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  • Writer's pictureBell Wilkins

School Finance in 2021: A Year Like No Other in Review

As 2022 approaches, we’ve compiled the biggest moments in K12 finance from the last 12 months. Think there’s something we missed? Leave a comment below!



With President Biden taking the reins after a tumultuous election season, all eyes were on the new administration as they addressed one of their top priorities: reopening schools for in-person learning.

Individual states began taking a closer look at the state of their budgets and enrollment after ten months of disruption. The two ESSER (Elementary and Secondary School Emergency Relief) packages passed as part of the CARES and CRRSA Acts in 2020 deployed billions of dollars in federal relief to state and local education agencies. (For more information on these acts, check out our past blog post on the subject!) Districts started spending these funds on everything from new technology to additional staff members.


As school districts began planning for the new fiscal year, it became clear that enrollment would be a significant challenge regarding funding stability. States fund districts as a function of how many students they serve, so facing a surge of parents choosing homeschool, private school, or holding back from kindergarten, administrators from Texas to Minnesota braced themselves for potential cuts to their budgets. Parents around the country began making decisions about sending kids to in-person school, with some moving to new cities and/or pursuing non-traditional schooling models (e.g., learning pods).


Fortunately, Congress stepped up in a big way towards the end of March by passing the American Rescue Plan (ARP), a $1.9 Trillion (!) plan releasing $129 billion in COVID relief aid for K12 education. The feds mandated 22 of those billions go towards mitigating “learning loss”, but the law gave broad latitude to states and districts to use the rest how they saw fit. The plan increased aid for districts serving more low-income students (including private schools) and established two discrete funds specifically to help low-income students and homeless students.

States were given until 2024 to spend the money, meaning the per-pupil breakdown of the aid amounted to about $600 per student per year. For this reason, many advocates said the aid was insufficient despite the eye-popping number of 0s.


As schools deployed their relief funds to begin safely reopening, expand their access to technology, and boost instructional capacity, President Biden called upon lawmakers to increase federal Title I grants for students from low-income families. Meanwhile, the US Department of Agriculture extended its reimbursement options for school lunches through the end of the 2021-2022 school year — a crucial lifeline for families concerned about chronic hunger.


As debates surrounding Critical Race Theory swept the nation and the FDA approved COVID vaccines for adolescents 12-15, the Biden administration unveiled their $6 trillion budget— one that made good on their repeated demands for more equitable school finance. Among other proposals, the bill attempted to:

· Incentivize districts to "address longstanding funding disparities" between high- and low-poverty districts

· Double the number of socio-emotional support staff in schools

· Increase funding for students with special needs by 20% and

· Increase federal grants for community schools (public schools that partner with students, parents, and community organizations to boost student outcomes) by 1000%. That is not a typo.

June and July:

As teachers and students caught their breath after an intense year, the newly-appointed Secretary of Education, Dr. Miguel Cardona, hit the road to promote the Biden administration's vision of equitable school finance. In large part, presidential budgets are a symbol of a party's priorities for the foreseeable future. Still, the $100B earmarked for improving public school infrastructure on top of other funds reinforced the new leadership's determination to invest in K12 education.


As the Delta variant swept across the nation, school doors reopened to districts determined to return to in-person learning. States were able to access more ARP funds as they provided their plans to the federal government, though more than one saw increasingly heated disagreements about blanket masking policies for students. Several districts across the country faced COVID outbreaks among staff and students, leading to shutdowns of classrooms, schools, and entire districts to provide time for quarantining.


States continued to deploy their funding on safety improvements, such as upgraded air filters and test protocols, as well as high-impact learning interventions like tutoring. Still, in a tight labor market, districts around the country found it difficult to staff these programs to full capacity; the jobs weren't attracting enough qualified talent. In Los Angeles Unified School District, the second-largest district in the nation, administrators couldn't even fill half the positions they recruited for.


In the wake of school board races and other special elections, much of the spotlight on K12 education focused on hot-button issues like mask mandates and Critical Race Theory. Still, as schools continued to make use of relief funds, many, including journalists, sought more transparency into where the money was flowing. Several expressed frustration that these political issues were detracting from the important work of getting students "back-on-track" after the disruption of the prior two school years.

November and December:

In a long-awaited announcement, the FDA began November by endorsing COVID vaccines for children ages 5-11. Weeks later, the Biden administration's social spending plan, Build Back Better, passed the House of Representatives. While the $2 trillion bill’s education components primarily tackle childcare and higher-ed access challenges, it also proposed a hefty sum to improve K12 infrastructure and nutrition services. At the time of this writing, it seems as though the bill is doomed in the Senate, so states should not count on another influx of funding as they prepare for Fiscal Year 2023. another influx of funding as they prepare for Fiscal Year 2023.


2021 has seen two presidents, multiple COVID variants, billions in K12 relief funding, and countless controversies surrounding the best way to serve students with federal aid. In such a rapidly changing environment, strong finance management will be vital in ensuring the best outcomes for students, and school leaders must work diligently to find the most effective, efficient, and equitable ways to serve their communities. At Edstruments, our powerful, user-friendly platform allows for closer collaboration, more precise modeling, and better budget management, all of which have helped our current partners make more effective and timely financial decisions this year. Interested in learning how? Email us at to learn more!

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