Ed Dept's final rule on CARES funding partially backtracks earlier guidance

Dive Brief:

Following controversial guidance from the U.S. Department of Education on CARES Act funding distribution between public and private schools, Secretary of Education Betsy DeVos announced Thursday a final rule giving school districts some choice in how they distribute their allocations.
According to the final rule, a district can choose to distribute the funds strictly to Title I schools or to all schools.
- If a district chooses to fund only Title I schools, it must also distribute funds to low-income students in local private schools. But districts cannot use a remainder of the funds to offset cuts.
- If a district chooses to fund all schools, it must also set aside a share for all local private schools.
The final rule will be effective immediately, but the department is allowing a 30-day comment period.

Dive Insight:

The final rule follows controversial guidance released in April that encouraged districts to use nearly $13.2 billion in federal funds to support both public and private schools. Distributing funds to low-income children attending private schools, rather than to private schools based on their total enrollment data, is typical for annual Title I calculations. But in distributing the federal aid, the department encouraged funding be distributed to private schools based on their total enrollment data rather than their share of low-income children.

At the time, education organizations such as the Council of Chief State School Officers expressed concern the funds would be disproportionately misdirected to private schools. The organization said in a letter to the department that Congress intended the funds to help "in areas of the most need, where the educational and social impacts of the COVID-19 crisis will be most extreme and difficult to overcome with limited local funds."

States sought clarification around the guidance, as well. In a letter to the department, the Pennsylvania Department of Education said the guidance "created confusion" as to why funding calculations should be based on total number of private school students instead of the number of low-income children attending those schools. Based on the state's initial calculations, using the department's suggested formula would have increased funding for advantaged students and "roughly double[d]" the funds for private schools.

With the new rule, the Education Department has partially backtracked its original guidance that districts allocate funds for private schools based on their total enrollment and instead requires districts to only support low-income students at those schools. The new rule is more consistent with Title I regulations.

At the same time, it also requires districts to choose between funding only low-income students, or all students, including affluent students in private schools. And it also ensures that if districts choose to support only low-income students, they cannot redirect the remainder of Title I funding to higher-income public schools to offset the impact of cuts.

"While a number of traditional public schools aren't sure whether they will open their doors again in the fall," DeVos said on a press call, "more than 100 private schools, including many Catholic schools, have already announced they will never reopen, and hundreds more face a similar fate."

In response to the rule, Rep. Bobby Scott (R-Virginia), chairman for the House Committee on Education and Labor, said in a press release there is bipartisan agreement that the department's new rule and interpretation violates "both the letter and spirit" of the CARES Act.

"Regardless of which option a school district chooses, the Department’s new rule still forces them to divert valuable resources intended for low-income students to serve private school students, regardless of wealth," Scott said.

Jim Blew, the department's assistant secretary for planning, evaluation and policy development, said he foresees Congress possibly changing CARES Act language if the result of the rule is not in tandem with their intent of the law, and that the Education Department will act accordingly to any future changes.

According to AASA, The School Superintendent's Association, the rule would shift $1.3 billion from Title I public school students to students in private schools. The Learning Policy Institute's analysis of the Education Department's original guidance showed that $1.35 billion of the total CARES funds would be directed toward private schools, or 10% of the total amount.

"We do expect that there will be a lawsuit, probably a request for an injunction, sometime very soon," said Blew. "The courts will decide who is right in that."