President Obama's fiscal year 2010 request for education must be seen in the context of the unprecedented investments in education from preschool to college provided by the American Recovery and Reinvestment Act (Recovery Act). The Recovery Act included significant additional one-time funding increases in several key areas, and most funds are available for expenditure over the next 2 years. In general, most States and school districts will receive one-half to two-thirds of Recovery Act education funds by early summer, and can expect to receive remaining Recovery Act funds by early fall 2009, at the beginning of fiscal year 2010 (which starts October 1, 2009). The availability of a significant portion of Recovery Act education funds in fiscal year 2010 and beyond was taken into account in the Administration's development of the 2010 request for certain programs receiving funding under the Recovery Act.
Congress provided Recovery Act education funding through two methods. A little over half ($53.6 billion) of the total provided to the Department is for the State Fiscal Stabilization Fund (SFSF), a separately authorized program created by Congress for the two-fold purpose of saving education jobs and promoting reform. The remaining funds, roughly $44 billion, were appropriated for currently authorized Federal education programs. Allocation information is available at http://www.ed.gov/about/overview/budget/statetables/index.html. The Department made available more than half of its Recovery Act funds in April 2009, and expects to award most of the remaining funds by September 30, 2009.
The Department has developed four principles that should guide State and local use of Recovery Act funds:
Spend funds quickly to save and create jobs.
Improve student achievement through school improvement and reform. In addition to saving jobs and stimulating economic activity, Recovery Act education funds are intended to help close achievement gaps and improve educational outcomes. The SFSF program requires progress on four reforms that the Administration believes should, wherever possible, guide the use of all Recovery Act funds:
Making progress toward the development and implementation of rigorous, internationally benchmarked, college- and career-ready standards and high- quality assessments;
Establishing pre-K-to-college-and-career data systems that track individual progress and support continuous improvement;
Making improvements in teacher effectiveness and in the equitable distribution of effective teachers for all students, particularly students who are most in need; and
Providing intensive support and effective interventions for the lowest- performing schools.
Ensure transparency, reporting, and accountability. To help ensure that funds are spent on effective activities, recipients must publicly report on how funds are used.
Invest one-time ARRA funds thoughtfully to minimize the "funding cliff." Because Recovery Act funds are available only for 2-3 years, they should be invested in ways that do not result in unsustainable continuing commitments after the funding expires.
ACCOUNTABILITY, TRANSPARENCY, AND WWW.RECOVERY.GOV
President Obama has made clear that every dollar spent under the ARRA will be subject to the most stringent standards of accountability and transparency. A Governmentwide Recovery Accountability and Transparency Board will coordinate and conduct oversight of program funds to prevent fraud, waste, and abuse. The Board will maintain a public website—www.recovery.gov—that will monitor the progress of the economic recovery and the use of funds under the Act. In addition, the Department of Education will post all State applications for Stabilization funding on http://www.ed.gov.
In general, States must ensure that all Recovery Act funds are spent in accordance with Federal law and regulations, and must separately account for, and report quarterly on, how those funds are spent. Each State's governor also is required, by section 1607 of the Recovery Act, to certify that the State is requesting Recovery Act funds and that the funds will be used to create jobs and promote economic growth. In addition, for each year of the SFSF program, States must report to ED on, among other things: (1) the use of funds provided under the program; (2) the estimated number of jobs created or saved with program funds; (3) estimated tax increases that were averted as a result of program funds; and (4) the State's standing with respect to fulfilling the application assurances.
STATE FISCAL STABILIZATION FUND
Most of the funds provided for the State Fiscal Stabilization Fund ($48.6 billion) will be used for State formula grants based on each State's relative shares of individuals aged 5 to 24 and of total population. These State formula grants are further divided into an Education Stabilization Fund receiving 81.8 percent of each State's total allocation and a Government Services Fund receiving the remaining 18.2 percent of each State's total allocation.
The Education Stabilization Fund helps maintain State support for public elementary, secondary, and postsecondary education, and, as applicable, early childhood education programs and services. The Government Services Fund is intended to support other government services, including public safety, health care, social services, though it also may be used to support education. In addition, both funds also may be used to support school modernization.
On April 1, 2009, the Department announced the availability of $32.6 billion under the SFSF, representing two-thirds of the total dollars in the Fund. This includes $26.6 billion for Education Stabilization to save jobs and improve K-12 and higher education and a separate $6 billion for Government Services to pay for education, public safety or other government services.
For this first phase of SFSF funding, the Department developed a streamlined application that requires commitments from States that they will collect, publish, analyze and act on basic information regarding the quality of classroom teachers, annual improvements in student achievement, college readiness, the effectiveness of State standards and assessments, progress on removing caps on the number of charter schools, and interventions for turning around underperforming schools. These commitments are the first step toward meeting Recovery Act requirements that States show:
Improvements in teacher effectiveness and in the equitable distribution of effective teachers;
Progress toward college- and career-ready standards and rigorous assessments that will improve both teaching and learning;
Improvements in achievement in low-performing schools, by providing intensive support and effective interventions in those schools.
The ability to gather information to improve student learning, teacher performance, and college and career-readiness through enhanced data systems that track student progress.
The second phase of SFSF funding will include $13.1 billion for Education Stabilization and $2.9 billion for Government Services. Each State will receive the remaining portion of its SFSF allocation after the Department approves the State's plan outlining its strategies for addressing the education reform objectives described in the assurances required by the Recovery Act. This plan must also describe how the State is implementing the record-keeping and reporting requirements under the Recovery Act and how SFSF and other funding will be used in a fiscally prudent way that substantially improves teaching and learning. For example, a State plan might include the submission of data on teacher and principal rating systems, efforts to improve the quality of State academic assessments, the performance of schools undergoing restructuring, and the implementation of longitudinal systems for tracking the performance of individual students. States may be required to demonstrate progress with respect to having systems in place to provide parents, teachers, and policymakers with clear and consistent information about where our schools and students stand.
The two final pieces of the State Fiscal Stabilization Fund are the Race-to-the-Top grants and the What Works and Innovation Fund. In fiscal year 2010, the Department will award $4.4 billion in competitive Race-to-the Top (RTTT) grants to States on the basis of their plans for and progress on the objectives described in the four reform areas discussed above, in addition to other factors such as the thoughtfulness and viability of their overall State plan for dramatically improving student achievement and closing achievement gaps, and how well the four reforms described above are integrated within that agenda. The Secretary's expectation is that recipients of RTTT awards will have exhibited significant progress and will be well-positioned to achieve dramatic progress in increasing student achievement and closing achievement gaps and, therefore, serve as models for other States.
The $650 million What Works and Innovation Fund will support competitive grants to LEAs and partnerships between nonprofit organizations and LEAs that have made significant progress in improving student achievement, or have demonstrated significant improvement in other areas, to expand their work and serve as models of best practices. The fiscal year 2009 funds, along with the fiscal year 2010 request for an additional $100 million, would support grant awards to (1) evaluate promising new initiatives and approaches to determine if they are suitable for scaling up; (2) scale up approaches that have been proven to improve student achievement across districts and States; (3) support the development of "model districts" that implement multiple evidence-based strategies that have been proven to increase student achievement and which could be adopted by districts throughout the Nation; and (4) leverage partnerships with the private sector and the philanthropic community to develop, scale up, document, and disseminate best practices that have demonstrated success in improving student achievement. The Department will encourage recipients to use comprehensive approaches to improving student performance that draw on multiple strategies for improving the quality of teachers and principals, curriculum and assessments, and student support services.
TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES
The Recovery Act also provided $10 billion in additional fiscal year 2009 Title I Grants to Local Educational Agencies (Title I, Part A) funds to local education agencies (LEAs) for schools that have high concentrations of students from families that live in poverty. These funds are intended to help improve teaching and learning for students most at risk of failing to meet State academic achievement standards. Title I is the cornerstone of standards-based accountability systems that the Elementary and Secondary Education Act (ESEA) requires for participating States and LEAs to help ensure that all students are proficient in reading and mathematics, identify and turn around low-performing schools, and close achievement gaps. The additional Recovery Act Title I funds create an unprecedented opportunity for educators to implement innovative strategies and make one-time investments with long-term benefits that improve education for at-risk students and close achievement gaps while also stimulating the economy.
On April 1, 2009, the Department awarded 50 percent of each State's Title I Recovery Act funds under their existing, approved ESEA Consolidated State Application. The remaining funds will be awarded by September 30, 2009, after States have submitted, for review and approval by the Department, additional information that addresses how the State will meet the accountability and reporting requirements of the Recovery Act. Title I Recovery Act funds will be combined with the regular fiscal year 2009 appropriation for Title I Grants to LEAs, increasing the total amount available in fiscal year 2009 from $14.5 billion to $24.5 billion.
States and LEAs must use Title I Recovery Act funds consistent with the statutory requirements of Title I, Part A of the ESEA. However, because this is a large, one-time increase in Title I funding that likely will not be available beyond September 30, 2011, the Department recommends that LEAs give careful consideration to short-term investments with long-term benefits in such areas as the following: intensive, year-long teacher training and school leadership development; strengthening early childhood education; implementing new curricula, including, for example, online courses in mathematics and science; development and implementation of extended learning time strategies; and using longitudinal data to drive school improvement.
In addition to Title I Grants to LEAs, the Recovery Act appropriated $3.0 billion for Title I School Improvement Grants, a program that makes formula grants to States to help States and LEAs implement statutorily specified actions to turn around low-performing Title I schools that have been identified for improvement, corrective action, and restructuring. States must distribute 95 percent of their allocations to LEAs, giving priority to LEAs with the greatest need for additional school improvement funds and the strongest commitment to help identified schools meet their improvement goals.
The Department plans to begin awarding Recovery Act School Improvement Grants in fall 2009 following a rigorous application process that, among other factors, will emphasize (1) the need for comprehensive State plans to use Recovery Act funds to build capacity to support school and LEA improvement at the State and local levels, (2) the identification and use of best practices to turn around low-performing schools, and (3) the targeting of school improvement resources on the lowest-performing schools, including "dropout factories" and their feeder schools.
As with all Recovery Act funds, States and LEAs will be required to use funds in accordance with applicable Federal law and regulations and report to the Department quarterly on how funds are used.
INDIVIDUALS WITH DISABILITIES EDUCATION ACT
The Recovery Act provided $12.2 billion for State formula grant programs authorized by the Individuals with Disabilities Education Act (IDEA), including $11.3 billion for Part B Grants to States, $400 million for Part B Preschool Grants, and $500 million for Part C Grants for Infants and Families. The Department awarded 50 percent of the IDEA, Part B Grants to States, Preschool Grants, and Part C Infants and Families Recovery Act funds to States on April 1, 2009, based on each State's fiscal year 2008 eligibility status. The remaining 50 percent of Recovery Act funds for these three programs will be awarded by September 30, 2009, after States have submitted, for review and approval by the Department, additional information addressing how they will meet the accountability and reporting requirements specified in the Recovery Act. The total Recovery Act awards will be combined with the regular fiscal year 2009 awards to produce each State's total 2009 allocations for Part B Grants to States, Preschool Grants, and Part C Infants and Families.
All IDEA Part B Recovery Act funds must be used consistent with existing statutory and regulatory requirements. An LEA must use IDEA Recovery Act funds only for the excess costs of providing special education and related services to children with disabilities, except where IDEA specifically provides otherwise. As with the Title I Recovery Act funds, the Department emphasizes that IDEA Recovery Act funds constitute a large one-time increment in funding that offers States and LEAs a unique opportunity to improve teaching and learning for children with disabilities, and that funds should be used for short-term investments that have the potential for long-term benefits, rather than for expenditures that LEAs may not be able to sustain once the Recovery Act funds are expended. Some possible uses include obtaining state-of-the art assistive technology devices and providing training in their use; providing intensive district-wide professional development for special education and regular education teachers; and developing or expanding the capacity to collect and use data to improve teaching and learning.
The process for awarding IDEA Part C Grants for Infants and Families Recovery Act funds is identical to the process for IDEA Part B Recovery Act funds. Consistent with the requirements of the IDEA, the Department reserved $71 million of Part C Recovery Act funds for State incentive grants to State lead agencies that elect to carry out the Flexibility to Serve Children Three Years of Age until Entrance into Elementary School provisions in sections 632(5)(B)(ii) and 635(c) of the IDEA. Any unused portion of this reservation will be reallocated to States.
All IDEA Part C Recovery Act funds must be used consistent with existing statutory and regulatory requirements. Suggested uses of these one-time funds include the provision of in-service training to early intervention program staff and providers; training families to work with their infants and toddlers with disabilities; developing high-quality State and local data systems to improve the delivery of early intervention services; and obtaining state-of-the-art assistive technology devices and related equipment.
REHABILITATION ACT
The Recovery Act included $540 million for the Vocational Rehabilitation (VR) State Grants program, authorized under Title I of the Rehabilitation Act of 1973, as amended (Rehabilitation Act). The VR State Grants program provides grants to States to help individuals with disabilities, especially those individuals with the most significant disabilities, prepare for, obtain, and maintain employment.
The Department awarded 50 percent of the VR Recovery Act funds to State VR agencies on April 1, 2009. The remaining funds will be awarded by September 30, 2009. These funds are allocated to State VR agencies under the program's allotment formula and based on each State's eligibility for fiscal year 2009 VR State Grant funds. To receive the remaining 50 percent of VR Recovery Act allocations, States must submit information, for review and approval by the Department, that addresses the recordkeeping and reporting requirements in the Recovery Act.
All VR Recovery Act funds must be used consistent with the Federal statutory and regulatory requirements. Suggested uses of these one-time funds include serving individuals on waiting lists in agencies currently using an order of selection; increasing services to eligible consumers; and expanding services to traditionally underserved and unserved populations in the State, including students with disabilities transitioning from school to the workplace. The Department also encourages States to use VR Recovery Act funds for system improvements, such as obtaining or improving effective case management systems that provide the agency with enhanced program management and evaluation capabilities, providing training to VR counselors and staff in the effective utilization of rehabilitation technology by VR program participants, the implementation of effective and innovative evidence-based VR practices to improve employment outcomes for persons with disabilities, and the analysis and use of data to improve VR services and employment outcomes.
The Recovery Act also appropriated significant new funding for the Independent Living (IL) programs authorized by the Rehabilitation Act. The IL programs support services to individuals with significant disabilities and older individuals who are blind to maximize their leadership, empowerment, independence, and productivity, and to promote the integration and full inclusion of individuals with disabilities into the mainstream of American society. The Recovery Act provided $18.2 million for IL State Grants, $34.3 million for Services to Older Blind Individuals, and $87.5 million for the Centers for Independent Living (CIL) program.
The Department awarded Recovery Act funds for the IL State Grants and Services for Older Blind Individuals programs on April 1, 2009. The total Recovery Act awards will be combined with the regular fiscal year 2009 awards to produce each State's total allocations for these programs. States received these awards on the basis of their existing, approved applications and plans. Like other competitive grant programs funded by the Recovery Act, the Department is proposing to make awards for the CIL program in late summer or fall.
In general, grantees under the IL State Grants, Older Blind Individuals, and CIL programs should use Recovery Act funds to improve and expand IL services; serve additional consumers, especially populations that are unserved or underserved in the State; increase the capacity of IL service providers; and maximize employment opportunities and economic benefits to individuals with significant disabilities consistent with the goals and objectives established by individual consumers. Some examples of short-term investments with the potential for long-term benefits include providing services to additional individuals who wish to transition from nursing homes to their communities; creating more efficient and effective ways of increasing IL services to students with disabilities transitioning from school to employment and independent living; building long-term capacity by purchasing equipment, improving connections, and obtaining software in order to better serve consumers; and providing professional development opportunities to service provider staff.
IMPACT AID CONSTRUCTION
The Recovery Act provided $100 million in formula and competitive grants for Impact Aid Construction, authorized under section 8007 of the Elementary and Secondary Education Act of 1965, as amended. On April 13, 2009, the Department announced the award of $39.6 million in formula grants to 180 LEAs with military bases, Indian reservations and other Federal property that do not generate local tax revenues. Payments were based on the number of eligible federally connected children in average daily attendance who are dependents of members of the uniformed services or children living on Indian lands. Awards must be used for construction activities, including the preparation of drawings and specifications for school facilities; erecting, building, acquiring, altering, remodeling, repairing, or extending school facilities; and inspecting and supervising the construction of school facilities. ED encourages recipient LEAs to use these funds for projects that can be initiated promptly after the receipt of the awards.
The Department will use remaining Recovery Act Impact Aid Construction funds, after reserving 1 percent of the appropriation for management and oversight, to make $59.4 million in competitive Impact Aid Construction grants. The Recovery Act included the following selection criteria that will be used to evaluate applications for these competitive awards: the current health and safety risk of a facility to school students and personnel; the facility's capacity to support the needs of the current enrollment; the facility's capacity to provide a comprehensive educational program that meets current State standards; the extent to which projects would use energy-efficient and recyclable materials; the use of non-traditional or alternative building methods to expedite construction and maximize cost efficiency; the feasibility of completing the project within 24 months; and the availability of other resources for the project. Competitive awards may be used for the allowable purposes described above for formula grants.
EDUCATION FOR HOMELESS CHILDREN AND YOUTHS
The Recovery Act included $70 million for the McKinney-Vento Education for Homeless Children and Youths program, which is authorized under Title VII-B of the McKinney-Vento Homeless Assistance Act. These additional resources will assist States and local educational agencies (LEAs) in addressing the educational and related needs of some of the most vulnerable members of our society—homeless children and youth—during a time of economic crisis in the United States. The Department awarded 52 Homeless Children and Youths grants totaling $69.2 million on April 13, 2009. The Recovery Act requires States to distribute funds to districts via formula or competitive process within 120 days of receiving their allocations, or by August 11, 2009.
In general, Recovery Act funds must be used for activities authorized under Title VII-B of the McKinney-Vento Act and are subject to the same statutory and regulatory requirements as regular program funds. However, the 120-day deadline for making local allocations may require changes on how States reserve funds for their own use and allocate remaining funds to eligible LEAs. For more information, see the Department's guidance at http://www.ed.gov/policy/gen/leg/recovery/index.html#homeless.
OTHER PROGRAMS FUNDED BY THE RECOVERY ACT
The Recovery Act provided additional funding for three Department of Education competitive grant programs that are intended to drive school improvement and reform. The Department is developing application packages for these programs, and expects to award Recovery Act funds by late fall 2009.
Teacher Incentive Fund
The Recovery Act included $200 million for the Teacher Incentive Fund (TIF), which encourages school districts and States to develop and implement innovative performance-based compensation systems that reward teachers and principals for raising student achievement and for taking positions in high-need schools. The competition for these funds will place a priority on the support of comprehensive, aligned approaches that support improved teacher and principal effectiveness and help ensure an equitable distribution of effective educators, that actively involve teachers and principals in the design of human capital and compensation systems, and that use data from emerging State and local longitudinal data systems to track outcomes and associate those outcomes with educator performance. Examples of such approaches include higher pay to recognize individual teacher and principal contributions to increased student performance; evaluation systems that provide ongoing feedback and support to teachers about their performance; higher pay to attract and retain individuals or teams for service in hard-to-staff schools or to teach a shortage subject; and alternative compensation strategies that reward increased performance, taking on new responsibilities or roles, or demonstrated expertise linked to student needs and student growth.
Teacher Quality Partnership
The Recovery Act provided $100 million for the Teacher Quality Partnership program, a recently reauthorized program that seeks to improve student achievement and the quality of teachers working in high-need schools and early childhood education programs by improving the preparation of teachers and enhancing professional development activities for teachers; holding teacher preparation programs accountable for preparing effective teachers; and recruiting highly qualified individuals, including minorities and individuals from other occupations, into the teaching force.
Statewide Data Systems
And third, the Recovery Act included $250 million for Statewide Data Systems to help ensure that States and LEAs have the robust data systems they need to provide information on individual student outcomes, from early childhood to participation in higher education and the workforce, that educators and policymakers can use to drive educational improvement.
Summary of the 2010 Budget 
Elementary and Secondary Education
For further information contact the ED Budget Service.