Frequently Asked Questions: American Recovery and Reinvestment Act of 2009 (ARRA)
The following questions and answers are provided to assist ASHA members in understanding how this law will impact them, their students, schools, and states. While there are many federal programs receiving ARRA funds, this document focuses upon programs administered by the U.S. Department of Education.
Why is funding for education considered economic stimulus?
The answer to this question focuses on ARRA's twin goals: short and long-term economic impact. In the short-term, ARRA aims to stimulate the economy by reducing cuts to education. Estimates indicate that at least half the states are confronting fiscal crises and cutting education as a result. Cutting education funding often means layoffs, discontinuation of programs, and indefinite postponement of new initiatives. Moreover, during times of economic crisis, programs serving children and youth with disabilities are often cut; further straining systems that are already stretched beyond capacity.
By infusing more funding into education in the short-term, ARRA seeks to avoid layoffs and program cuts, especially in programs that help individuals with disabilities. It also aims to create new jobs needed to implement new initiatives.
In the long-term, ARRA seeks to ensure better educational outcomes, thus preserving the economic health of the nation. To that end, ARRA provides the U.S. Secretary of Education with discretionary funds to grant local education agencies (LEAs), nonprofit partnerships, or consortia of LEAs, funds for innovative programs designed to prepare students to succeed in the global workforce. By investing in these programs, ARRA hopes to ensure long-term job growth for the nation.
How does ARRA provide additional funding for education?
ARRA provides over $100 billion for education programs. Much of this money will be distributed to state education agencies (SEAs) and LEAs through existing programs, such as the Individuals with Disabilities Education Act (IDEA); Title I; and Student Financial Assistance and Higher Education (including Pell Grants). ARRA also includes $53.6 billion for a State Fiscal Stabilization Fund, which intends to provide fiscal relief to states and prevent tax increases and cutbacks in critical services, namely education. Of the State Fiscal Stabilization Fund, Governors must use $40 billion to restore support to elementary, secondary, and higher education. (See the following questions for more information on State Fiscal Stabilization Fund.)
Where do I apply for ARRA funds?
Individuals cannot directly apply for federal ARRA funds. The federal government is sending ARRA education funds directly to states and local agencies (in the case of IDEA and Title 1 ESEA), who then decide how to use and distribute them. Inquire about how ARRA funds are being distributed by contacting your administrators, local education agencies (school districts), and/or state departments of education, then advocate accordingly for the funds.
What is the timeline for use and distribution of IDEA funds?
The Department of Education has released the following timeline for IDEA specific ARRA funds:
- February 17, 2009: H.R. 1, signed in to law (P.L.111-5)
- March 6, 2009: U.S. Department of Education releases "Fact Sheets" on ESEA, IDEA, and SFSF
- April 1, 2009: 50% of IDEA, Part B ($5.65 billion) and Section 619 ($200 million) funds awarded to the states. At least 50% of IDEA Part C ($250 million) funds made available to the states. Governors are eligible to apply for 67% of State Fiscal Stabilization Funds (SFSF) ($32.5 billion).
- May 3, 2009: Federal Agencies to make Performance Plans publicly available. Federal Agencies to begin reporting on their allocations for entitlement programs
- May 15, 2009: Detailed agency financial reports to become available
- May 20, 2009: Federal Agencies to begin reporting their competitive grants and contracts
- July 1, 2009: Remaining 33% of SFSF funds ($21.1 billion) awarded to states
- July 15, 2009: Recipients of Federal funding to begin reporting on their use of funds
- September 30, 2009: Federal fiscal year 2009 ends
- October 1, 2009: Federal 2010 fiscal year begins; remaining 50% of IDEA Part B ($5.65 billion) and Section 619 ($200 million) funds awarded to states. FY2010 appropriations released to states.
- September 30, 2010: Federal fiscal year 2010 ends. Local Education Agencies (LEAs) must obligate 85% of its total FY2009 ESEA Title I, Part A funds (ARRA + appropriations).
- October 1, 2010: Federal fiscal year 2011 begins
- September 30, 2011: All remaining IDEA and ESEA Title I ARRA funds to be obligated
I understand that ARRA provides over $12 billion to special education. How much of that money will go to my SEA and LEA?
ARRA provides $12.2 billion to IDEA programs, which will flow to SEAs and LEAs using the same funding formula currently used by IDEA programs, based on the timelines described above. The U.S. Department of Education has published data charts detailing how much additional funding SEAs will receive for IDEA Part B (school-aged students); Part B Section 619 (preschool children); and Part C (infants and toddlers). The Congressional Research Service has also published charts listing individual LEA allocations.
Is it true that IDEA's Part C Infants and Toddlers with Disabilities Program will receive and extra $500 million through the stimulus bill? How will this money be allotted?
Part C funding will be distributed through the same IDEA funding formula used to distribute annual Part C funds. The U.S. Department of Education (ED) awarded 50 percent of the IDEA, Part C Grants for Infants and Toddlers with Disabilities program ARRA funds to lead agencies on April 1, 2009. The other 50 percent will be awarded by September 30, 2009. These awards will be in addition to the regular Fiscal Year (FY) 2009 Part C Grants for Infants and Families program awards that will be made on July 1, 2009. Together, these grant awards will constitute a state's total FY2009 Part C Grants for Infants and Families program allocation.
A state does not need to submit a new application to receive the first 50 percent of the Part C Grants for Infants and Families program ARRA funds because these funds are being made available to each state based on the state's eligibility established for FY2008 IDEA, Part C funds and the provision of the certification required by section 1607 of the ARRA. The assurances in the state's FY2008 application, as well as the requirements of ARRA, apply to these ARRA funds. In order to receive the remaining 50 percent of IDEA, Part C ARRA funds, a state must submit, for review and approval by ED, additional information that addresses how the state will meet the accountability and reporting requirements in section 1512 of the ARRA.
ED has reserved approximately $71 million of the IDEA, Part C recovery ARRA for State Incentive Grants under section 643(e) of the IDEA to provide funds 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. A state that wishes to receive a State Incentive Grant must submit with its FY2009 application the policies and other information showing it has met the requirements in sections 632(5)(B)(ii) and 635(c) of the IDEA. All ARRA funds reserved by ED, but not allocated to states eligible for Incentive Grants, will be reallocated proportionately to all states on July 1, 2009.
In accordance with the goals of the ARRA, a state should obligate IDEA, Part C ARRA funds expeditiously. States may begin obligating IDEA, Part C ARRA funds immediately. All IDEA, Part C ARRA funds must be obligated by September 30, 2011.
What can SEAs and LEAs spend the additional IDEA funding on?
The additional IDEA funding provided by ARRA will be distributed through the existing funding formulas. This means that the allowable uses for these funds are the same as they always are for IDEA funds. The U.S. Department of Education has emphasized, however, that ARRA funds should be used for investments that can be sustained after ARRA funding expires, such as:
- Assistive technology devices and training in their use;
- Focused professional development;
- Data collection enhancements;
- Expanding the availability and range of inclusive placements for preschool children with disabilities; and
- Hiring transition coordinators and job developers for students entering the workforce. See ASHA's ARRA Web page for more information on uses of ARRA funds.
How long will the IDEA funds provided by ARRA remain available?
LEAs must obligate all IDEA ARRA funds by September 30, 2011. The $11.3 billion provided by ARRA to IDEA Part B (school-aged students), $400 million for IDEA Part B Section 619 (preschool children), and the $500 million for IDEA Part C (infants and toddlers) will be available during school years 2008-2009, 2009-2010, and 2010-2011. Importantly, according to the U.S. Department of Education, "[a]n LEA should obligate the majority of these funds during the school years 2008-09 and 2009-10 and the remainder during school year 2010-11."
How much of this funding can SEAs use for state administration and state level activities?
ARRA funds do not increase the amount that a SEA would otherwise be able to reserve for state administration or other state-level activities. SEAs are held to amounts already identified in their FY2009 awards.
Is IDEA fully funded because of this investment in special education?
No. However, ARRA would bring the percentage from its current 17.2% to 34.2%, a significant step forward, but still not full funding. When IDEA was originally enacted in 1975, Congress committed to providing 40% of the national average per pupil expenditure to assist SEAs and LEAs with the excess cost of educating students with disabilities.
Does the new funding in ARRA serve as a baseline for future funding of IDEA programs?
It is unclear. The U.S. Department of Education guidelines on IDEA and the State Fiscal Stabilization Fund repeatedly note that funding provided by ARRA represents a one time, historic infusion that is expected to be temporary and should not be used in a way that would create unsustainable commitments after ARRA funding runs out.
However, because all IDEA programs have been underfunded for decades, ASHA believes ARRA's investment must be the baseline for future federal funding of special education programs. ASHA and its members have long advocated for full funding of IDEA and therefore, will advocate for ARRA's substantial investment to remain intact and increase in the future. Full funding is ASHA's goal.
What are the key elements of the State Fiscal Stabilization Fund?
The State Fiscal Stabilization Fund (SFSF) program is a new one-time appropriation of $53.6 billion under ARRA, of which the U.S. Department of Education (ED) will award governors approximately $48.6 billion by formula.
The federal awards are in exchange for a commitment from governors to advance essential education reforms to benefit students from early learning through post-secondary education, including: college- and career- ready standards; valid and reliable assessments for all students; development and use of pre-K through post-secondary and career data systems; increasing teacher effectiveness and ensuring an equitable distribution of qualified teachers; and turning around the lowest-performing schools.
ED will award the remaining $5 billion competitively under the "Race to the Top" and "Investing in What Works and Innovation" programs. The SFSF will help:
- Stabilize state and local government budgets in order to minimize and avoid reductions in education and other essential public services.
- Ensure that local educational agencies and publicly funded institutions of higher education (IHEs) have the resources to avert cuts and retain teachers and professors.
- Support the modernization, renovation, and repair of school and college facilities.
- Support education (including school modernization, renovation, and repair), public safety, and other government services.
Additional information on the State Fiscal Stabilization Fund is available on ED's Web site.
Does ARRA include any reporting and accountability requirements for the use of the money? How will I know how the money is spent?
Yes. ARRA requires all participants to report publically on their use of ARRA funds. First, in terms of IDEA, recipients will follow all guidelines currently set forth in funding formulas. But, to receive the second infusion of IDEA funds on October 1, 2009, SEAs must submit an amendment to their FY2009 applications, explaining what record keeping and reporting requirements LEAs will use to ensure transparency. It will be important for members to understand what information their states will require to track use of these funds.
In addition, all funds distributed from the State Fiscal Stabilization Fund contain very specific reporting requirements that include how and when money was spent and detail what if any progress was made because of the funding.
The U.S. Department of Education is currently finalizing the details of state reporting requirements, which when final will be available on Recovery.gov. The Office of Management and Budget (OMB) released a notice requesting comments on the standard data elements for use in complying with reporting requirements under ARRA.
What other programs are funded by ARRA that affects individuals with communications disorders?
A variety of programs funded by ARRA impacts individuals with communications disorders. These include healthcare, research, school improvement, and child and family services. Please visit ASHA's ARRA Resources Web site for more information on these programs and funds.
Does ARRA address Medicaid?
Yes. Of great interest to ASHA members is the extension of the current moratoria on controversial Medicaid regulations, which would cut or eliminate the reimbursement for targeted case management, rehabilitation services, transportation and administrative claiming for Medicaid-eligible children with disabilities. ARRA extends the current moratoria to July 1, 2009.
Where can I find more information on ARRA
ASHA is committed to providing up-to-date information on ARRA and how it affects special education on its ARRA Resources Web site, including links to a variety of additional resources.