Initial Guidance from the Department of Education regarding Stimulus Funds


The Department of Education has released initial information regarding implementation of the American Recovery and Reinvestment Act (ARRA), including additional details on how the Department will disburse funds for the State Fiscal Stabilization Fund (SFSF), federal student aid programs, and compete the funding for the Teacher Quality Enhancement grants included in the stimulus bill.

  • The Department is emphasizing the creation and rescue of jobs; improvement of student achievement and school reform; transparency and accountability; and thoughtful investment as guiding principles in the disbursement of stimulus funding.
  • Pell Grants and Work Study funds included in the ARRA will be available on July 1, 2009 for use in the 2009-2010 academic year.
  • Governors will be able to apply for 67 percent of the State Fiscal Stabilization Funds by the end of March and must provide assurances that their states will meet the ARRA requirements. To receive the remainder of the funding, States must show that they are making progress in meeting the ARRA requirements.
  • Grant guidelines for the statewide data systems and the Teacher Quality Enhancement grants will be posted in the next 30-45 days.

Additional details can be found below. In addition, the Department’s guidance can be found here:

More Details:

In the initial guidance regarding the ARRA stimulus, the Department of Education has stated that four principles will guide the disbursement and use of the funds:

  • Spend funds quickly to save and create jobs;
  • Improve student achievement through school improvement and reform;
  • Ensure transparency, reporting and accountability; and
  • Invest one-time ARRA funds thoughtfully to minimize the “funding cliff,” which may develop when the funding ends in two years.

In regards to specific programs within the stimulus, Pell Grant and Work Study funds will be available, pending disbursement for school year 2009-2010 beginning July 1st.

The State Fiscal Stabilization Fund (SFSF) will be available in two stages. For the first stage, the Department will release 67 percent of the SFSF funds to the individual states, following assurances from that the state will commit to meet the ARRA requirements (making progress on key education reforms listed below, sharing required baseline data, and meeting record-keeping and transparency requirements). Governors will be able to apply for these funds by the end of March and the funds will be released within two weeks after approvable applications are received.

The remaining 33 percent of the funds will be released during the period July 1 to September 30, 2009, conditioned on states providing evidence and plans for progress of the ARRA requirements. Those requirements, authorized under the Elementary and Secondary Education Act (ESEA) and the America COMPETES Act of 2007, include:

  • Raising standards through college- and career-ready standards and high-quality assessments that are valid and reliable for all students, including English language learners and students with disabilities;
  • Increasing transparency by establishing better data systems tracking student progress over time;
  • Improving teacher effectiveness and ensuring an equitable supply and distribution of qualified teachers; and
  • Supporting effective intervention strategies for lowest-performing schools

Contact: Wendy Naus