The Education Stabilization Fund: How COVID Relief Reached Schools

Last updated 2 weeks ago. Our resources are updated regularly but please keep in mind that links, programs, policies, and contact information do change.

One district used federal COVID relief to reopen school libraries that had been closed for more than a decade. Other districts hired social workers or psychologists or bought telehealth therapy. The same school relief program could restore a basic service or add support for students’ mental health.

Congress created the Education Stabilization Fund to help education systems respond to the pandemic. The fund also supported governors and colleges through separate grants.

For schools, federal formulas sent the money to states, which passed most of it to districts. Federal rules set conditions, but districts made many of the choices about how to use their grants. That left a practical question for each community: what did its schools buy, who could use it, and what did students gain?

One fund, several routes

The Coronavirus Aid, Relief, and Economic Security Act, enacted on March 27, 2020, set up three principal channels: emergency aid for governors, elementary and secondary schools, and higher education. Congress enlarged the school channel in legislation enacted on December 27, 2020, and again in the American Rescue Plan Act enacted on March 11, 2021. Those dates matter because each round carried its own amount and some different conditions.

The Elementary and Secondary School Emergency Relief (ESSER) program received $13.229 billion in the first law, $54.311 billion in the second, and $122.775 billion in the third, before the latter’s separate homeless-student set-aside. The original fund also included the Governor’s Emergency Education Relief program and the Higher Education Emergency Relief Fund. A governor’s award, a district’s ESSER grant and a college’s student-aid grant were not interchangeable pots of money.

The Department of Education administered the fund, whose first-year appropriation under the CARES Act was $30.750 billion. The later school grants were much larger, but the total federal appropriation should not be confused with money a single district could spend.

How a district got its share

For the last ESSER round, federal law divided the state grants in proportion to states’ recent Title I, Part A allocations. Title I is the federal aid formula associated with schools serving children from low-income families; its past allocations served as the measuring stick, not a new application by each parent. States then had to send at least 90 percent of their ESSER awards to local educational agencies, including qualifying charter schools, according to each agency’s Title I share.

For the first two rounds, states could keep up to 10 percent for statewide responses to COVID-19, with no more than half a percent of the total award for administration. The last round added state reservations for learning recovery, summer programs and after-school programs. The formulas decided who received money; they did not decide whether a given district needed ventilation, tutoring or staffing most urgently.

The American Rescue Plan round required districts to consult students, families and staff while developing spending plans. It also required a public plan for safe return to in-person instruction, with public comments sought before the plan was posted. A public plan gives residents a place to examine a district’s intentions, though it is not itself a receipt for spending or proof of an outcome.

The Government Accountability Office (GAO) heard about that library reopening from district officials. A library reopening and a new tutoring schedule could both fit the broad relief purpose, even though they would call for different evidence of benefit.

What schools chose to buy

Districts receiving American Rescue Plan ESSER funds had to reserve at least 20 percent for evidence-based responses to learning loss, including summer learning, extended days and after-school programs. In its 2024 review of spending through the 2021-22 school year, GAO found that roughly 80 percent of reported district expenditures went to academic, social and emotional needs or keeping schools operating. The remaining fifth went to physical and mental health measures such as cleaning supplies, ventilation and school psychologists.

GAO also noted that 14 million students missed valuable instructional time in the 2021-22 school year. A district choosing between attendance outreach and building improvements was confronting more than one kind of pandemic damage.

One district GAO visited used ESSER money to establish reset centers, spaces in its middle and high schools to help students manage their behavior. GAO reported that officials in 12 of the 17 districts it interviewed had hired social workers or psychologists or purchased telehealth therapy. In the district with reset centers, officials said a student with a minor discipline problem normally spent one period there and then went back to class. That describes a documented service, not evidence that the centers improved behavior or learning.

In December 2022, AASA objected to Education Department guidance that strongly discouraged districts from using ESSER money for construction. Its September 2024 survey project described five rounds of asking district leaders how they planned to use American Rescue Plan money. For superintendents, flexibility was valuable because the most urgent problem varied from one community to another and construction could outlast a grant deadline.

AASA objected that federal guidance offered too little flexibility when a pandemic-related construction project ran past the obligation deadline. The obligation deadline governed timely commitments; an approved liquidation extension could permit payment later for allowed costs already committed.

EdTrust urged education leaders to respond to the funding cliff with equity at the center, especially for students underserved before the pandemic. An EdTrust brief warned that weak attendance at a summer program could reflect a lack of transportation, even if students who attended made gains.

EdTrust pointed to tutoring, high-quality instructional materials and mental health resources as ways to support recovery. EdTrust urged attention to whether relief-funded plans translated into sustained academic support as one-time federal aid ended.

College students and nonpublic schools took different routes

The governor’s relief fund let governors provide emergency grants to colleges most affected by the pandemic. That channel did not use the same district-by-district formula as ESSER. The governor-related stream included an Emergency Assistance to Non-Public Schools program.

For the first college relief round, Congress required institutions of higher education to devote at least half of their grants to emergency financial aid for students. The law listed food, housing, course materials, technology, health care and child care among expenses related to disrupted campus operations. A student could receive help through a college without the family ever applying for a district’s ESSER grant.

The deadline was for commitments, not every final payment

The last ESSER round had a September 30, 2024, deadline to obligate funds. Obligating money means making a qualifying commitment; liquidation means paying it out afterward. The normal liquidation period was 120 days after the obligation deadline, and states could seek extensions on districts’ behalf.

The Department of Education said federal money could pay only for allowed costs committed during the grant period, even when a payment was made under a later liquidation extension. An extension was not permission to begin a new project after the commitment deadline. GAO reported that the department approved every state request it received for extensions of the first two ESSER rounds and provided a template for the last round.

GAO’s September 2024 report found about $60 billion in district ESSER spending through the 2021-22 school year. That cannot tell a reader how much remained unspent after the later obligation and liquidation deadlines.

What the evidence does, and does not, prove

The 2025 National Assessment of Educational Progress long-term trend results showed that average reading and math scores for 9-year-olds were four points higher than in 2022. The same release reported no statistically significant change for 13-year-olds compared with 2023. Those national changes cannot, on their own, show whether ESSER caused gains in one district or why older students’ scores differed.

A March 2025 Education Department inspector general review of a Nevada district found 12 of 16 sampled expenditures allowable and four, totaling $5,416, unallowable advertising or public-relations costs. The finding identifies a concrete control problem in a sample; it is not a national estimate of misuse.

In January 2026, GAO released a report on the American Rescue Plan's maintenance-of-equity rule. The report recommended that the Education Department document and share lessons from new and ongoing initiatives. The department disagreed with two GAO recommendations and partly agreed with a third. GAO’s findings and the department’s response do not establish whether the entire relief program raised achievement.

How to check a local award

A Congressional Research Service report identified USAspending.gov and the Education Department’s ESF Transparency Portal as sources for state-level awards and expenditures. Start with the state, program and grant round; a single district may appear in more than one funding stream. The federal portal’s state tables distinguish money awarded from money reported as spent.

GAO points readers to the Department of Education's online portal for ESSER spending data. Open the Education Stabilization Fund Transparency Portal and search for the district under the appropriate ESSER round. On the district page, compare the reported spending with the award and check the reporting period.

For a district-level question, its public return-to-school plan shows its proposed reopening steps. Districts had to seek and consider public comments before posting that plan. Compare that document with later expenditure records, rather than treating a plan as evidence that a service was delivered. The Education Department inspector general’s hotline accepts concerns about suspected fraud, waste, abuse or mismanagement involving department funds.

The most reliable account of local relief begins with the route the money took, follows the actual spending, and keeps a separate question open about what students gained.