How to Decide How to Spend Elementary and Secondary School Relief Funds

The timing and rules may be less tricky than many think
Illustration of the Tennessee Reading 360 program
The Tennessee Department of Education is using ESSER and other U.S. Department of Education funds for its statewide Read 360 initiative, which includes tutoring and online supports to help develop systematic foundational literacy skills, high-quality phonics-based instructional materials, and other resources to support strong reading instruction.

States and districts have almost $122 billion coming their way from the American Recovery Program’s Elementary and Secondary School Emergency Relief (ARP ESSER) fund. Decisions on how to spend the money will have to be made quickly, because the ESSER funding timeline is fast, and student needs are substantial. In theory, the best way to determine how to spend the funds is relatively straightforward. In practice, though, it may feel more challenging. ESSER funds are new, so administrators may have questions about what is allowed, especially given that a broader range of possibilities is permitted under ESSER when compared to other federal education programs.

The Basics of Spending ESSER Funding

The $122 billion from the American Rescue Plan Act (ARP ESSER) is the third round of ESSER funding, which totals $189.5 billion in all. The first round (ESSER 1) was about $13 billion from the Coronavirus Aid, Relief, and Economic Security Act, and the second (ESSER 2) was roughly $54 billion from the Coronavirus Response and Relief Supplemental Appropriations Act. In all three rounds, 90 percent of the money must go to school districts, which have broad discretion over how to spend the funds. Districts must spend at least 20 percent of ARP ESSER funds to address learning loss through evidence-based interventions.

ESSER funds not allocated to districts are kept by states as “state-reserve” funds. States can spend ESSER 1 and 2 state-reserve funds on emergency needs to address issues related to coronavirus (and a small amount on administrative expenses). ARP ESSER state-reserve funds are subject to specific spending requirements. From the ARP ESSER state-reserve, states must spend 7 percent of the state’s total ARP ESSER allocation for evidence-based activities: 5 percent to address learning loss, 1 percent for summer enrichment, and 1 percent for comprehensive after-school programs. States may spend the remaining ARP ESSER state-reserve funds on emergency needs to address issues related to coronavirus (and a small amount on administrative expenses).

Before states and districts can understand what is possible under ESSER, they first have to understand the program’s rules, including timing and permissible spending options. ESSER can support many activities traditional U.S. Department of Education grant programs cannot, and, most important, misunderstandings about existing programs could shape ESSER implementation in ways that limit its potential.


States and districts have a limited time to spend ESSER funds, and understanding these timelines is vital for making decisions about which kinds of activities to support and when.

Each round of ESSER money has its own “period of availability.” This means, briefly, that ESSER funds can only pay for work performed during that period, contracts entered into during that period, or certain activities carried out during that period. These are known as “obligations,” which is a technical term under federal law.

Administrators have an extra year to spend all three rounds of ESSER money beyond what is written in Coronavirus Aid, Relief, and Economic Security Act, Coronavirus Response and Relief Supplemental Appropriations Act, and ARP because of a law outside of ESSER called the General Education Provisions Act. That means ESSER 1 is available for obligation until September 30, 2022, ESSER 2 until September 30, 2023, and ARP ESSER until September 30, 2024. ESSER funds must be liquidated within 120 calendar days after the end of each applicable obligation deadline.

States have a narrower window to make some important spending decisions, however. States have one year from the date they received each ESSER grant to choose whether to award state-reserve funds to other entities through grants and contracts or to spend funds directly.

What ESSER can support

ESSER is different from traditional U.S. Department of Education programs in two important ways. First, unlike many U.S. Department of Education programs that are limited to certain students (like the Individuals with Disabilities Education Act for students with disabilities) or schools (like Title I for schools with certain poverty levels), ESSER can benefit any or all students, staff, and schools. This means states and districts can invest in systemwide initiatives to equitably improve outcomes for all students, target funds to students with specific needs, or do both. Second, ESSER can support activities that some traditional programs cannot, like core instruction, facilities upgrades, and construction.

Taken together, this means states and districts need to think differently about ESSER spending. For example, in general, federal education funds cannot be used for districtwide high-quality core curricula. This limitation does not apply to ESSER, however, and some states are already taking advantage of this flexibility. The Tennessee Department of Education is using ESSER and other U.S. Department of Education funds for its statewide Read 360 initiative, which includes tutoring and online supports to help develop systematic foundational literacy skills, high-quality phonics-based instructional materials, and other resources to support strong reading instruction. The Nebraska Department of Education is using ESSER funds to provide statewide access to high-quality math instructional materials.

States and districts can also use ESSER funds for school facility and infrastructure improvements to reduce health risks, mental health supports for students and staff, extending learning time or reorganizing the school day to accelerate learning, extending broadband and device access, and much more.

For as many spending options as ESSER offers, though, there are other considerations that will affect state and local spending choices. Chief among these is the many federal administrative regulations that apply to ESSER, such as federal procurement rules districts must follow when buying goods or services with ESSER money, federal rules for construction, federally funded employee compensation, and more. These rules are manageable, but states and districts might be sensitive to the ways they complicate certain spending choices.

How perceptions of existing federal education programs could impact ESSER spending

Even though ESSER is not subject to the same kinds of constraints as other U.S. Department of Education programs, misunderstandings about those programs could end up as barriers to ESSER innovation.

Even though ESSER funds are distributed to states and districts based on Title I allocations, for example, ESSER funds are not subject to Title I’s spending rules—a point that is confusing to many.

Long-held misunderstandings about traditional U.S. Department of Education programs—particularly the two largest, the Individuals with Disabilities Education Act and Title I of the Elementary and Secondary Education Act—could also limit ESSER spending in unexpected ways, which may be more significant. Some state and district leaders mistakenly believe that an IDEA-funded service for students with disabilities cannot be provided to other students through another funding source. Some also believe that any service delivered to both students with and without disabilities cannot be considered a special-education service, regardless of how it is funded. Neither of these beliefs is correct, but they might make some districts reluctant to use ESSER funds in innovative ways.

One district considered using ESSER funds to expand the use of occupational therapists in its elementary schools to support students’ social and emotional needs after the return to in-person learning. Leaders in this district, however, were concerned that, because some students with disabilities receive occupational therapy as a special-education service, they could not offer services to non-disabled students without running afoul of federal special-education laws. This is not correct, but the district’s equivocation shows how misunderstandings about existing programs could inadvertently incentivize the status quo and limit ESSER’s potential for innovation.

A Framework for ESSER Planning

How, then, can ESSER funds be spent in a way that makes sense for each district and allows for innovation? First, states and districts should determine local needs and identify a set of potential approaches to meeting those needs. States and districts then need to do their research. Those approaches that are infeasible or that policy does not permit should be ruled out; the requirements of ESSER do constrain these decisions but rule out surprisingly few options. Finally, spending should be prioritized in cost-effective ways.

1. Determine state and local needs and potential approaches to meeting them

ESSER is designed to permit many types of spending, and there’s no single “right” choice that applies everywhere. To move beyond simply identifying needs and towards determining the best way to address them, states and districts should consider multiple strategies to address each plausible issue, rather than starting with one favored candidate. The point here isn’t to seek out one permissible silver bullet, but to generate a robust set of alternatives to consider. It is therefore critical to solicit and consider a diverse range of perspectives about needs.

Many analyses focus on how student outcomes vary across demographic groups. For more actionable results, districts might consider how student outcomes differ with access to school-based resources, like experienced teachers, enriched instructional offerings, or counseling staff.

2. Do the research

With a list at the ready, leaders should start to gather information on each option. Now is the time to answer two big questions. First, what would it take to implement this strategy well? Many strategies are evaluated at a smaller scale than leaders may envision, so they should consider whether they can implement at their desired scale. Space, transportation, staffing, scheduling, and technology are all required and should be included in cost calculations, as well as the resources that are available but would be diverted from other uses, like staff time.

Timing of spending as well as total costs should be considered. This is straightforward for one-time costs, like a single year of summer school or extended learning time. But for changes that would reverberate into future budgeting, what will happen, instructionally and contractually, when the ESSER funds run out—especially for districts with particularly large ESSER allocations? This is a great reason to reflect not just on which new things districts would like to acquire, but also on how existing spending patterns are working out. Are there less effective practices taking up resources that, over time, could be freed up for new uses?

If the strategy seems feasible, leaders can move on to the second big research question: what would happen if the strategy was implemented well? This means considering evidence based on what’s happened elsewhere, with an eye to how convincing and relevant it is. Thinking through how likely the outcomes are due to the strategy requires thinking through a counterfactual scenario.

Many studies compare test scores at the start of the school year with scores at the end and implicitly or explicitly attribute all of that growth over the year to the use of a particular curriculum or intervention, but a better approach would be to compare test score changes over the course of the year in settings using different interventions. This gets closer to approximating a counterfactual outcome: how did test scores change fall to spring with, say, one math curriculum in place versus another? Ideally, research takes care of the “selection problem,” or why different schools choose to use different interventions, by introducing variation that is random, or close to it, where interventions are used.

3. Rule out the non-starters

Some options simply can’t work, either because their implementation requirements are infeasible in a given context, or because federal law (and sometimes state law or policy) preclude them. In most cases for ESSER, though, getting more information on what is permissible is likely to rule options in rather than out.

What makes a strategy permissible in terms of ESSER’s evidence requirements, which apply to the required set-aside spending categories described above for states and districts? These all draw on the Every Student Succeeds Act’s definition of evidence. ESSA has four “tiers” of evidence but, for the purpose of understanding ESSER, all you need to understand is its most flexible option. Carrie Conaway has described this fourth tier as ESSA’s “hidden gem.” In her words, it applies to “programs and practices that are informed by research and seem reasonably likely to succeed.” Being informed by research is different than being the subject of research. A district might choose to adopt a new core reading curriculum that includes elements research has identified as important for helping students learn to read to replace a current curriculum that is lacking them. This is okay under ESSER, even if that particular new curriculum is not in the What Works Clearinghouse.

ESSA’s numbered tiers imply a hierarchy, but the technical aspects of research that define the tiers determine just a fraction of the practical significance of research findings. For example, many districts are especially interested in resources to help students with disabilities and English learners, for whom the past year has been particularly bleak instructionally. Yet the research base at the highest tiers of evidence on what works for these groups is especially weak. This doesn’t mean districts should walk away from their needs and values. Instead, they should understand and embrace the broad view of evidence permitted under the law.

4. Prioritize based on cost-effectiveness

With any luck, at least one good option has survived to this point. Leaders can use the research they’ve assembled to think about how effective each option is likely to be alongside its cost. This step may seem obvious when it comes in this sequence, but all too often, the sources consulted won’t even mention costs.

It’s true that this process will take longer than running the top contender or two through the What Works Clearinghouse or—which is just doing a fraction of the “do your research” step and nothing else. Still, perfect doesn’t have to be the enemy of the good here: even a light, quick version of this framework will help states and districts make better ESSER funding decisions.

Nora Gordon is associate professor of public policy at Georgetown University and the co-author of Common-Sense Evidence: The Education Leader’s Guide to Using Data and Research. Melissa Junge and Sheara Krvaric co-founded the Federal Education Group, where they are attorneys.

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