their 10 percent share of dollars from the Elementary and Secondary Fund.

Given this, state, district and school leaders should quickly consider:

• How to use federal funds most effectively;
• What data, evidence and input they will use to inform those decisions; and
• How to coordinate efforts and adopt the most coherent approach across funding streams, including with regard to CARES Act funds supporting early childhood and higher education.

4. The CARES Act creates expedited waiver authority regarding ESSA requirements, but federal civil rights laws remain.

In addition to establishing the Education Stabilization Fund, the CARES Act authorizes the Secretary of Education to approve, upon state request, expedited waivers from ESSA requirements, including those regarding state assessments, accountability, and data reporting. If subject to waivers, schools identified for school improvement this school year would retain that status for the 2020-2021 year. Before the CARES Act became law, Education Secretary Betsy DeVos had already begun to approve state waivers for these requirements under existing ESSA waiver authority.

It is important to note that the CARES Act does not permit states or the Education Secretary to waive federal civil rights requirements. However, the act does require the secretary to report to Congress within 30 days on what additional waivers may be necessary, including with regard to the Individuals with Disabilities Education Act.

Upon request by a state or district, the education secretary may waive several financial requirements in ESSA, according to the CARES Act.  Among them are the limitation on carrying over Title I funding from the previous year, the requirement that a school have 40 percent of its students qualify for Title I to use funds schoolwide and the definition of “professional development” (so that districts can train and support teachers using methods that would not otherwise qualify). Also subject to waiver is the restriction on how much Title IV funding can be used for technology infrastructure and the requirement for a school to complete a needs assessment to justify use of Title IV funding. On April 6, the Secretary announced the creation of a streamlined process so that states can be approved for these waivers within one business day.

Last, the act requires states and districts to continue to meet “maintenance of effort” requirements regarding state and local education funding. However, the act also empowers the secretary to waive this requirement if states experience a “precipitous decline in financial resources.”

5. There are several actions that school and district leaders should consider taking now to promote the most efficient, effective use of CARES Act funds.

In the next several weeks, states and districts are slated to begin receiving CARES Act funds. The specific amounts have already been estimated for each state and district. There are three immediate steps that school and district leaders can take to prepare for these funds:

1. Identify the most critical needs—now and over time.  As noted above, school districts and states will have significant flexibility in use of CARES Act funds, including with regard to which schools and students are supported, and how funds are used. Now is the time to consider key data and evidence, as well as stakeholder input, to identify highest priorities. Given the outsized impact this crisis is having on the most marginalized children and families, decision makers should pay particular attention to equity and the children in greatest need, as well as to ensuring equitable access to education services consistent with federal civil rights laws.
   • For district and school leaders. Consider issues such as how these funds can close equity gaps in remote learning, support school communities that need them most, promote summer learning to mitigate further learning loss and aid good faith efforts to ensure equitable access to education resources for students with disabilities.
   • For state leaders. Consider statewide priorities but also how funds can be directed at places and populations with the greatest needs. Also consider whether and how to seek ESSA waivers while still keeping critical systems of data and school improvement in place long term. Finally, consider making widely available evidence on effective approaches to supporting districts, schools and students during the pandemic.
2. Maintain and improve systems for effective coordination and integration of funds. Districts and states have authority over different CARES Act funding sources. This means it will be important for school, district and state leaders to coordinate effectively about how best to target and use funds as part of a coherent approach to spending. Because CARES Act funds are supplemental and flexible, they can be combined with other state and local funds and strategies (including under ESSA plans) to promote an integrated approach. Further, family and community engagement can play a key role in making the best decisions and having the greatest impact.
   • For district and school leaders. Consider how to best engage families and communities to help identify the greatest needs and best strategies, and how to best engage with state leaders as well.
   • For state leaders. Consider what existing or new mechanisms could be used to ensure coordination and learning from the field. Think about how funds could be used most strategically with other plans and establish systems to determine how CARES Act funds are spent. This can help support continual review and improvement in use of funds over time.
3. Analyze and track additional needs as early as possible. The coronavirus crisis is far from predictable. Uncertainties include the duration of the pandemic as well as its impact on public health and safety, the economy, and state and local revenues. What it will mean for education opportunity and learning is another question mark. Further, the crisis could extend well into the next school year or beyond, and we cannot know when things will return to “normal” or what “normal” will or should look like. CARES Act funds are likely to be helpful but insufficient. Key national organizations representing school and district leaders have already begun to identify likely priorities for additional funding. To inform other policy actions over time, school, district and state leaders should act early to analyze the likely impact of the crisis on children’s development—academically, socially and emotionally—and on the education system.
   • For district and school leaders. Plan now for different scenarios in the fall and identify likely strategies and needs given your circumstances, including with regard to issues such as professional learning, student diagnostic assessments, and child and family supports.
   • For state leaders. Consider the same statewide, particularly the budget implications of the current crisis and what it will take to ensure equitable access to education resources, including greater support for children, families and communities in greatest need.