Stimulus Program Funds for Education


The State Stabilization Fund (SFSF) is primarily designed to help states balance their budgets, as well as to minimize and avoid reductions in education and other essential public services.

State Fiscal Stabilization Fund (SFSF)
Objective: Stabilize state and local government budgets to avoid reductions in education
Amount Available: $48.6 Billion
Who's Eligible: States with pass-throughs to LEAs
How and When: Funds are awarded as formula grants by Dept of Education through state governors’ offices on a rolling basis through Dec. 31, 2009.
The U. S. Department of Education will award governors these funds in exchange for commitments to maintain state spending levels on education at the greater of the fiscal year 2008 or 2009 level in each fiscal year of 2009, 2010, and 2011.

The SFSF funds will be granted to the states in two portions: the Education Stabilization Fund ($39.8 billion), and the Government Services Fund ($8.8 billion), and will be allocated to governors on the basis of each state's relative proportion of individuals aged five to 24, and of total population.

Once stabilization grant funds are used to restore K-12 and higher education spending levels, the remaining funds may be allocated to local education agencies based on the Federal Title I formula. Such funds can be used to support activities related to major education programs such as Title I grants, the Elementary and Secondary Education Act (ESEA), the federal Individuals with Disabilities Education Act (IDEA), the Carl T. Perkins Career and Technical Education Act, and general programs that are geared toward school modernization, renovation or repair, including a provision for green schools.

Schools will be rewarded that develop plans to substantially improve teaching and learning without creating unsustainable recurring costs. Such reforms include:

  • Making progress toward rigorous college and career–ready standards and high–quality assessments;
  • Developing and using data systems for pre–K–through–college/career to track progress and foster continuous improvement;
  • Increasing teacher effectiveness;
  • Ensuring an equitable distribution of highly qualified teachers;
  • Supporting targeted, intensive and effective interventions to turn around schools identified for corrective action and restructuring (low–performing schools);
  • Modernizing, renovating, and repairing schools and college facilities;
  • Using community facilities for early childhood education;
  • Creating "green" education buildings.

The Government Services Fund supports other government services. States may determine how to direct these funds among public safety, health care, social services, or education. Both funds may be used to support school modernization.

There are four guiding principles recommended in the distribution and use of SFSF and other ARRA funds, according to government guidance:

  • Spend funds quickly to save and create jobs;
  • Improve student achievement through school improvement and reform;
  • Ensure transparency, reporting and accountability;
  • Invest one-time ARRA funds thoughtfully to avoid the "funding cliff".

Phase 1 of the SFSF allocations began April 1 through applications from state governors’ offices to the U.S. Department of Education. Sixty-seven percent of the states’ allocations will be provided within two weeks from receipt of approvable applications. Phase 2 will require additional plans from the states in order to receive the balance of the funds, which will be awarded by the end of December 2009. Refer to the links in the resource section, as well as to specific state recovery sites for additional information, and for current timetables for Phase 2.

The Department anticipates that the rolling-basis funds will be available for obligation at the state and local levels until Sept. 30, 2011.

In addition to the funds described above, the Department of Education will reserve $5 billion for competitive grants: the Race to the Top Incentive fund, and the "Invest in What Works and Innovation" fund.

Next fund: Innovation and Incentive Grant Funds under SFSF - $5 Billion >