The provisions of the American bailout plan for education


  • The House Committee on Education and Labor has allocated $ 170 billion for education as part of President Biden’s US bailout.
  • States will receive $ 130 billion in additional funding to be paid to K-12 school districts, in addition to amounts allocated under the CARES Act (Coronavirus Aid, Relief, and Economic Security) and the Coronavirus Response. and Relief Supplemental Appropriations Act (CRRSA).
  • The US bailout requires states and local governments to keep their own education spending stable so they don’t use federal dollars to offset their own spending.
  • Colleges and universities will receive up to $ 40 billion in addition to the $ 14 billion allocated under CARES and the $ 22 billion allocated under CRRSA.
  • The US bailout contains no student debt relief; payments on student loans are currently deferred until September 2021.

House Democrats are currently working on the fiscal year 2021 budget reconciliation package, with hopes of a Senate move in the next two weeks. This new legislation contains several COVID-19 education aid provisions that extend to those of the CARES Act (Coronavirus Aid, Relief, and Economic Security) and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA). The new relief plan allocates a total of $ 170 billion for education, including $ 130 billion for kindergarten to grade 12, $ 35 billion for higher education and an additional $ 5 billion for state governors . It does not contain any student debt relief.

Additional emergency relief funding for elementary and secondary schools
The US Rescue Plan provides an additional $ 170.3 billion for the Elementary and Secondary School Emergency Relief Fund (ESSER). ESSER was originally created under the CARES Act to provide $ 13.2 billion in federal funds to states which then disbursed those funds to local education agencies. The funds were distributed according to the allocation formulas of Title I in force. These formulas weight more federal funding to local educational agencies with higher proportions of disadvantaged students.

Maintaining effort requirements in K-12 funding
The US bailout contains several “maintain the effort” requirements, which require state and local governments to keep their education funding levels in 2022 and 2023 commensurate with pre-pandemic levels. These requirements are probably very much needed, as the combined federal funds from CARES, CRRSA, and the American Rescue Plan represent between 16% and 53% of state education spending in 2018.

These data can be found here.

Additional funding for emergency higher education aid
The new bill provides an additional $ 35 billion for the Higher Education Emergency Assistance Fund (HEER). HEER was created under the CARES Act to initially provide $ 14 billion to colleges and universities, and it was sued under CRRSA with an additional $ 22 billion. US bailout funds will be allocated to higher education institutions based on the number of full-time Pell scholarship recipients they have, using the same formula as in CARES and CRRSA. Pell Grants are federal funds given to students who demonstrate financial need for their tuition fees, and unlike loans, Pell Grants do not need to be repaid. Using the Pell Grant distribution formula will direct funds more strongly to schools with more low-income students.

Student debt provisions
Under the CARES Act, holders of student debt could defer their monthly interest and principal payments until October 2020. Numerous executive orders issued by Presidents Trump and Biden have postponed this date until September 2021. Although that the US bailout does not contain any provisions on student debt. , during his campaign, President Biden signaled his support for the cancellation of $ 10,000 for each holder of federal student loans. This loan forgiveness will most likely be proposed in a separate law at a later date.

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