U.S. Offers More Guidance on State Stimulus Funds

April 2, 2009

The U.S. Education Department on Wednesday published detailed guidance about the tens of billions of dollars it is making available to states to restore funds cut from their elementary, secondary and higher education programs. The department distributed the guidance -- as well as applications for states to submit to qualify for the funds -- as Education Secretary Arne Duncan announced that it was releasing $44 billion of the more than $100 billion in funds Congress appropriated to the department to distribute to help save jobs and stimulate the economy. Among the clarifications offered by the department are several that relate to which funds may and may not be counted as state support to public colleges in calculating how much the states must restore to make the institutions whole. For instance, the department notes that "state funding for financial assistance to students attending public [institutions of higher education] is not considered state support for these institutions." It further says that states have "some flexibility" in determining what should be included; "[f]or example, a state may consider state appropriations for public higher education that are obtained from general tax revenues, as well as funds that are obtained from other sources (e.g., tobacco settlement funds and lotteries). ... A state may also include interest or earnings received from State endowments pledged to public IHEs. ... [A] state may also include such support as: (1) State appropriations for community colleges to support adult education and career and technical education programs; and (2) State payments that are made on behalf of employees of public IHEs but that are appropriated to a different State agency (e.g., group insurance contributions that the State appropriates to a central State agency, and State contributions to [institution of higher education] employee retirement systems that the State appropriates to the State agency responsible for administering retirement systems)."

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