CARES Act Creates the Education Stabilization Fund

April 03, 2020 CARES Act Creates the Education Stabilization Fund

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KEEPING YOU INFORMED…

Last Friday, March 27, 2020, President Trump signed into law the Coronavirus Act, Relief and Economic Security Act (the “CARES Act”), a $2.2 trillion emergency spending bill that provides much needed stimulus to various sectors of the U.S. economy reeling from the economic distress caused by the COVID-19 pandemic. In addition to the stimulus provisions widely reported in the media, the CARES Act also includes supplemental emergency appropriations to assist in the governmental response to the COVID-19 pandemic. Among those emergency appropriations is $30,750,000,000 designated for a newly formed “Education Stabilization Fund” (the “Fund”) to be administered by the U.S. Department of Education (“DOE”), which is intended to provide much needed support to elementary and secondary schools, as well as institutions of higher education, which have been significantly impacted by the COVID-19 pandemic. The Fund will be allocated between three separate subprograms: 9.8% is to go to the Governor’s Emergency Education Relief Fund (the “Governor’s Fund”); 43.9% to the Elementary and Secondary School Emergency Relief Fund (the “K-12 Fund”); and 46.3% for the Higher Education Emergency Relief Fund. The following is a brief summary of the provisions of the CARES Act that apply to the Governor’s Fund and the K-12 Fund.

Any local educational agencies (“LEAs”) that intend to apply for subgrants under the Governor’s Fund or K-12 Fund should be aware of § 18006 of the CARES Act, which states that an LEA “that receives funds under [the Fund] shall to the greatest extent practicable, continue to pay its employees and contractors during the period of any disruptions or closures related to coronavirus” (emphasis added). The meaning of “to the greatest extent practicable” is not clear. If the New York State Education Department (“SED”) articulates criteria in its subgrant application process, we will provide an update to this memorandum.

In addition, in order to access the Governor’s Fund or K-12 Fund, States will be required to make assurances in their applications that they will maintain funding for elementary and secondary education in fiscal years 2020 and 2021 at least at the average level over the prior three fiscal years. However, the DOE may waive this requirement for “the purpose of relieving fiscal burdens on States that have experienced a precipitous decline in financial resources.”

Governor’s Fund

The Governor’s Fund provides approximately $3 billion to be divided proportionally among States based on a formula set forth in the law. Governors will be permitted to use the funds for three specific purposes, two of which are available to provide aid to LEAs: 1) emergency support through grants to LEAs that the State “deems have been most significantly impacted by coronavirus to support the ability of such [LEAs] to continue to provide educational services to their students and to support the on-going functionality of the [LEA]”; and 2) support to any other institution of higher education, LEA, or education-related entity that the Governor deems essential for a) carrying out emergency educational services to students pursuant to federal law, b) providing care and early childhood education, social and emotional support, and c) protecting education-related jobs.

K-12 Fund

The $13.5 billion K-12 Fund is to be divided among the States in the same proportion that each State received funding pursuant to Title I, Part A of the Elementary and Secondary Education Act of 1965 (“ESEA”) in the most recent fiscal year. The funds will be made available to the State if its application is approved by the DOE. The law requires each State to allocate not less than 90 percent of the funds as subgrants to LEAs in proportion to the amount of funds the LEAs received pursuant to Title I, Part A of the ESEA in the most recent fiscal year. The disbursement of the remaining 10 percent would appear to be at the discretion of the State.

An LEA that is awarded a K-12 Fund grant may use the funds for any of twelve approved uses:

        1. Any activity authorized by the ESEA, including the Individuals with Disabilities Education Act (“IDEA”), the Adult Education and Family Literacy Act, the Carl D. Perkins Career and Technical Education Act of 2006, or subtitle B of Title VII of the McKinney-Vento Homeless Assistance Act;
        2. Coordination of preparedness and response efforts of LEAs with State and local public health departments, and other relevant agencies, to improve coordinated responses among the entities concerning the coronavirus;
        3. Providing principals and other school leaders with the resources necessary to address the needs of their individual schools;
        4. Activities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth, including how outreach and service delivery will meet the needs of each population;
        5. Developing and implementing procedures and systems to improve the preparedness and response efforts of LEAs;
        6. Training and professional development for staff of the LEA on sanitation and minimizing the spread of infectious disease;
        7. Purchasing supplies to sanitize and clean the LEA’s facilities;
        8. Planning for and coordinating during long term closures, including how to provide meals to eligible students, how to provide technology for online learning to all students, how to provide guidance for carrying out requirements pursuant to the IDEA and how to ensure other educational services can continue to be provided consistent with all federal, State and local requirements;
        9. Purchasing educational technology (including hardware, software and connectivity) for students who are served by the LEA that aids in regular and substantive educational interaction between students and their classroom instructors;
        10. Providing mental health services and supports;
        11. Planning and implementing activities related to summer learning and supplemental after-school programs, including providing classroom instruction or online learning during the summer months; and
        12. Other activities that are necessary to maintain the operation of and continuity of services in LEAs and continuing to employ the LEA’s existing staff.

 
SED has not yet issued guidance regarding the subgrant application and disbursement process. We will update you when this information becomes available.

Please contact Gene Barnosky, Lindsay Crocker, Joshua Sprague or one of our other attorneys by calling (631) 694-2300 if you have any questions regarding the implementation of the Education Stabilization Fund.

THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.

© Lamb & Barnosky, LLP 2020