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American Rescue Plan Act of 2021 for education: overview

American Rescue Plan Act of 2021 for education


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March 2020 saw a watershed moment for the American education system. Suddenly, it was no longer safe for students to be in classrooms; they and their teachers could catch or spread a potentially deadly disease. Distance learning became de rigueur.

To aid Americans struggling during the crisis, the American government first passed the CARES Act and another sweeping relief package recently known as “The American Rescue Plan Act of 2021.” It has a substantial impact on the American education system. In this post, we break down its effect on the K-12 system, higher education, and education-related programs such as Head Start. We’ll also look at the differences between this act and the previously enacted CARES Act.

American Rescue Plan Act funding data for education by state
American Rescue Plan Act funding data for education by state

How does the American Rescue Plan compare with the CARES Act?

The CARES (Coronavirus Aid, Relief, and Economic Security) Act was passed into law on March 27, 2020. It was enacted at the beginning of the public health crisis and was designed to aid Americans directly impacted by the outbreak.

Almost exactly a year later, the government passed the American Rescue Plan. Commentators noted that the American Rescue Plan builds off of the CARES Act; it was the government’s response to calls for increased federal funding in the wake of severe economic damage wrought by the crisis.

However, there’s one significant difference between the CARES Act and the American Rescue Plan: the CARES Act limited expenditures directly related or incurred as a result of the pandemic, while the American Rescue Plan empowers local governments to use funding for a broader array of needs.

The CARES Act established the Education Stabilization Fund (ESF) to help educational institutions respond to the public health crisis. Three other funds comprise the ESF:

  • The Governor’s Emergency Education Relief Fund, which provides governors funding for K-12 schools, higher education institutions, and other educational entities within their states
  • Elementary and Secondary School Relief, which provides funding for school districts and is distributed by state education agencies
  • The Higher Education Emergency Relief Fund (HEERF), which provides funding to higher education institutions to cover costs incurred through the crisis as well as emergency financial aid grants for students

The impact of the American Rescue Plan on K-12 education

Under the American Rescue Plan, the government will provide $122.7 billion for the existing Elementary and Secondary School Emergency Relief Fund. These funds will be available through the end of September 2023.

States will receive these funds based on the same proportions outlined in the Elementary and Secondary Education Act Title IA. State education agencies must distribute at least 90% of the funds to local education agencies based on their proportional share of Title IA funds.

American Rescue Plan Act of 2021 for education

One important provision is that local education agencies must reserve at least 20% of their funds to address learning loss. They must use evidence-based interventions, such as:

  • Learning or summer enrichment programs
  • Extended day
  • Comprehensive afterschool programs
  • Extended school year programs

The remaining funds can be used in a variety of ways, as long as they’re furthering educational goals. One approved use for remaining funds is the purchase of technology for distance learning (such as a unified communications platform), which we’ll discuss in greater detail later in this post.

The impact of the American Rescue Plan on higher education

The American Rescue Plan provides $40 billion to higher education institutions through HEERF. Out of those funds, $36 billion will go to public and private non-profit institutions, $3 billion will go to historically black colleges and universities, tribal educational institutions, and institutions that serve minorities, and $400 million will go to for-profit institutions to provide financial aid for students. And $200 million will go to institutions with the greatest unmet need stemming from the crisis, or those not served by HEERF. As with the K-12 funding, funds will be available through the end of September 2023.

Under the law, institutions must spend at least 50% of their allocated funds on emergency financial aid grants, which go directly to students. Remaining funds can be used for such things as replacing lost revenue and reimbursement for emergency expenses.

The impact of the American Rescue Plan on education-related programs

As part of the American Rescue Plan, the government allocated $39 billion in childcare relief, including $15 billion in emergency funding for the Child Care and Development Block Grant and $24 billion for a childcare stabilization fund.

The $39 billion also includes $1 billion for Head Start programs. Head Start programming promotes school readiness for infants, toddlers, and pre-school-aged children from low-income families.

What aspects of the CARES Act still apply after the American Rescue Plan’s passage?

As mentioned earlier, the American Rescue Plan goes further than the CARES Act. However, certain provisions of the CARES Act are still in place.

For a start, the ESF still exists, as does HEERF by extension. These crucial funds ensure that schools for students of all ages receive the support they need to continue learning safely.

Another important holdover from the CARES Act is that funds can be used to invest in technology for distance learning. That means that schools and higher education institutions could use the funds they receive to purchase a distance learning platform.

When purchasing a distance learning platform, decision-makers should consider the capabilities of a unified communications platform. A unified communications platform enables users to:

  • Hold video conferences for live, synchronous learning
  • Use telephony to connect to instructors and classmates
  • Send chats to instructors and peers to stay connected and ask questions about the material

Moreover, a unified communications platform can integrate with other types of software, such as learning management systems. Such integrations enhance the platform’s functionality so schools can get even more out of their investments.

RingCentral: making education accessible through its unified communications platform

RingCentral’s unified communications platform offers the features and capabilities schools and higher education institutions need. They include video conferencing, chat, telephony, and integration with learning management systems. With RingCentral, students, staff, and instructors can stay connected on any device. To learn more, get a demo.

Originally published May 17, 2021

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