Looming Education Funding Crisis Will Impact U.S. Students, Economy

The old Warner Brothers cartoons often depicted Wile E. Coyote chasing so hard after his prey (usually the Roadrunner) that he wouldn’t realize he’d run off a precipice until it was too late. Unlike the animated characters, the American public education system is very much aware it is headed toward a financial cliff at a time when students are still suffering from a post-COVID-pandemic academic slide. And this potential challenge may be most keenly felt in the southern United States.

A report released last year from the Southern Education Foundation, Economic Vitality and Education in the South,(EVES) showed that students from Black, Brown and low-income families are much more likely than their peers to struggle academically due to underfunded and under-resourced schools. The pandemic only exacerbated those challenges. Additionally, students’ limited access to nutritional food, up-to-date technology, reliable internet service, and professional support academically and emotionally are non-school factors that impact students’ academic achievement.

While the looming discontinuation of federal funds for addressing pandemic learning disruptions would bode poorly for the Coyote, it presents a historic opportunity for Southern states to lean into these challenges and show the rest of the nation how to improve education at this critical juncture.

Through the federal CARES Act of 2020, Congress made an unprecedented move by providing a total of $190 billion in federal pandemic aid for schools, called Elementary and Secondary School Emergency Relief (ESSER). School districts are tasked with how to direct the final portion of that funding by September 2024, leaving many with tough decisions on how to do without this federal support in the coming years.

“There was absolutely a lot of good that came out of these investments,” said Joseph Trawick-Smith, a partner at Education Resource Strategies (ERS). Trawick-Smith points out that many districts used ESSER funds to invest in tutoring, curricular materials and assessments, coaching resources, and other tools that directly support students and align with research on learning acceleration.

This unprecedented infusion of funds left many education leaders seeking guidance on school staffing, spending, and scheduling. ERS is one of several organizations that created resources to help them navigate this new territory. Its ESSER Guidance for School Staffing, Spending, and Scheduling includes proven practices that ERS used to help districts get up and running with ESSER dollars, with real-life examples peppered throughout.

Research-based tutoring is one that stands out.

In the ERS tutoring guidebook, Keri Randolph, the chief strategy officer for Metro Nashville Public Schools, explains how her students benefitted from tutoring for 30 minutes, three times a week, and for 10 weeks with the same instructor. “Research is really important. We don’t have that many interventions or strategies in education that are as definitive on impact as high-dosage tutoring,” she said.

In most school districts, these types of initiatives were possible because of a dramatic one-time increase in revenue. Nationally, that temporary funding for post-pandemic assistance is more than four times what the federal government usually spends on schools in a year. The Edunomics Lab at Georgetown University projects that once that allocation is no more, schools nationwide will cut annual spending by $60 billion. That adds up to an average reduction of about $1,200 per student.

To maintain post-ESSER spending levels, state budgets will need to be cut by nearly one-fifth without additional revenue or substantial use of reserves, according to school funding formulas cited in the EVES report and other sources. Education Week found that 15 states, all but two of them in the South, have the nation’s highest ratios of pandemic relief funds compared to overall spending and the largest shares of students in poverty and high-poverty school districts.

With the ESSER spending window closing soon, many leaders are contemplating how to make the most of what’s left before the deadline. And if they’re not careful, they could end up worrying too much about how to spend the funds quickly rather than continuing to deliberately invest in the evidence-based practices that students need most and that promote long-term sustainability.

Trawick-Smith said the most urgent focus right now for school districts should be maximizing the use of the remaining allocations by investing in strategies with the greatest likelihood of driving student outcomes.

A second — and equally essential — aspect of the financial cliff is drafting a plan for sustainability.

“A lot of districts are trying to figure out how to unwind their ESSER investments in ‘24-’25 with the least amount of disruption to students, families and staff,” Trawick-Smith said. “While it’s true that lots of districts will need to reduce spending, we’re encouraging them to apply a critical lens to all the dollars they spend, not just what was funded through ESSER.”

Trawick-Smith notes that legacy spending in districts often has no clear link to student outcomes. Districts should be using this as a moment to reevaluate old ways of doing things and reallocate resources towards the strategies known to get results.

It is not just about cutting budgets, Trawick-Smith added, but about fundamentally rethinking the way school is designed. For example, Mesa Public Schools in Arizona has shifted away from the one-teacher-per-classroom model to a more dynamic teaming model with differentiated roles and responsibilities for teachers. Teams of educators work together with cohorts of students, allowing teachers to provide targeted interventions and small-group instruction at the time when it is needed most.

“Admittedly, you can’t flip a switch and completely change the way a school is designed. It’s hard. It takes time and intentional planning. But without putting that work in, many districts will find themselves back in the same place two or three years down the road,” Trawick-Smith said.

At the same time, recent data shows students are not rebounding fast enough from their COVID-era academic setbacks.

Data released in July from the testing provider NWEA indicates that students are not recovering from the academic effects of the pandemic at rates that will allow them to catch up in math and reading. The NWEA report analyzed test scores from 6.7 million U.S. public school students in grades 3-8 and found that students are still making progress at a slower rate than their peers were making pre-COVID. Educational researchers agree that the way to address these essential skills-and-knowledge gaps is to move students forward at a faster pace.

The achievement gap affects students by increasing dropout rates that subsequently cost the nation nearly $700 billion to $1 trillion annually.

Clearly, if significant numbers of students are allowed to fall further behind, the nation will pay the price through decreased economic competitiveness and fewer young people prepared to meet the human capital needs of the nation.