Are We Prepared to Spend the Latest Stimulus Wisely?

Friday, March 26, 2021
Matt Gandal
President & CEO

The American Rescue Plan — the latest Federal stimulus package passed in response to the coronavirus pandemic — offers tremendous financial resources to both K-12 and higher education for use in combatting the effects of the pandemic on student learning and success. While the tendency may be to use these funds to backfill budget gaps, I believe this is an opportunity to take more aggressive action to close longstanding equity gaps that are, sadly, widening because of the pandemic. 

The sheer size of the distributions is unprecedented. There is also significant flexibility in how the money can be spent, which is very unusual for federal funding. With $110 billion heading to K-12 districts, $12 billion to states, and $40 billion to postsecondary institutions, this represents a huge infusion of resources that will need to be spent in a relatively short period of time, and it dwarfs the amount of money that flowed to education from the federal stimulus funding during the 2009 recovery. 

What we learned during that period was that states, school districts, and colleges who positioned themselves to make innovative use of those funds were able to supercharge their recovery, accomplishing much more than just returning to “normal.” Look, for example, at states like Tennessee, which rose from among the lowest-performing states in the nation to one that is now widely regarded as a model for innovation in both K-12 and higher education. Or communities like Long Beach CA, that doubled down on investments in innovative pathways from high school through community college and the CSU system to increase opportunities for low-income youth and students of color. 

From our vantage point as an organization that focuses on expanding economic opportunity and mobility by increasing educational attainment, we see enormous potential for innovation and impact through the use of these funds. But it will require vision, intentionality and even some creativity, as the legislation identifies critical areas like combatting “learning loss” but doesn’t prescribe how systems and institutions should address it. Here are two immediate, high-impact focus areas for states, districts, and higher education institutions that want to press beyond a return to normal. 

Reverse college enrollment declines by targeting investments to support high school juniors and seniors. 

Postsecondary credentials have become more important, not less; yet enrollment continues to decline, especially for students of color and low-income students. The American Rescue Plan Funds present a critical opportunity to prevent a “Lost COVID cohort” of high school students who fail to transition to higher education. Immediate action is needed to stop this emergency from impacting a generation of students’ economic opportunity for years to come. 

Of the funds states and districts will receive, five percent of total state funding ($6 billion) and 20 percent of district funding ($22 billion) must be used to address learning loss. While attending to the needs of K-8 students will certainly be important, it is critical that states and districts target a portion of these resources to high school students, especially those at risk of dropping out of the postsecondary pipeline. 

The American Rescue Plan calls on communities to focus on “evidence-based practices to meet the comprehensive needs of students.” We know that by focusing on a set of Momentum Metrics, schools and districts can help more students successfully transition to higher education. Districts that have focused on opening up access to high-quality pathways, increasing the availability of dual enrollment and advanced coursework opportunities, ensuring students complete the FAFSA and apply to multiple postsecondary institutions with a greater eye toward “college match,” have seen significant increases in their college-going rates, especially for traditionally underrepresented student groups. For instance, San Antonio has dramatically increased Advanced Placement completion among Hispanic and low-income students by identifying students who have “potential” to succeed in these courses and providing them with wrap-around supports to ensure their success. Atlanta has seen its college-going rates improve by helping seniors apply to colleges that “match” their academic profile and significantly strengthening summer advising supports. These are precisely the type of evidenced-based practices that the new stimulus resources should support to address learning loss in high school. 

States have an additional $1 billion to spend on summer programming. Given that even before the pandemic, annually about one-quarter of all high school graduates who intended to enroll in college never show up in the fall (or “melt”), focusing stimulus resources here makes a lot of sense. States and districts should immediately direct funding to summer bridge and acceleration programming aimed at current juniors and seniors who will need additional academic support and proactive advising to coach them through the process of enrolling and matriculating into higher education. 

There are some notable examples of innovative summer programming supported by CARES Act resources last year that can be replicated to build college momentum for high school students. Texas launched a summer bridge program that provided advising and academic catch up; Rhode Island offered a transition course over the summer that enabled students to place directly into credit-bearing coursework upon enrollment; and a number of higher education institutions made dual enrollment courses free so that students could get a jump on their path to a credential with labor market value. Going forward, every state and community should have a summer bridge, postsecondary advising, and credit acceleration strategy in place, and the American Rescue Plan provides the means to do so. 

Invest in adult learners looking to reskill. 

With millions of people displaced from their jobs due to the pandemic’s economic disruption, higher education institutions need to be prepared to effectively serve adult learners seeking new skills for a career transition. And they should actively recruit them. The American Rescue Plan provides higher education institutions with a clear path to support adult learners where it matters most: through financial aid. At least 50 percent of the funds headed to higher education institutions must be used for financial aid, and recent guidance from the Department of Education confirms that “continuing education, non-degree seeking, or non-credit students” — categories that describe many adult learners — are eligible to receive that aid. 

This creates a huge opportunity for community colleges, four-year regional institutions, and state higher education systems to make outreach to displaced workers a priority, and to position their institutions to better serve adult learners. Tennessee and Indiana have shown that by successfully targeting financial aid to adult learners and ensuring the programs that are offered open doors to well-paying jobs, it is possible to significantly scale adult participation and credential attainment. Institutions can also use the funds they receive under the American Rescue Plan to ensure that adult learners that have experienced changes in income due to job loss or other circumstances are aware of adjustments that can be made to their financial aid packages. Through a process known as “professional judgment,” financial aid professionals at institutions can make allowances to more accurately reflect a student’s current circumstances. By making higher education financially possible and immediately translatable to new jobs, higher education leaders can remove enormous barriers for many adult learners looking to reskill. 

In addition to financial aid and programmatic enhancements, higher education leaders should consider leveraging stimulus funds to offer more comprehensive supports that wrap around adult learners. These can include services related to food, housing, child care, and other basic needs made more challenging (particularly for adult learners) by the pandemic. Institutions can use stimulus funding to not only increase the availability of wraparound services, but to bring them together under one roof to ensure students can find and use them. Oregon State University’s Human Services Resources Center, for example, has consolidated resources related to basic needs and financial assistance, including a food pantry, food assistance program, emergency housing, legal advocacy services, and more, into one central location to make them easier for students to access. 

Leading institutions have shown what’s possible when they adopt targeted strategies to serve adult learners, especially those who have been hit hardest by the pandemic. Many of these strategies are detailed in ESG’s newly-released Rapid Response Toolkit for institutional and state leaders. Now, with significant financial resources available to support these adult learners, many more institutions have the opportunity to make adult-focused programming a priority. 

Our education system has faced unprecedented challenges this past year, and now it has the opportunity for unprecedented advancements. ESG is actively looking to work with states, districts, and higher education institutions that see this as an opportunity for innovation and acceleration, because we understand that a return to normal is not a sufficient outcome of our American rescue.