This is the second installment of an article based on a webinar presented May 18, 2016 by Jenny House of RedRock Reports and Steven Rowley of Acumen Partners. Read Part 1, here. The new Every Student Succeeds Act (ESSA) will have a profound impact on how federal education funds will be distributed. Its specific impact on federal Title funds is detailed below.

Title IV, Part A

One of the most important ESSA funding changes is the creation of a new Title fund: Title IV, Part A for Student Support and Academic Enrichment. Although the fund is new, the money itself isn’t. The federal government collapsed and consolidated 49 small programs to create this nearly $1.7 billion fund. Title IV, Part A is of particular importance to education vendors because there is flexibility in how these funds can be spent.

Fund disbursement will be formula-driven, just as it was with No Child Left Behind (NCLB), and will based on the Title I formula. If Title IV, Part A is fully funded, each district will get a minimum of $10,000. If they receive more than $30,000, districts will be required to complete a needs assessment explaining how they plan to spend the money in three categories:

  1. Well-rounded learning experiences that support STEM, arts, music, integrated curriculum, and more.
  2. Safety and health programs that promote the development of the whole learner through drug and violence prevention, bullying and harassment prevention, athletics, positive behavior support, and more.
  3. Effective technology that provides the technology infrastructure necessary to personalize learning and establish blended learning environments.

If fully funded, the well-rounded education and safety and health categories will each have $330 million; the effective technology program will have $960 million.

If districts receive less than $30,000, they can spend that money any way they want with just one restriction: no more than 15 percent of technology funds can be spent on infrastructure. This is to ensure that all students have hardware and connectivity, and it includes a one-time acquisition of PCs, tablets and other equipment. It’s also important to note that technology purchased with eRate funds cannot be paid for with Title IV funds.

Good News, Bad News

President Obama’s FY17 budget includes only $500 million, creating a gap between the funds called for in ESSA and what is currently before Congress. If the budget stays at its current level, states will have to compete for the money. If the Title is fully funded, then all of the money will be awarded by formula. The good news is that ESSA had bipartisan support; however, appropriations could be affected by the current election cycle.

Also, the SIG program for school improvement will end in 2017, and it will be left up to the states to determine which schools and students require intervention and where that money will come from. Right now it’s unclear whether or not SIG schools in mid-cycle will continue to be funded until the end of their original commitments.

States can use no more than 5 percent of Title IV money to manage this program. Because state departments of education are understaffed, it could be a challenge to plan, implement and staff the program with the money that it has been allocated.

Where Do We Go From Here?

Seven states will be selected to work with the federal government on a Title IV pilot program. Those states have not yet been selected, but all eyes will be watching closely for updates throughout the 2016-2017 transition year.

For more information specifically about funding changes under ESSA, watch our August 25 webinar, It's All About the Money: ESSA Rules and Funding.

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