COVID-19 Funding Relief: State and Federal Supports for North Carolina’s Education System

The ongoing coronavirus pandemic has required a fundamental shift in how student needs are met in both K-12 and Higher Education across the nation. Through legislative action at the federal level and executive action at the state level, education systems in North Carolina are eligible for funding resources to aid educators across the continuum in their efforts to meet the diverse needs of students and families. However, it does not appear that these funds alone will be sufficient to meet the needs of North Carolina’s schools and institutions.

Federal Funding

As part of the Coronavirus Aid, Relief and Economic Security, or CARES, Act the U.S. Department of Education (ED) has allocated Education Stabilization Fund Grants totaling over $30 billion to provide direct money to K-12 and higher education to support areas impacted by the disruption and closure of schools due to the coronavirus pandemic. Two percent of the total funds will be reserved for administrative costs, Bureau of Indian Education programs, and coronavirus concentration grants (reserved for states facing the greatest hardship.) States will receive the remaining grant funds, available through September 2021, across three categories: the Elementary and Secondary School Emergency Relief Fund, the Higher Education Emergency Relief Fund, and the Governor’s Emergency Education Relief Fund.

To receive these funds,

• State education agencies (SEAs), local education agencies (LEAs), and institutions of higher education (IHEs) must retain current employees to the “maximum extent practicable.”
• The state must maintain funding of elementary and secondary education and higher education at levels that are the average of the State’s support in the three fiscal years preceding the date of enactment (with the potential for a waiver if there is a significant decline in financial resources).
• Equitable services must be provided through both the Governor’s Emergency Relief Fund and the Elementary and Secondary Emergency Relief Fund, mirroring equitable services provided in Title I, including consultation requirements.

North Carolina House Bill 1043, signed by Governor Roy Cooper on May 4^th, allocated federal funding from the CARES Act. Key allocations include:

Elementary and Secondary School Emergency Relief Fund (ESSERF)

The CARES Act allocates nearly 44 percent of total grant funds to states to directly support elementary and secondary schools. These funds will be distributed to states in the same proportion as their most recent Title I award. Based on this formula, North Carolina is estimated to receive $388,875,202 for its elementary and secondary schools. While the , the Secretary of Education must issue a notice inviting applications no later than 30 days after enactment of the CARES Act, and then will approve or deny state applications no later than 30 days after receipt.

At minimum, states must disperse 90 percent of these funds as sub grants to LEAs and charter schools in the same proportion as they received under Title I, Part A. The Department of Public Instruction must make all subawards within a year of receiving the funds or the remainder will be reallocated to other states. While the exact per district allotments have not yet been released, the Department of Public Instruction has released estimated figures for planning purposes.

These funds may be used for:

• Any activity for any authorized Elementary and Secondary Education Act program, Individuals with Disabilities Education Act (IDEA) program, Career and Technical Education or Adult Education Program, or Homeless Youth Education Program;
• Coordination of coronavirus response efforts between an LEA and other government organizations;
• Providing principals and other school leaders with the resources necessary to address individual school needs;
• Activities to address the unique needs of special student populations (e.g., low-income, disabled students, English language learners, minority students, homeless students, foster care students, etc.);
• Developing and implementing procedures and systems to improve the preparedness and response efforts of LEAs;
• Training or professional development for staff on sanitation and minimizing the spread of infectious diseases;
• Purchasing sanitation supplies;
• Planning for long term closures;
• Planning for providing meals to eligible students, planning for online learning, planning for meeting the requirements of IDEA during distance learning, etc.;
• Purchasing educational technology (including hardware, software, and connectivity) for students served by the LEA – which can also include assistive technology for disabled students;
• Providing mental health services and support;
• Planning and implementing activities related to summer learning and supplemental after-school programs; or,
• “Other activities that are necessary to maintain the operation of and continuity of services in LEAs” and continuing to employ existing staff of the LEA.

A maximum of 10 percent of the total funds states receive may be reserved for the SEA, with 0.5 percent eligible to cover administrative costs, and the remaining 9.5 percent set aside for “emergency needs” in the state’s response to COVID-19. 

Higher Education Emergency Relief Fund (HEERF)

Approximately 46 percent of Education Stabilization Fund Grants are earmarked for Institutions of Higher Education (IHEs), totaling nearly $14 billion. These funds are allocated through the Title IV distribution system using a formula based on a combination of the number of enrolled students eligible for the Pell Grant program and the number of non-Pell eligible students. In total, IHEs in North Carolina, both public and private, are eligible to receive over $365 million through this fund. Please see the tables at this link which list the exact amount that each North Carolina community college and four-year institution is eligible to receive. IHEs must reserve at least 50 percent of their allotment to provide students with emergency financial aid grants, including “grants to students for food, housing, course materials, technology, health care, and childcare.” The remaining funds may be used at the institution’s discretion to cover costs associated with the changes that have been made to the delivery of instruction.

In addition, approximately $1.047 billion is reserved for minority-serving institutions (MSIs). Institutions that are most heavily impacted by coronavirus are eligible for an additional $349 million in grants (administered through the Fund for the Improvement of Postsecondary Education.) Smaller institutions that receive less than $500,000 under the other allocation methods and still demonstrate significant unmet need will receive priority for these grants.

Governor’s Emergency Education Relief (GEER) Fund

In the CARES Act, Congress set aside nearly $3 billion for the Governor’s Emergency Education Relief (GEER) Fund to provide Governors with flexible emergency block grants to empower states to best meet the current needs of students, schools (including charter schools and non-public schools), IHEs, and any other education-related entities. Based on the funding formula provided by the ED, North Carolina will receive approximately $95 million through the GEER Fund. Once states have submitted their applications, the USDE expects to dispense the funds within three business days.

The Governor may provide subgrants that:

• Provide emergency support through grants to LEAs that the State educational agency deems to have been most significantly impacted by coronavirus;
• Provide emergency support through grants to IHEs serving students within the State that the Governor determines have been most significantly impacted by coronavirus; and,
• Provide support to any other IHE, LEA, or education-related entity within the State that the Governor deems essential for carrying out emergency educational services to students, providing child care and early childhood education, providing social and emotional support, and protecting education-related jobs.

State Funding – $50 Million in Additional Support

 In addition to the forthcoming federal funding, Governor Roy Cooper directed $50 million be allocated in school funding flexibility to meet the needs of students during the COVID-19 pandemic. Comprised of unused funds from the current and previous year, as well as State Emergency Response and Relief Fund, these funds can be used to support school nutrition, school and community-based child care, cleaning and sanitizing schools and buses, purchasing of protective equipment, and remote learning.

The Governor authorized the North Carolina State Board of Education and the Department of Public Instruction to allocate these funds. The Board voted to apportion half of the stimulus among counties based on student enrollment, and the other half based on a low-wealth formula, calculated by combining student enrollment and the county’s low wealth designation. This policy has not been without its critics, however, as the low wealth designation was designed as part of a larger funding structure, not as a stand alone measure.