UPDATED: U.S. Department of Education Allocates Education Funds to States to Provide Continued Educational Services to Students During the Coronavirus Pandemic: What this Means for California Private Schools

Update: On April 30, 2020, the U.S. Department of Education (“DOE”) issued guidance (the “Guidance”) regarding the provision of equitable services to non-public students under two grant programs established by the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”).  As described further below, the Guidance clarifies the DOE’s interpretation of the availability of grant-funded services for students (and teachers) attending non-public schools within these programs.  LCW has updated this Special Bulletin to reflect the Guidance. 

The CARES Act, signed into law on March 27, 2020, established the Education Stabilization Fund (“ESF”) and includes several grant programs, including the Governor’s Emergency Education Relief (“GEER”) Fund and the Elementary and Secondary School Education Relief (“ESSER”) Fund.  In establishing the ESF and these grant programs, the CARES Act directed the DOE to allocate funding to states to prevent, prepare for, and respond to the Coronavirus public health emergency.  Over the last several weeks, the DOE has announced that it has identified the amount of funding the federal government will make available to each state, invited states to apply for such funds and, most recently, issued guidance regarding the scope of the availability of GEER- and ESSER-funded services to non-public school students and teachers.

As described further below, the DOE has interpreted the CARES Act, and specifically the Act’s language requiring a Local Education Agency (“LEA”) to provide equitable services to non-public school students and teachers “in the same manner as provided under Section 1117”of the Elementary and Secondary Education Act of 1965 (“ESEA”), to mean that a LEA must make available equitable services to all students at participating non-public schools located within the LEA’s boundaries unless a state’s governor or State Education Agency (“SEA”), e.g. the California Department of Education (“CDE”), targets certain portions of the funds for specific purposes or subpopulations.   This interpretation of the provision of equitable services under the CARES Act differs from Section 1117 in that under that section, an LEA may only provide equitable services to a subpopulation of students at non-public schools, i.e., students living in a LEA’s boundaries who are deemed eligible for Title I services because they live in low-income communities.

While the DOE’s interpretation of the CARES Act is not legally binding, we anticipate that states and LEAs will look to the Guidance in determining how to distribute GEER and ESSER funds and equitable services to LEAs and non-public schools, respectively.

The CARES Act’s Emergency Education Grants

Through the GEER and ESSER Funds, the DOE will make available approximately $16.2 billion in funding for states, which will then distribute a substantial percentage of the funds as subgrants to LEAs, Institutes of Higher Education (IHEs) and other education-related entities.   Specifically, the GEER Fund allocates approximately $3 billion to states to provide emergency support to LEAs, IHEs and other education-related entities for the purpose of supporting their ability to continue to provide services to both public and non-public school students.  Of the $3 billion in funding, California is eligible for approximately $333 million.

The ESSER Fund allocates approximately $13.2 billion in funds to states to support continued learning for K-12 students whose educations have been disrupted by the Coronavirus.  California is eligible to receive approximately $1.647 billion of the $13.2 billion in ESSER funds.  In order to receive these funds, states must first submit applications to the DOE, which require that the states certify the GEER and ESSER funds will be used for specified purposes.

The GEER Fund

Section 18002 of the CARES Act establishes the GEER Fund.  Pursuant to the Act, GEER funds awarded to states may be used for the following reasons:

1. Providing emergency support through grants to the LEAs that the state educational agency (SEA) deems to have been most significantly impacted by COVID-19 to support the ability of such LEAs to continue to provide educational services to public and non-public school students and to support the on-going functionality of the LEA;
2. Providing emergency support through grants to IHEs serving students within the state that its governor determines have been most significantly impacted by COVID-19 to support the ability of such institutions to continue to provide educational services and support the ongoing functionality of the institution; and
3. Providing support to any other IHE, LEA, or education-related entity within the state that its governor deems essential for carrying out emergency educational services to students for certain authorized activities.  Authorized activities include activities under the Individuals with Disabilities Education Act (‘‘IDEA’’), the provision of childcare and early childhood education, social and emotional support, and the protection of education-related jobs.

The ESSER Fund

Section 18003 of the CARES Act establishes the ESSER Fund.  Of the approximately $1.65 billion in ESSER funds that the DOE has allocated for California, the State must reallocate 90 percent of the funds, or approximately $1.48 billion, as subgrants to LEAs.

Pursuant to the Act, ESSER funds awarded to states and distributed to LEAs may be used for specified purposes, including but not limited to:

1. Any activity authorized under the Elementary and Secondary Education Act of 1965 (“ESEA”), including activities authorized under the IDEA;
2. Coordination of preparedness and response efforts of LEAs with State, local, Tribal, and territorial public health departments, and other relevant agencies, to improve coordinated responses among such entities to prevent, prepare for, and respond to coronavirus.
3. Providing principals and others school leaders with the resources necessary to address the needs of their individual schools.
4. Activities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth, including how outreach and service delivery will meet the needs of each population.
5. Planning and coordination during long-term closures, including for how to provide meals to eligible students, how to provide technology for online learning to all students, how to provide guidance for carrying out requirements under the and how to ensure other educational services can continue to be provided consistent with all Federal, state, and local requirements.
6. Purchasing educational technology (including hardware, software, and connectivity) for students who are served by the LEA that aids in regular and substantive educational interaction between students and their classroom instructors, including low-income students and students with disabilities, which may include assistive technology or adaptive equipment.
7. Providing mental health services and supports.
8. Planning and implementing activities related to summer learning and supplemental afterschool programs, including providing classroom instruction or online learning during the summer months and addressing the needs of low income students, students with disabilities, English learners, migrant students, students experiencing homelessness, and children in foster care.

Assistance Available To Private Schools

The CARES Act requires that states allocate GEER and ESSER funds so as to “provide equitable services” to “students and teachers in non-public schools, as determined in consultation with representatives of non-public schools” in “the same manner as provided under section 1117 of the ESEA.”   The CARES Act defines “non-public school” to mean a “non-public elementary and secondary school that (A) is accredited, licensed, or otherwise operates in accordance with State law; and (B) was in  existence prior to the date of the qualifying emergency for which grants are awarded under this section.”  A non-public school includes only non-profit schools.

The DOE has interpreted the requirement that LEAs provide equitable services to students and teachers at non-public schools to mean that once a state allocates GEER and ESSER funding to LEAs—which it must do in proportion to the amount of funds each LEA within the state receives under Title I, Part A of the ESEA—each LEA will then have to make available GEER and ESSER-funded services to all students attending non-public schools within the LEA’s geographic boundaries, if those schools elect to participate in the GEER or ESSER programs.  In other words, equitable services must be made available to non-public schools “without regard to poverty, low achievement, or residence in a participating Title I public school attendance area,” subject to certain exceptions discussed below.

Furthermore, the Guidance provides that Section 200.66 of Title 34 of the Code of Federal Regulations (“Section 200.66”), which mandates that an LEA may not use Title I, Part A funds to benefit the “needs of a private school” or the “general needs of children in the private school,” do not apply to CARES Act funds.  For example, the Guidance states that equitable services under the CARES Act “may benefit a non-public school, such as purchasing supplies to sanitize and clean the facility.”  Additionally, unlike Section 200.66, which mandates that an LEA use funds under Title I, Part A to “provide services that supplement, and in no case supplant, the services that would, in the absence of Title I services, be available to participating private school children,” the CARES Act provisions do not contain the same “supplement not supplant” language.

To determine the funds that a LEA must reserve for purposes of providing equitable services to non-public school students and teachers, the DOE has directed LEAs to take the following steps:

• First, the LEA must initiate consultation with officials at all non-public schools in the LEA’s geographic boundaries to “notify them of the opportunity for their students and teachers to obtain equitable services under the CARES Act programs.”  However, if non-public school officials have not been contacted, they may reach out to the LEA to inquire about equitable services.

• Next, the non-public school must inform the LEA in which it sits if it wishes to receive equitable services for its students and teachers through the CARES Act programs.

• Once the LEA has identified which non-public schools within its boundaries wish to receive equitable services from the LEA for their students and teachers, the LEA must utilize enrollment data to determine the overall number of students enrolled in public schools and the overall number of students enrolled in participating non-public schools within the LEA.  The proportion of these non-public school students to public school students within the LEA will determine the amount of funds the LEA must reserve for purposes of providing equitable services to students and teachers at participating non-public schools.  The DOE has provided the following example:

An LEA receiving $100,000 under the GEER Fund and $900,000 under the ESSER Fund, and with 1,350 public school students and 150 non-public school students, would determine the proportional share as follow:

An LEA, after reserving funds that are reasonable and necessary for administering equitable services to students and teachers at participating non-public schools, will then divide the remainder of the proportional share of funds available for equitable services by the total enrollment in participating non-public schools to obtain a per-pupil amount.  The LEA must then multiply the per-pupil amount by student enrollment in the individual participating non-public school to determine the amount of services the LEA can provide to students and teachers at that non-public school.  An LEA may enter into an agreement with a group of non-public schools “to pool funds among a group of non-public schools and provide equitable services to students and teachers in” those non-public schools “based on need without regard to how the funds were generated.”

An LEA must consult with representatives from participating non-public schools during the “design and development of the LEA’s programs and before the LEA makes any decision that affects the opportunity of non-public school students and teachers to participate in activities under the CARES Act programs.”  The goal of consultation is for the LEA and non-public school to agree on how to provide equitable and effective services to non-public school students.

Those private schools eligible for equitable services paid for by GEER and ESSER funds will not receive the funds directly.  Rather, the CARES Act provides that any funds provided to LEAs for purposes of serving “non-public schools” will be controlled by the LEA in which the non-public school sits.  Services for non-public school students and teachers must be provided by the LEA directly or through the LEA’s contract with another public or private entity.

The CARES Act Permits States To Target Funds For Specific Purposes Or Populations, Which Could Limit Which Students And Teachers At Non-Public Schools In California Will Ultimately Be Able To Take Advantage Of Equitable Services Under the GEER Fund

Despite the DOE’s interpretation that LEAs must make GEER and ESSER-funded services available to all non-public school students and teachers at participating non-public schools, the Guidance also recognizes that the CARES Act permits a state’s governor, under the GEER fund, or a SEA, under the ESSER fund, to target funds for specific purposes or subpopulation of public and non-public school students.   However, the ability of a SEA to target ESSER funds for specific purposes is limited to the maximum ten percent of ESSER funds a state may reserve for the SEA, not the minimum ninety percent of funds that a state must allocate to LEAs.  This means that for purposes of the GEER funds allocated to LEAs, IHEs and other education entities, the Governor may, for example target GEER funds to support student subpopulations at public and non-public schools that it “deems have been most significantly impacted by coronavirus” or for particular purposes such as the provision of child care, early childhood education or social and emotional support.

Given a state’s right under the CARES Act to earmark GEER funds for specific purposes or to support subpopulations of students, it is currently unknown how the State of California will permit LEAs to utilize GEER funds.  Furthermore, unlike the CARES Act’s requirement that LEAs consult with officials at non-public schools before the LEA can make decisions about what services will be available at public and non-public schools, there is no consultation requirement that the Governor  consult with non-public schools in California before making such determinations.  Therefore, until California issues additional guidance regarding these CARES Act programs, private schools will not know if GEER-funded services will be available to all their students and teachers or will be limited to certain purposes or subpopulations.

Potential Implications For Private Schools That Receive GEER And ESSER-Funded Services

LCW previously reported that other federal funds were recently made available to assist California private schools in their responses to the COVID-19 pandemic.  These funding mechanisms, made available through the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”), as well as the Main Street Lending Program, are designed to provide economic relief and continued employment to small businesses, including many private schools.  However, we explained that one factor to consider when applying for these loans is that receipt of these loans likely will trigger compliance obligations under certain federal civil rights laws that otherwise do not apply to private schools.

Unlike the PPP, EIDL and Main Street Lending Program, which are funded directly by the federal government and distributed to private schools through approved lenders, the federal government will first distribute GEER and ESSER funds to states, which then distribute subgrants to LEAs, which must then provide “equitable services” to students and teachers in non-public schools.  As this federal funding stream does not put federal funds directly in the hands of private schools, it is less clear whether receipt of services funded by GEER and ESSER funds will have a similar effect of making private schools subject to certain federal civil rights compliance obligations.  The DOE has advised that receipt of a non-public school whose students and teachers receive equitable services under the GEER and ESSER programs is not a “recipient of Federal financial assistance” for purposes of compliance with other federal laws, including federal civil rights laws.  However, in a similar funding stream scenario, i.e. funds allocated to an LEA with equitable services then provided to a private school, at least one court has found that such a funding stream required a private school to comply with the provisions of Section 504 of the Rehabilitation Act of 1973.

If your school anticipates that it may be eligible to receive GEER and ESSER-funded services, we recommend contacting legal counsel, including with regard to the potential implications for your school’s compliance with other federal civil rights laws.

Next Steps

As addressed above, we anticipate that the State of California will issue further guidance regarding the allocation GEER and ESSER funds to LEAs, and specifically whether the State will target funds for specific purposes or subpopulations of public and non-public school students.  Will we provide further updates as information becomes available.