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Reports & Research

December 2, 2010


Bellwether Education Partners report...

Impact of Stimulus Funds Still Uncertain:
Study Finds that Billions in Federal Aid Are Not Driving Education Reforms as Intended or Expected

Nearly two years after the American Recovery and Reinvestment Act (ARRA) provided more than $100 billion in stimulus funding for public education in the United States, the net impact on school improvement is still undetermined.  According to a new study from Bellwether Education Partners, the to-date results of ARRA significantly lag behind the ambitious education intentions of the law.

“The ARRA has played an important role in closing district budget gaps created by state and local revenue losses, sustaining education spending, and saving jobs,” according to the report – titled “Conflicting Missions and Unclear Results: Lessons from the Education Stimulus Funds”.  “But that success in closing state and local budget gaps is only temporary; districts will face even greater pain once funds go away.  And ARRA’s largest funding streams – the State Fiscal Stabilization Fund, Title I, and IDEA – have had only limited reform impact.”

In the report, Bellwether’s Sara Mead and Andrew Rotherham and Education First Consulting’s Anand Vashnav and William Porter identify the key themes pursued by states and localities through education stimulus funding and the larger implications those actions are having on school reform across the nation. The full report is available at

“ARRA funds were intended to counter the reactionary economic impact of state and local budget cuts while accelerating state and local education reform efforts,” the report stated.  “Indeed, these funds were sufficient to make up for K-12 funding shortfalls in the majority of states.  But in many cases, the funds simply helped districts tread water, as several states reduced education budgets by roughly the same amounts they received in ARRA allocations.”

Bellwether’s researchers found several key themes emerging from states’ and districts’ experiences implementing ARRA, including:

  1. 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.
  2. Mixed messages from senior officials at the U.S. Department of Education, multiple competing priorities, and delays in receiving official guidance from the federal 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.
  3. In many districts, inertia and existing processes, rather than reform priorities, drove allocation and distribution of ARRA resources.
  4. 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.
  5. 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.

“The federal approach to education reform has tended to focus on specific reform ideas – such as standards, accountability, or identification and equitable distribution of effective teachers – while ignoring the underlying district structural and budget context in which reforms must be implemented,” the study stated.

The emerging themes identified in the Bellwether study have implications for education policy and practice, particularly as greater attention is paid to how federal dollars are used to drive school reform at the elementary and secondary levels.  These include:

  1. Federal policymakers should not expect federal funds to generate reform unless they are attached to clear reform requirements.  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.
  2. Competitive funding programs, such as Race to the Top, appear to be more effective in driving change than formula-driven programs, through which most ARRA education funds were distributed.
  3. 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.
  4. 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.
  5. Where possible, federal education policies should help districts become fundamentally more strategic and effective and should not focus narrowly on specific reforms.
  6. 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.
  7. Advocacy organizations can play a valuable role in providing political cover for districts and states that make tough choices.

“State and district policymakers alone should not have to shoulder the burden of explaining to a nervous public why making tough changes in harsh economic times is smart for the long term,” the report’s authors wrote.  “Advocacy organizations have a much greater capacity to conduct fiscal analyses, create communications materials, and launch campaigns.”