What Does the American Rescue Plan Mean for Education in Kentucky? – Prichard Committee for Academic Excellence
Prichard Committee for Academic Excellence

What Does the American Rescue Plan Mean for Education in Kentucky?

The Kentucky General Assembly concluded the 2021 session last week which included passage of the revised state budget – a spending plan still impacted by the uncertainties of the Covid-19 pandemic on the state’s financial resources, as well as what the ultimate effect will be of the $1.9 trillion American Rescue Plan passed by Congress in March

This begs the question – what does the American Rescue Plan (ARP) mean for Kentucky? Broadly, the state is expected to receive an estimated $2.4 billion from the ARP’s State Fiscal Recovery Fund.  This large pot of money can be used for a broad set of purposes including infrastructure necessary for Kentucky’s future success – like broadband (for which the General Assembly already dedicated $250 million).  Additional funds from the ARP will be distributed to cities and counties directly from the Local Fiscal Recovery Fund.  Kentucky counties are estimated to receive $1.15 billion with Kentucky cities receiving $751.5 million.

What about Education Specifically?

Kentucky has already received considerable support for education from federal stimulus packages Congress enacted last year.  With the inclusion of the ARP funds, these are record amounts for federal funding to education.  Table 1 provides an overview of major education investments in the three main federal stimulus packages. These investments – at their best – provide an opportunity not just to return to pre-pandemic status quo, but rather to envision a better system of supports for students, families and educators into the future.

Select Education-Related Funding from Major COVID-19 Federal Stimulus Packages - KENTUCKY

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act, 2020)

The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA Act, 2020)

The American Rescue Plan (ARP, 2021)

Child Care Development Block Grant and Stabilization Support

K-12 Education - Elementary & Secondary Emergency Relief Funds

Postsecondary Education - Higher Education Emergency Relief Funds

Education General - Governors Emergency Education Relief Funds


The ARP funds can be used through 2024, providing significant opportunity for Kentucky to leverage these investments to best support families, students and teachers. Breaking down the American Rescue Plan in more detail further paints the picture of opportunity these funds represent.

Child Care

The ARP included two pots of funds for child care totaling $39 billion of which Kentucky is to receive approximately $764 million.

  • $15 billion will provide expanded child care assistance for families and essential workers through the Child Care Development Block Grant (CCDBG). Kentucky will receive approximately $293.9 million from this fund.
  • $24 billion will be for a child care stabilization fund to support eligible child care providers with an array of expenses including personnel, rent, maintenance, COVID-19-related supplies, costs associated with reopening, as well as supports for children and educators. Kentucky will receive approximately $470.1 million from this fund.

K-12 Education

The ARP included $122.8 billion in total for public schools in the Elementary and Secondary School Emergency Relief Fund (ESSER) of which Kentucky will receive approximately $2.1 billion.

The vast majority of these funds will be distributed to local school districts after specific set-asides for targeted investments are made at the state-level.  The estimated allocations for each area in Kentucky are as follows:

Funding Category

State's Funding

Minimum Grants to Local School Districts (90% of total)


Minimum - Learning Recovery Grants (5% of total)


Summer Enrichment (1% of total)


After-School Programs (1% of total)


Administrative Costs (Up to half of 1% of total)


Remaining State Funding (2.5% of total)



Of the nearly $1.9 billion above that is reserved for grants to local school districts, 20% must be used by districts to address learning loss – totaling $375.2 million.  The rest of local district funding can be used flexibly to make strategic investments to support students and teachers.  Examples include accelerating student learning with extended school years, summer programs, tutoring and other wraparound supports; safely reopening schools and upgrades to school facilities for healthy learning environments; and supporting the educator workforce and teacher pipeline.

Postsecondary Education

The ARP included $36 billion in total for colleges and universities in the Higher Education Emergency Relief Fund (HEERF) of which Kentucky will receive approximately $454.2 million to support public, private non-profit, and proprietary colleges and universities.  The American Council on Education has made institution-level estimates for this fund which you can search here.

The funding in the HEERF must be used by institutions for specific purposes, including significant amounts for student grants as follows:

  • 50% for students grants (100% at proprietary schools)
    • These grants can be used for cost of attendance and any emergency costs such as food, housing, health care, and child care.
  • Institutions can use remaining funds to further support students financially or defray costs associated with lost revenue, technology expenses, faculty and staff training, payroll, and COVID-19 related expenses.

Other Critical Funding – Broadband

The American Rescue Plan included $7.2 billion for the Emergency Connectivity Fund to support the Federal Communications Commission’s E-Rate Program.  These funds will expand on existing efforts for schools and libraries to provide broadband service, not only in their physical location, but also “off-campus” in the community where students and families live.  State-level estimates for this fund are not yet available.

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