Schools on track to meet COVID relief deadlines as spending surges, experts say

A woman points to a white board in the front of a classroom with students seated on both the floor and at desks.

Earlier this year, when $122 billion in pandemic aid remained largely untapped, analysts warned that public schools could forfeit some of the windfall unless spending sped up.

But by this fall, spending had kicked into overdrive. In September, schools were using just over $5 billion in pandemic aid per month — more than $1 billion above the monthly amount this spring, according to a recent analysis by Edunomics Lab at Georgetown University.

School officials say they expected spending to accelerate this school year as planned projects got underway. Now, in sharp contrast to earlier warnings, observers say most schools are on track to meet the deadlines and avoid losing any of the coveted federal funds.

“They had to increase their pace — and they did,” said Marguerite Roza, the lab’s director, who earlier this year said schools needed to spend more per month to exhaust their funds by the September 2024 deadline. Her forecast now: “I don’t think there will be any money left over.”

Roza said her concern with schools’ slower spending before was not the risk of missed deadlines, but the danger of students not getting academic and social support quickly enough. The delayed surge in spending could also precipitate a sharp drop off in services and staffing when the money runs out, she added.

The latest projections offer some validation to school district officials who say they have been steadily spending the federal aid even in the face of staff and supply shortages and critics who accused districts of dallying.

The school system in Wayne Township, Indiana, spent all of the first COVID relief package it received by the deadline in September, said Barry Gardner, who oversees the district’s finances. It has also drawn down nearly 80% of the second package, which expires next September.

The money has helped pay for ventilation upgrades, expanded summer school, tutoring, and mental health services, along with nearly 100 new staff positions — though about one-fifth remain unfilled due to hiring challenges, Gardner said. 

Meanwhile, the district has been making plans for the final round of federal aid. It has already spent more than a third of the $37 million, and officials are confident they will use the remainder by the September 2024 deadline.

“This is the message that we’ve been saying all along,” Gardner said. “That we’ve been spending these dollars in a strategic fashion based upon the approved timelines.”

Since 2020, Congress has passed three pandemic aid packages for schools that amount to a staggering $190 billion. The vast majority of the money went to school districts, which could use it for a wide range of purposes — from purchasing masks and desk shields to renovating buildings and hiring teachers, tutors, and counselors.

The final funding infusion was the largest and most controversial. At $122 billion, it was bigger than any single investment the federal government had previously made in public schools. Unlike the first two packages, which had bipartisan support, the Democratic majority in Congress passed the final stimulus bill in March 2021 over the objections of Republicans, who called it unaffordable and unnecessary.

By early 2022, reports began to emerge that schools had so far spent just a fraction of the money in the final stimulus package, known as the American Rescue Plan. Schools acknowledged the slower-than-expected spending, citing hiring challenges and supply backlogs. But to critics, the sluggish pace suggested waste and inefficiency.

“While states and school districts sit on billions, students are struggling,” said South Carolina Sen. Tim Scott in an August op-ed. He introduced a bill, backed by other Republicans, that would convert some of the unspent money into scholarships families could spend on tutoring or private school tuition.

Certain facts are not in dispute. Schools spent little of the $122 billion last academic year — only about 15%, according to Edunomics Lab’s estimate — though they continued spending down the earlier aid packages.

Schools also encountered real difficulties hiring personnel and purchasing supplies, which slowed down spending. Those challenges have continued into this year, with 45% of public schools reporting at least one unfilled teaching position and more than 80% reporting supply chain challenges, according to a nationally representative survey conducted in October.

But interpretations of those facts have varied wildly. While critics said it’s taken too long to get money out the door, others consider the criticism unfair.

“I’ve been calling this panic-mongering basically since day one,” said Jess Gartner, who runs Allovue, a school-finance technology firm.

She and others who work with school districts say criticism of their COVID spending misses the mark for several reasons.

First, the data is incomplete. Federal aid trackers do not capture districts’ real-time expenditures due to reporting lags. And expenses that are spread out over time, such as salaries, might not appear until later spending reports.

Second, districts have been drawing down the first two pools of pandemic aid before starting on the third, which schools have until fall 2024 to allocate.

“Any rational human being is going to spend the dollars that expire first,” Gartner said.

Also, as a condition of the stimulus money, Congress required states and school districts to consult community members and submit spending plans. The plans were not all approved until late 2021 — well into the 2021-22 school year and just as districts were starting to budget for the following fiscal year. Then schools still had to secure vendors, get additional approval for construction projects, and follow elaborate procurement rules.

“You don’t snap a finger and do that in a week,” said Dennis Roche, co-founder of Burbio, a data service that tracks school spending. “It takes time.”

Now, the final aid money is budgeted and long-planned programs are up and running. 

For instance, one urban district launched a large-scale tutoring program this fall after nearly a year of planning and finding dozens of vendors, said Jonathan Travers, managing partner of the consulting firm Education Resource Strategies. 

“Anecdotally, I have a sense that in a number of districts new initiatives that were in procurement, that were in the planning stage for a long time,” he said, “this fall got off the ground.”

While spending has sped up, it remains more of a marathon than a sprint for many school systems. That includes the one in Paterson, New Jersey, which received nearly $175 million in pandemic aid.

Supply chain issues have forced the district to plan far in advance, with some items that were ordered in May only arriving this month, said Richard Matthews, the business administrator. Other major expenditures that have been in the works, such as new HVAC units and a $14 million custodial contract, should commence next year.

Despite the complexities, Paterson has spent all of its round one funds and nearly 80% of its round two allotment, which helped fund summer and after-school programs, mental health services, and hiring bonuses. The district has also drawn down about 30% of its final aid package — nearly two years ahead of the deadline, Matthews said.

“We’re in pretty good shape,” he said.

Meanwhile, New Jersey lawmakers have questioned the pace of schools’ spending. But officials like Matthews say their top concern is putting the money to good use before it’s gone.

“Our challenge is to make sure not just that we spend it,” he said, “but we spend it wisely.”

Patrick Wall is a senior reporter covering national education issues. Contact him at pwall@chalkbeat.org.

Update: This article has been updated to include Marguerite Roza’s assessment of the potential consequences of schools’ pace of pandemic aid spending.

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