Updates: American Recovery and Reinvestment Act of 2009 (ARRA)

February 27, 2009 Update:

Memo to the Field, from Johanna Duncan-Poitier, Senior Deputy Commissioner of Education - P-16, on "The American Recovery and Reinvestment Act of 2009 (ARRA)"

Office of Elementary, Middle, Secondary and Continuing Education
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District Superintendents of Schools
Superintendents of Schools
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Chief Executive Officers of Institutions of Higher Education
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From: Johanna Duncan-Poitier
Date: February 27, 2009
Subject: The American Recovery and Reinvestment Act of 2009 (ARRA)

I am writing to provide you with an update on the federal American Recovery and Reinvestment Act (ARRA) of 2009 that was signed into law by President Obama on February 17, 2009.  The ARRA (Public Law 111-5) contains $787 billion in new federal spending and tax cuts including approximately $100 billion for education funding, college grants and tuition tax credits.  Education Secretary Arne Duncan has emphasized the urgency of distributing these funds to states quickly to avert layoffs and has committed to publishing timelines and providing guidance beginning the week of March 2nd so that states and districts can plan accordingly.  In addition, the ARRA contains new federal funding for a wide variety of programs that will benefit public, school and academic libraries and the citizens who use them.

An Economic Recovery and Reinvestment Cabinet has been established by Governor Paterson to manage the development of state and local infrastructure projects financed through the ARRA.  The cabinet is composed of state agency heads and senior staff from the Governor’s Office.  Commissioner Richard Mills, Deputy Commissioner Theresa Savo, and I are serving on the Cabinet.  In addition, the New York State Board of Regents is committed to ensuring that the federal dollars being allocated to education reach eligible recipients as quickly as possible to support critical projects, and prevent job loss.

While many details are still being determined, the U.S. Department of Education (USDE) has posted tables showing preliminary State allocations for USDE programs under the ARRA on their Web site at:


Please be advised that the USDE notes that the allocations are preliminary estimates based on available data and are subject to adjustments. Among other things, the availability of new data or allocations to additional local educational agencies may result in changes to preliminary estimates.

In addition, a summary of highlights of what the ARRA contains specific to education is provided below.

State Stabilization: Pre-Kindergarten – 16

  • $39.7 billion in state stabilization funds are being targeted to help avert Pre-Kindergarten-12 and higher education reductions. Funds will be given to states in exchange for a commitment to education reforms.  School systems have discretion to use some of this money for school modernization.
  • An additional $8.8 billion in state stabilization funds are available for other state services including education.  School modernization is an eligible use of this funding.

Pre-Kindergarten- Grade 12 Education

  • Title I. $13 billion for Title I school improvement programs;
  • IDEA. $12.2 billion for Individuals with Disabilities Education Act (IDEA) programs;
  • Incentive Grants. $5 billion in incentive grants to be distributed on a competitive basis to states that most aggressively pursue higher standards, quality assessments, robust data systems and teacher quality initiatives.  This includes $650 million to fund school systems and non-profits with strong track records of improving student achievement;
  • Early Childhood Education. $5 billion for Early Childhood, including Head Start, early Head Start, child care block grants, and programs for infants with disabilities (includes Department of Health and Human Services programs);
  • Renovation, Repairs, and Construction. Authority for states and school systems to issue $24.8 billion in bonds over the next ten years for renovation, repairs and school construction that will be retired through a combination of local, state and federal dollars;
  • Cafeteria Equipment Modernization.  Approximately $5.3 million will be available from the Department of Agriculture in the form of competitive grants for school cafeteria equipment.  Priority is to be given to schools where at least half of the students are eligible for free or reduced meals. 
  • Other Investments. $2 billion for other education investments, including pay for performance, data systems, teacher quality investments, technology grants, vocational rehabilitation, work study and Impact Aid.

Higher Education

  • Pell Grants. ARRA provides $17.1 billion nationwide to eliminate the shortfall in the Pell grant account and to increase the Pell grant, when combined with mandatory funding, from cost of attendance up to a maximum of $4,850 to cost of attendance up to a maximum of $5,350 in the 2009-10 academic year and $5,550 in 2010-11.
  • College Work-Study.  ARRA provides $200 million for the College Work-Study program, nationwide, to be provided by the U.S. Education Department directly to participating higher education institutions according to the existing formula.
  • Funds for SUNY and CUNY, including community colleges.  Of the funding available to states for education restoration, in addition to restoring State aid to public schools to the level of State fiscal year 2007-08, ARRA funds are also to be used to restore State support for SUNY and CUNY, including community colleges, to the higher of fiscal year 2007-08 or 2008-09.
  • Teacher Quality Partnership Grants (HEA II A).  ARRA provides $100 million, nationwide, “to raise student achievement and improve learning by bringing about fundamental change and improvement in teacher preparation programs.  Grant activities focus on increasing teachers' academic content preparation; integrating research-based teaching methods into the education curriculum; providing sustained pre-service clinical or field experiences; and creating opportunities for professional development activities that improve content knowledge and strengthen teaching skills.” Funds will be awarded by the U.SFebruary 6, 2014higher education institutions.
  • American Opportunity Tax Credit.  For the 2009 and 2010 tax years, ARRA replaces the existing Hope tax credit and tuition deductionFebruary 6, 2014percent of the first $2,000 of tuition and related expenses (including books) paid during the tax year.  Forty percent of the credit is refundable to low-income families incurring such expenditures.  The credit phases out for single taxpayers with adjusted gross incomes in excess of $80,000 and couples with adjusted gross incomes in excess of $160,000.

Public Libraries and Library Systems

  • Broadband Technology Opportunities Program. ARRA provides $200 million for competitive grants for expanding public computer center capacity, including at community colleges and public libraries.  In addition ARRA also provides $250 million for competitive grants for innovative programs to encourage sustainable adoption of broadband service.

The list above provides highlights of the ARRA that are specific to education based on information available at this time.  The list is not an exhaustive list and additional details will continue to be shared with you as they become available.  For example, an additional $19.1 billion has been allocated to various programs administered by the National Institutes of Health and the National Science Foundation to support research, instrumentation, and facilities. Also, the New York State Department of Labor (NYSDOL) estimates that funding will be available through the ARRA to support Workforce Investment Act contracts by state labor departments with institutions of higher education.  We expect that additional details will be forthcoming from NYSDOL. 

The USDE’s Web site - http://www.ed.gov/policy/gen/leg/recovery/ - provides  additional information on the ARRA including a press release, a detailed fact sheet, and links to budget information, including the state-by-state allocations for formula-based programs, as well as a brief “video statement” from Secretary Duncan. In addition, the recovery Web site at http://www.recovery.gov is now live.  The site explains the ARRA; shows how, when and where ARRA money is spent; and provides data to allow citizens to evaluate the act’s progress and provide feedback.  Preliminary projections, based on ARRA language, of the effect on jobs state-by-state are also available on the site.

The State Education Department will be taking a number of actions over the next few weeks to ensure that we communicate information with you regarding ARRA resources expeditiously. Specifically we will:

  • hold teleconferences to be responsive to your local questions;
  • establish a dedicated Web page to share new information as soon as it becomes available (the url will be sent under separate cover);
  • provide a technical assistance hotline; and
  • continue to share communications with you by e-mail to provide you with the latest news and updates.

Thank you for the leadership you are providing to your schools and districts and colleges and universities in this challenging fiscal environment.  We look forward to working with you to help you continue the important work you are doing to provide a quality education to your students, to preserve jobs, and to help stimulate the economy.

Last Updated: March 15, 2010