U.S. Senate Passes $2 Trillion Dollar Federal Stimulus – Including Over $30 Billion for Education Stabilization Fund
On Wednesday of this week, the U.S. Senate passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The emergency relief measure provides approximately $2 trillion dollars in federal stimulus to support individuals, businesses, as well as state and local governments weather the COVID-19 crisis.
Major provisions include:
- Expanded unemployment insurance including a $600 per week increase in benefits for up to four months and federal funding of benefits provided to those not usually eligible, such as the self-employed, independent contractors, and those with limited work history.
- $350 billion allocated for Small Business Assistance to help small businesses make payroll and cover other expenses. Small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if certain conditions are met.
- Rebates to individual taxpayers. The bill would provide a $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers). Taxpayers with children will receive an additional $500 for each child. The rebate phases out at $75,000 for singles, $112,500 for heads of household, and $150,000 for joint taxpayers. It phases out entirely at $99,000 for single taxpayers with no children and $198,000 for joint taxpayers with no children.
Support for Education
The stimulus package also includes a $30.75 billion Education Stabilization Fund to assists state education agencies, school districts, and postsecondary institutions. This fund includes:
- $13.5 billion for K-12 education is available for formula-grants to States, which will then distribute 90 percent of funds to local educational agencies to use for coronavirus-response activities, such as planning for and coordinating during long-term school closures; purchasing educational technology to support online learning for all students served by the local educational agency; and additional activities authorized by federal elementary and secondary education laws.
- $3 billion for Governors to allocate at their discretion for emergency support grants to local educational agencies that the State educational agency deems have been most significantly impacted by coronavirus. These funds will support the ability of such local educational agencies to continue to provide educational services to their students and to support the on-going operations of the local educational agency; and provide emergency support through grants to institutions of higher education serving students within the State.
- $14.250 billion for higher education for emergency relief for institutions of higher education to prevent, prepare for, and respond to coronavirus. Funds may be used to defray expenses for institutions of higher education, such as lost revenue, technology costs associated with a transition to distance education, and grants to students for food, housing, course materials, technology, health care, and child care.
- $3.5 billion for the Child Care Development Block Grant to support child care programs to maintain critical operations, including meeting emergency staffing needs and ensuring first responders and health care workers can access child care while they respond to the pandemic.
- $750 million for Head Start to meet emergency staffing needs.
Exact allocations to each state under these education provisions are not yet available, but we will watch closely and post that information as we can.