The U.S. Education Department threw school districts and state education agencies into yet another cycle of confusion and chaos this weekend with its abrupt Friday announcement that the deadline to spend remaining COVID relief funds had already passed, and that it was revoking all the extensions it had granted.
With a two-page letter to states, the department effectively canceled hundreds of millions of dollars in federal funds overnight, offering little clarity on whether and how states and districts could recover that money.
Some districts are already moving to cancel long-planned projects, dip into emergency funds, and renegotiate already-signed contracts. Meanwhile, state education departments were scrambling as of Monday afternoon to interpret the new federal policy, communicate changes to affected districts, and even strategize potential legal action.
“Shocked does not begin to describe our reaction” to the letter, said Carey Wright, Maryland’s superintendent of education, during a call with reporters Monday morning.
“These funds have been spent and committed with every expectation for reimbursement,” she added. “The federal government must keep its word.”
Education Secretary Linda McMahon sent every state the same letter on Friday evening, announcing that the department had moved up the deadline for districts to “liquidate,” or spend, the remainder of their federal pandemic-relief funds. Instead of having a year left, districts now had no additional time to liquidate their money—the deadline had changed to the day the email went out, McMahon said.
Maryland and Missouri are among the states urging districts to pause work on initiatives they were planning to pay for with federal relief money. Spokespeople for those states, along with Connecticut and Vermont, told Education Week they plan to petition the department to restore extended timelines for individual districts’ purchases funded by pandemic aid.
Andrew O’Leary, superintendent of the New Bedford school district in Massachusetts, saw the federal dispatch late Friday night and “didn’t get much sleep,” he said.
His district of 13,000 students now may have to cancel plans to outfit a 1970s-era school building with its first-ever HVAC system, and expand the district’s health services with a new school-based clinic.
“As early as Saturday morning, we were in buildings, looking at our exposure, informing our stakeholders, making what plans we could,” he said.
Federal approvals for late spending are no longer in effect
Schools received roughly $200 billion in emergency relief funds from the federal government over three rounds in 2020 and 2021. Federal rules gave districts until Sept. 30, 2024, to “obligate” the last of those funds, or commit them to particular expenses, and then until Jan. 30, 2025, to “liquidate,” or spend the money they’d already obligated.
More than two years ago, the Education Department under Secretary Miguel Cardona began offering the opportunity for schools to extend the liquidation deadline, notifying states that they could request approval on behalf of individual districts for “late liquidation” of ESSER and other pandemic-relief funds. The obligation deadline did not change at any point.
Districts nationwide obligated and liquidated the vast majority of pandemic-relief money by the respective original deadlines. Still, more than 40 states had secured late liquidation approval prior to Friday’s letter for roughly $2.5 billion in funds from the last and largest round of ESSER, according to an Education Department tally from February published by K-12 Dive.
Twenty-five states secured federal approval for late liquidation of $433 million from the Emergency Assistance to Non-Public Schools program for private schools, K-12 Dive reported. Close to 30 states got a similar extension for funds from the Education for Homeless Children and Youth program, according to a tally by Schoolhouse Connection, an advocacy nonprofit.
Some states’ late liquidation requests covered every district, as in Maryland, where all 24 school systems are affected by the abrupt deadline change. Other states have a fraction of their districts with pandemic money still in late liquidation: 25 out of 140 in Connecticut; nine out of 12 in Delaware; 21 out of more than 300 in Massachusetts; 27 out of 540 in Michigan.
Many districts that asked their state to secure spending extensions said they needed more time to finish out contracts they’d already signed with vendors for tutoring, construction, and mental health services.
Equipment and materials were beset with supply chain delays; contractors were hard to book because so many districts wanted their help at the same time; and schools only have a few months during the year when they can do major building renovations without disrupting learning.
The Education Department approved virtually all of states’ late liquidation requests. But as of March 28, those approvals are now wiped out, McMahon wrote, unless states ask the department again for a deadline extension for specific projects, and explain how that project’s expenses connect to mitigating the effects of the pandemic.
Some states are now unexpectedly on the hook for millions of expenses they had expected the federal government would cover. Maryland officials said they’ve already sent out more than $300 million of education funds previously approved for late liquidation. They’re now under the impression that federal reimbursement won’t come to backfill those state funds, even though they’ve already spent the money according to the previously approved guidelines.
The state also has another $113 million approved for late liquidation that it hasn’t yet spent, either itself or to cover districts’ bills.
Top officials in several states on Monday blasted the Trump administration’s decision. New Jersey Gov. Phil Murphy, a Democrat, in a statement called the changes—affecting $85 million for the state’s K-12 schools—"reckless and irresponsible.”
Connecticut officials planned to discuss late liquidation during a meeting with Department of Education officials on Monday, said Matthew Cerrone, spokesperson for the state education department.
The U.S. Education Department defended McMahon’s letter in a statement Monday.
“The Biden administration established an irresponsible precedent by extending the deadline for spending the COVID money far beyond the intended purpose of the funds,” wrote Madi Biedermann, a spokesperson for the department.
Biedermann didn’t answer questions about when applicants could expect to see individual extension requests approved or rejected.
Districts may have to cancel construction projects and forgo new instructional materials
The school district in New Bedford, Mass., where roughly 80 percent of students are from low-income families, has roughly $12 million of ESSER funds previously approved for late liquidation on five building projects: renovating a central kitchen; adding modular classrooms to a school; bringing a school building into compliance with federal disability law; adding an HVAC system to a 1970s-era building that doesn’t have one; and opening a new school-based health center.
The first three of those projects are close to completion, O’Leary, the superintendent, said. The district should be able to float an emergency surplus fund to fulfill contracts if federal money indeed doesn’t come through.
But without additional funding streams, the other two projects could be delayed or canceled altogether, he said. And using those surplus funds now means the district won’t have them for future emergencies.
“We’re drawing on our reserves essentially to manage this one-time crisis,” O’Leary said. “Our expectation and our demand is that those funds are restored.”
The Mercer County school district in rural Illinois has two small projects in the pipeline for this summer: an HVAC upgrade and a playground equipment installation.
“Those are contracts we must honor,” Superintendent Tim Farquer said. “That’s a $240,000 hit if we don’t get reimbursed as promised.”
In Maryland, some school districts owe funds to vendors for new instructional materials on the science of reading that haven’t been delivered yet, and to help cover tuition costs for participants in a “grow-your-own” educator preparation program, State Superintendent Wright said Monday.
Utah’s two biggest school districts have a combined $6 million worth of HVAC projects now in jeopardy, said Ryan Bartlett, a spokesperson for the state board of education.
“Based on the language in the update, these districts would likely not be able to request a late liquidation approval for these projects,” Bartlett said.
Education leaders in Michigan said the affected programs would likely include ongoing efforts to improve student health in communities like Flint and Pontiac that were hit hard by the pandemic.
“To cancel funding approval on no notice and to tell districts that they may apply for a second approval from the U.S. Department of Education to access these funds, with different criteria, has nothing to do with service to schoolchildren,” Pamela Pugh, president of the Michigan state board of education, wrote in a statement.
O’Leary in Massachusetts said he’s skeptical that the department will grant extension requests if states resubmit the ones that the federal Education Department previously approved.
“The letter talks about timelines and how they’ve been exceeded. It then proposes a whole new resubmittal of projects which are already going,” O’Leary said. “It makes no sense on its face.”
