Taxpayer's Guide to the Stimulus: 12. Education

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Summary: Over $102 billion of the stimulus is given to the Department of Education to help states fund education programs and activities.

>> Spending

$53.6 billion for State Education Budgets. The stimulus sets up a special pool of money, the “State Fiscal Stabilization Fund,” to help the states that are running budget deficits. Most of the money, $40.6 billion, will be given to local school districts, through the states. The stabilization fund takes up all of Title XIV, and also gives $8 billion of the money to high-priority education projects, and $5 billion for the Secretary of Education to give away in grants to successful programs.

$15.9 billion for College Tuition Grants. This money will be used to give students who are awarded a Pell grant up to an extra $500 for their college education expenses.

$13 billion for Struggling Students in Poor Areas. The Education Department has a program called “Title I” that provides grants for academic support to students in poverty stricken areas. This money would increase the funding for the program.

$12.88 billion for Disabled Students. The majority of this money, $12.2 billion, will provide states with funds to give as grants to special education programs and children with disabilities. Title VII will give the remaining $680 million to the Education Department for providing disability rehabilitation services and for creating new rehabilitation programs.

$3 billion for Childcare and Community Development Grants. This money will fund state grant programs that provide childcare services and development programs which seek to reduce poverty through community-based educational activities.

$2.1 billion for Head Start and Early Head Start. Head Start is a program that seeks to prepare pre-school children for kindergarten, and Early Head Start is targeted at providing assistance to infants and toddlers.

$820 million for School Improvement Programs. The stimulus provides $650 million for a technology education program, $100 million to fund the Impact Aid program that funds financially distressed schools, and $70 million to provide education to homeless children.

$450 million for Technology Development Programs. The stimulus gives $250 million to programs that provide technology education assistance in communities across the country. The Institution of Education Sciences will get $200 million for school to figure out more effective ways to pay teachers.

$300 million for University Programs. The bill adds $200 million to the College Work-Study program fund that supports low-income students and commits $100 million to recruiting new professors for higher education.

>> Commentary

Unfortunately, instead of creating thousands of jobs in the education sector as promised, the largest chunk of the education stimulus will simply pay for ongoing operating expenses in public schools. Roughly $40 billion will be used to backfill state budgets that have been mismanaged for years, going towards averting layoffs and program cutbacks, but will be distributed by standard population and demographic measures, not based on real “need” or budget shortfalls.

States are getting a huge federal bailout for questionable education spending without having to make any substantial education reform concessions. This huge influx of money will also most likely lead to increased wasteful government spending on new education programs that will perpetuate the ongoing budget crisis and encourage spending without taking into account state revenue.

One provision requires that states must spend a minimum amount on education (based on what they spent in 2006) in order to get money, which means that states may continue programs that are failing or unneeded because they will bring in more Federal dollars.

Like other agencies, the large amount of money the Education Department receives will create a new baseline for funding that they will expect in future years. The stimulus money doubles the budgets of Title I poverty assistance programs and special education programs. This will be an almost $26 billion permanent increase in the federal education budget. Yet, both Title I and special education programs have spent hundreds of billions of dollars in federal funds over the last few years with almost zero gains in student achievement or closing the achievement gap for disadvantaged and special education students. The education stimulus provided an opportunity for these programs to double their budget with zero programmatic reforms or scrutiny.

The billions for Pell grants in the stimulus seem like a good idea for helping the economy by increasing financial access to tuition money, but instead the $500 increase will ultimately just inflate the cost of a college education. In the future this means higher tuition bills as colleges adjust, which will probably lead to an increase in federal financial assistance as the cycle continues.

Taxpayer’s Guide to the Stimulus: 12. Education

Location in Stimulus Bill:
Division A, Title XIV and Title VII