ESSER Post-Mortem: How Did Districts Spend $190B in Federal Funds? Did It Work?

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Say your boss gives you an unexpected bonus at work. Would you save the money, make those home upgrades you’ve been putting off or splurge on a nice vacation?

School districts had to make similar calculations with the financial windfalls they received in the wake of COVID-19. Known officially as the Elementary and Secondary School Emergency Relief Funds — ESSER — $190 billion was disbursed by Congress to schools and districts in three installments from March 2020 to March 2021.

It was the largest one-time infusion of federal funds ever, and the money officially expires at the end of September. So what have researchers learned about ESSER, and what should it mean for future federal investments?

Any evaluation of the ESSER funding has to start by defining its purpose. Was it intended as a financial lifeline for a large and important public-service sector in the midst of a turbulent economic climate? Was it supposed to nudge schools to reopen their doors for in-person instruction? Or was it meant to help re-engage students and help them address learning loss?

Congress essentially took an “all of the above” approach. It did specify that 20% of the last round of ESSER funding be directed toward addressing learning loss, but the allowable activities were extremely broad and inclusive. Without a clear purpose or goal, districts could — and did — spend their money in wildly different ways.

The result is that no one really knows how districts spent their ESSER money. Marguerite Roza and the team at Edunomics Lab did yeoman’s work of collecting what spending data they could find from state reports, but it’s far from a comprehensive story.

When AASA, The School Superintendents Association, surveyed its members recently, it concluded that the wide diversity of investment strategies with the ESSER money “does not illustrate or support any additional trends within specific categories.” They found that districts spent the funds on tutoring, summer and afterschool programs, facilities, professional development for teachers, supports for English learners and students with disabilities, early-childhood programs and a host of other activities. At an event marking the survey’s release, the superintendent from Umatilla, Oregon, highlighted her district’s choice to invest in a cadre of substitute teachers who could be deployed as needed. The superintendent of schools in Fargo, North Dakota, emphasized the large number of initiatives his district launched and cautioned that those should be evaluated one by one rather than as a group. 

Congress could have set clearer priorities and set aside funding dedicated to specific initiatives, such as tutoring. But it may have been justified in deferring to local communities. Research on school finance has found that, in general, additional money helps boost a variety of student outcomes, but there’s still an open debate about how funds should be distributed and spent. So flexibility was probably the right bet during a period like COVID.

But without greater clarity on goals, the question of whether ESSER funding worked is hard to answer.

Did the program provide a financial lifeline to schools and districts in an uncertain economic climate? That answer is an unequivocal yes. The early rounds of funding helped districts pay for personal protective equipment like masks, upgrade their technology and begin to re-staff schools after COVID layoffs and hiring freezes.

Did ESSER convince districts to reopen their schools? That’s less clear. The first round of funds, which were approved in March 2020, wasn’t enough to help most schools reopen their doors to in-person learning the following fall. And the last round, approved in March 2021, probably came too late to have an effect. According to the AEI Return to Learn tracker, only 7% of districts were fully remote by the time the last round of ESSER passed, and half of all districts remained fully remote or hybrid through the end of that school year.   

Did ESSER boost student outcomes? The early answer to that question appears to be yes, it did lead to meaningful improvements. By identifying districts that happened to get more or less money, two separate research teams found that the ESSER funds helped boost outcomes by a similar amount as past financial investments did.

But did ESSER provide the right amount of money? The answer here is yes and no. The “no” side is dominated by practical realities. One-time windfalls are hard to handle, especially in an industry like education, where 85% to 90% of expenditures are tied to salaries and benefits. In a detailed report on the ESSER funds, New America’s Zahava Stadler quoted a school business official as saying, “While [it was] fantastic that schools had these resources to be able to get through COVID and then try to recover … those big Title I districts got so much money in such a short amount of time. [It’s] really hard to spend hundreds of millions of dollars on one-time expenditures within that window.”

It’s also hard to ignore the fact that the expiration of the money will likely lead to a fiscal cliff as districts scale back. How bad will that be? One way to estimate it is to note that, according to data compiled by FutureEd, districts had about $67 billion in ESSER funds left to spend as of one year ago. That money is now all about gone, and the states are not in a position to fill the gap. This is likely to lead to potentially large program and staffing reductions, which would be destabilizing for schools and bad for kids.

But the other way to look at this question is from the student perspective. It’s fair to conclude that students would likely be far worse off in the absence of the ESSER funds, and they remain so far behind pre-COVID performance levels that researchers estimate it would take an additional $450 billion to $900 billion to get kids fully back on track.

No policymaker is seriously talking about making additional investments on anything close to this sort of scale. But focusing on student learning needs should be the ultimate goal, and that’s a discussion policymakers should be having as the ESSER funds wind down.

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