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Conflicting Missions and Unclear Results: Lessons from the Education Stimulus Funds

By Sara Mead, Anand Vaishnav, William Porter, and Andrew J. Rotherham
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On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act (ARRA), commonly known as the “stimulus.” Enacted in the midst of a deep recession brought on by global financial collapse, ARRA provided more than $800 billion in federal spending and tax cuts intended to stimulate the economy while laying the roots of future long-term growth. A substantial portion of that funding, more than $100 billion, was dedicated to education. This unprecedented one-time spending boost is larger than the entire annual budget of the U.S. Department of Education.

Also unprecedented were the ambitious education reform goals that accompanied ARRA’s education spending. ARRA’s architects sought not just to save teacher jobs and patch holes in state and local budgets but also to advance education reform in four key areas: implementing college- and career-ready standards and high-quality assessments, creating pre-K-20 longitudinal data systems, increasing teacher effectiveness, and turning around chronically low-performing schools. The resulting legislation introduced a new federal approach to education reform — one that emphasizes the four reform priorities mentioned above and that uses incentives, rather than mandates, to drive state and local reforms. But in doing so, the legislation incorporated the competing goals of short-term stimulus and long-term reform. This tension has shaped how ARRA played out in practice.

Less than two years have gone by since ARRA was passed (and one year remains for districts to spend down ARRA funds), so it is still too early to fully assess ARRA’s economic and reform impacts. But key themes and lessons are beginning to emerge, with implications for future state and federal stimulus and education reform efforts.

Recognizing that the unprecedented flow of ARRA funding into education created both potential pitfalls and opportunities, the William & Flora Hewlett Foundation supported the efforts of 10 national and state-based organizations to disseminate information and analysis on ARRA and help states and local school districts make good use of ARRA funds. Half of the grantees — the Center on Education Policy, the Council of the Great City Schools (CGCS), Editorial Projects in Education, the New American Foundation, and the University of Washington’s Center on Reinventing Public Education — have focused on helping to document exactly how ARRA funds have been distributed to and used by states and districts. The other grantees — the American Institutes for Research (AIR), the Aspen Institute, the California County Superintendents Educational Services Association (CCSESA), Education Resource Strategies (ERS), and the Policy Innovators in Education Network — have focused on providing direct assistance to states and districts in making choices about the use of ARRA funds. (See Sidebar 1 of the full report for a list of grantees.)

These organizations have acquired a deep and unique understanding of the impacts of ARRA on the ground, both in school systems that received extra help and counsel to use ARRA funds wisely and in those that did not. This paper draws on and synthesizes this understanding to independently identify key themes and lessons emerging from state and district experiences with ARRA. Through an analysis of Hewlett grantees’ publications and work as well as interviews with both Hewlett grantees and district leaders, the authors of this paper have identified these emerging lessons and their broader implications for education policy and practice. Although the work of the Hewlett grantees plays a key role in informing this analysis, the conclusions presented here are those of the authors alone and do not necessarily represent the views of the Hewlett Foundation or its grantees.

Several key themes emerge from states’ and districts’ experiences implementing ARRA:

  • Districts used ARRA funds primarily to maintain spending levels in the face of state and local budget cuts. But some districts also used ARRA funds concurrently to move forward with reforms, particularly in the area of human resources.
  • Mixed messages from senior officials at the Department of Education, multiple competing priorities, and delays in receiving official guidance from the Department of Education and states created confusion at the district level about the purpose of ARRA funds and how they should be used to preserve jobs and advance reform.
  • In many districts, inertia and existing processes, rather than reform priorities, drove allocation and distribution of ARRA resources.
  • In districts that did use ARRA for a more strategic end, local leadership, greater capacity, and idiosyncratic local factors, rather than federal policy decisions, were the causes.
  • Budget pressures on states and districts are proving to be even greater and longer-lasting than initially expected and are a long-term and systemic problem rather than a temporary one.

These emerging themes have implications for education policy and practice, not only in the event of additional stimulus funding but for any policy efforts to use federal dollars to drive reform in elementary and secondary schools:

  • Federal policymakers should not expect federal funds that are not attached to clear reform requirements to generate reform. Policymakers can combine stimulus and reform but must acknowledge the trade-offs, structure the funding accordingly, and communicate their priorities and goals clearly to recipients of funds.
  • Federal policies that prevent districts from using stimulus funds for practices known to be ineffective may be more effective than policies that encourage spending those funds on new reform activities.
  • Federal policies and spending should be crafted with the goal of helping districts make hard choices to address unsustainable cost structures rather than simply postpone the tough decisions.
  • Where possible, federal education policies should help districts become fundamentally more strategic and effective and should not focus narrowly on specific reforms.
  • Policymakers at all levels — federal, state, and local — must support strategies that build data, analytic, and research capacity to help districts use resources more strategically, especially in the current fiscal climate. Lack of district capacity is an enormous obstacle to implementing change.
  • Advocacy organizations can play a valuable role in providing political cover for districts and states that make tough choices.

Click here to download the full report as a PDF.