Focus On Student Outcomes, Not How Federal Funds Are Spent

In 2020 and 2021, Congress opened the metaphorical barn door, doling out $190 billion to school districts. In hearings last year, U.S. Department of Education leaders assured congressional leaders they’ll eventually know how the money was spent.

But the answers may be unsatisfying. My Edunomics Lab colleagues, along with David DeSchryver at Whiteboard Advisors, have been digging into the emerging data. Given limitations to how states and districts track their spending, we can answer high-level questions about how much of the federal money has been spent, but we may never be able to say precisely what the money bought or what services students received. 

To be clear, Congress deserves the blunt of the blame for this situation. Through three rounds of federal relief bills, it placed virtually no restrictions on how districts could use the money. 

Congress also failed to set any goals for what the money was for. Was it to help schools reopen for in-person instruction? If so, money was never the main issue. Schools were open last year in some places—such as Georgia, Texas, and Florida—long before the funds arrived. And nearly all schools opened this year, despite recent data showing that hardly any of the federal dollars have been allocated.

Maybe the money was to help students recover from lost learning time? Congress did specify that districts spend a portion of their funds to “address learning loss,” but that was only 20% of the money, and the legislative language is so vague that almost anything could qualify. 

So what are we left with? As noted above, the federal government has reasonably current information on how fast districts are spending their money. But the feds are unlikely to collect coherent data on how the money is being used. The biggest spending categories so far are catch-all buckets like “other” or “systemic procedures.”

Obviously, congressional leaders and education advocates—not to mention parents—would like more information than this. Ideally, we’d be able to answer detailed questions about how the federal dollars are affecting students. For example, how many more children are receiving individualized tutoring this year? Even better: How many of them are students with disabilities, or English learners? 

Unfortunately, districts don’t link their spending to particular students. Instead, they set their budgets in terms of staffing levels and programs. It was only in the last few years that they even began tracking expenditures for individual schools.  

Efforts to track the federal dollars will also suffer from a lack of agreement on how to categorize the spending. Should schools track their spending based on the object purchased, such as salaries and benefits for teachers, supplies, or technology? Or should they focus on the function of the spending, such as instruction, administration, or transportation? Without clear direction or agreement on how to categorize different types of spending, it will be futile to try adding them up. 

Oh, and there’s this: money is fungible. It would be impossible to pin down precisely what a district bought with the federal relief money versus how it spent all of its other revenues. 

For these reasons, it’s a mistake for the feds to spend too much effort setting up a special data collection to track the one-time federal funds. There’s no point collecting data no one will ever use or understand.

Thankfully, there are better ways forward. Instead of a new data collection effort, the Department of Education could seize on what already exists. A long-running survey from the National Center for Education Statistics collects spending information across broad categories for every public school in the country. It will eventually answer some high-level questions about the recent federal investments, such as how much was spent on instruction versus construction. 

Thanks to another federal law, we’ll also know if districts are spending their money in schools with the most vulnerable students. The Secretary of Education could remind district leaders that the 2015 Every Student Succeeds Act requires every state to annually report school-by-school expenditures. In addition to a moral responsibility to target resources to the students who need them the most, district leaders should remember that the results of their decisions will come to light sooner rather than later. 

Finally, the federal government could play a more helpful role in shifting the conversation from inputs and budgets to students and outcomes. Are 3^rd graders on track in reading? Are high schoolers accumulating enough credits to graduate? More fundamentally, are students even showing up to school? 

By pushing the relief funds out quickly and attaching few strings to how it can be spent, Congress will have to trust districts to spend the money wisely. In the meantime, they could clarify what the money was for by focusing on the outcomes that matter most.