The American Recovery and Reinvestment Act of 2009 (ARRA) provided approximately $97 billion to the Department of Education with the primary goal of delivering emergency education funding to States. Immediately after President Obama signed ARRA into law on February 17, 2009, the Department acted swiftly to provide a large portion of these funds to States in response to drastic budget shortfalls. As of December 31, 2009, the Department had awarded over $69.3 billion to States, or 71 percent of its total ARRA funds.
State Fiscal Stabilization Fund
ARRA provided a total of $48.6 billion for the State Fiscal Stabilization Fund (SFSF) to help sustain and create jobs and advance education reforms. Of this total, $39.8 billion is dedicated to public elementary, secondary, and higher education, as well as early childhood education services, and $8.8 billion is available for a broader range of activities, including education, public safety, or other government services. As of mid-January 2010, the Department had obligated $36.9 billion in SFSF funds.
Based on the information States provided in their SFSF applications, States plan to use SFSF funds to restore nearly 100 percent of their budget gaps in the 2008-09 school year and a significant portion of their 2009-10 shortfalls. For example, 31 States reported using $13.1 billion in SFSF grants to fill emergency shortfalls for fiscal year 2009 (the 2008-09 school year), while 48 States reported using $20.3 billion to fill anticipated shortfalls for fiscal year 2010 (the current 2009-10 school year).
These funds restored 9 percent of K-12 education funding in California, Indiana, Alabama, and Oregon; 12 percent of such funding in Florida, Wisconsin, and South Carolina; and 23 percent of K-12 education funding in Illinois. In addition, ARRA funds were used to mitigate tuition increases at public universities in at least 24 states. For example, the University of Massachusetts was able to rebate a $1,500 fee increase and instead charge only the standard annual increase to cover the cost of inflation. At the University of Minnesota, an expected tuition increase was cut by about half. In Virginia, ARRA funds kept tuition increases to the lowest rate since 2002.
As of October 2009, the Department estimated that 325,000 education jobs had been retained or created through ARRA education grants. These jobs include positions for teachers, principals, and support staff in elementary and secondary schools, and educational, administrative, and support personnel in institutions of higher education. In addition, approximately 73,000 other jobs (including both education and non-education positions) were saved or created from the SFSF Government Services Fund, Federal Work Study, and Impact Aid fund, bringing the total number of jobs supported by the Department's ARRA grants to nearly 400,000.
Title I and IDEA
The ARRA also provided $10 billion in supplemental funding for ESEA Title I Grants to LEAs and $12.2 billion for programs authorized by the Individuals with Disabilities Education Act (IDEA), including $11.3 billion for IDEA Part B Grants to States. Unlike funds provided under SFSF, ARRA funds for Title I and IDEA programs must be used in a targeted fashion as the laws require.
Race to the Top
The Race to the Top program will provide $4 billion in ARRA incentive grants to States that develop the most promising plans to advance reforms around four specific areas specified by the ARRA:
Awards in Race to the Top will go to States that are leading the way with ambitious yet achievable plans for implementing coherent, compelling, and comprehensive education reform. Race to the Top winners will help trail-blaze effective reforms and provide examples for States and local school districts throughout the country to follow as they too are hard at work on reforms that can transform our schools for decades to come. The Department received 41 State applications for the Phase 1 competition, which were due by January 19, 2010, and expects to announce the Phase 1 winners in April 2010. Applications for the Phase 2 competition are due by June 1, 2010, with Phase 2 winners scheduled to be announced in September 2010.
School Improvement Grants
The ARRA provided an unprecedented $3 billion in supplemental funding for the Title I School Improvement Grants (SIG) program, under which States make subgrants to LEAs with the greatest need and strongest commitment to turning around their lowest-performing schools. The Department published new regulations in December 2009 and January 2010 which generally defined "greatest need" as those LEAs with Title I eligible schools that are either in the bottom 5 percent of each State's schools in terms of proficiency on State assessments in reading/language arts and mathematics or, in the case of secondary schools, have graduation rates below 60 percent. Such LEAs must demonstrate the "strongest commitment" to turning around such schools by agreeing to implement one of 4 rigorous school intervention models in these schools: the turnaround model, restart model, school closure, or transformation model.
State applications for $3.5 billion in fiscal year 2009 SIG funds ($3 billion in ARRA SIG funds plus $545.6 million in SIG funds from the regular fiscal year 2009 appropriation) are due to the Department by February 8, 2010, and LEAs will begin implementing their improvement plans in fall 2010.
Investing in Innovation (i3)
The Department is using $650 million in ARRA funds for a new Investing in Innovation (i3) program that will make competitive investments in cutting-edge ideas aimed at producing the next generation of school reforms. The Department published a notice of proposed priorities in October 2009 and expects to complete the final requirements for the i3 program in early 2010. Applicants could receive funding for "scale-up" grants, which would expand proven models and interventions with the potential to improve educational outcomes for hundreds of thousands of students; "validation" grants, aimed at improving the evidence base for promising reform programs; and "development" grants, which would test new ideas for improving student outcomes. Grant recipients would be required to match their Federal awards with other private dollars, and to demonstrate how they would sustain their activities after the end of the Federal award period.
Race to the Top Assessments
Consistent with the emphasis of the ARRA on stronger standards and assessments, the Department has set aside up to $350 million of Race to the Top funds to support States in the development of the next generation of academic assessments. Given the highly technical nature of this work, the body of knowledge that exists around how to best develop assessments, and the many promising practices currently employed across the country and world, the Department held a series of expert input meetings in Atlanta, Boston, and Denver during November and December 2009 covering such subjects as general assessment, high school assessments, assessing students with disabilities, assessing English learners, and the use of technology and innovation in assessment. The Department also convened 3 meetings in January 2010 to obtain public and expert input on assessment development with regard to project and consortium management, procurement, and general and technical assessment matters. These meetings, which also were intended to facilitate sharing of information among States and the public, will help the Department develop the priorities and requirements of the Race to the Top Assessment competition.
Summary of the 2011 Budget 
Elementary and Secondary Education
For further information contact the ED Budget Service.