The Education Stabilization Fund

Where the money went

The fund came in three acts: the CARES Act in March 2020, the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) in December 2020 and the American Rescue Plan in March 2021 (CRS R47027). The K-12 money went to states and on to school districts, largely by formula; most of the college money went straight to institutions.

• ESSER, the Elementary and Secondary School Emergency Relief Fund: $13.2 billion from the CARES Act, $54.3 billion from CRRSA and $122.8 billion from the American Rescue Plan. States had to pass at least 90 percent of it to school districts.
• HEERF, the Higher Education Emergency Relief Fund: $76.2 billion for colleges, cut to $75.5 billion by later rescissions. At least 90 percent of each act's HEERF money went as direct grants to institutions.
• GEER, the Governor's Emergency Education Relief Fund: $7.0 billion, of which CRRSA reserved $2.75 billion for EANS. Governors could pass the rest, about $4.3 billion, to school districts, colleges or other education-related entities, for purposes as broad as child care and protecting education jobs.
• EANS, Emergency Assistance to Non-Public Schools: $2.75 billion carved from CRRSA's GEER money and $2.75 billion appropriated by the American Rescue Plan, for services to private schools.
• The remaining $1.4 billion went to the outlying areas, the Bureau of Indian Education and, from the CARES Act, competitive grants for the states with the "highest coronavirus burden."

The biggest single district award, across the three ESSER rounds, went to New York City's schools: $7.55 billion. The Department of Education of Puerto Rico came next with $4.42 billion, then Los Angeles Unified with $4.21 billion. The grantee reports name 17,464 districts in all (ESSER districts). On the college side, 4,941 institutions reported $75.5 billion in HEERF awards; Arizona State University reported the largest, $373.9 million (HEERF institutions).

How fast it was spent

Slowly at first. By the end of the 2023 reporting year, states reported spending $117.0 billion of the $189.5 billion in ESSER allocated to them (the $190.3 billion less $800 million the American Rescue Plan set aside for homeless students), 61.8 percent. For the American Rescue Plan round the figure was 46.9 percent (ESSER districts).

The Department's monthly summary, built from USAspending, shows the rest arriving. In the Department's September 3, 2026 summary, $186.9 billion of $189.5 billion in obligated ESSER money had been drawn, 98.7 percent. Maryland was furthest behind at 92.1 percent, then Puerto Rico at 92.9 (national pace).

The deadline, and the March 2025 reversal

Each round had a date by which states had to commit the money, including a one-year grace period in federal education law. For CARES funds it was September 30, 2022; for CRRSA, September 30, 2023; for the American Rescue Plan, September 30, 2024. States then had 120 days to pay the bills. Using forms the Department posted, a state could ask for up to 14 more months. According to Department data given to CRS, 164 extension requests had been approved by February 28, 2025, covering $4.8 billion, and 47 states had at least one (CRS IF12978).

On March 28, 2025, Secretary Linda McMahon wrote to state education chiefs that the extensions for CRRSA and American Rescue Plan money would end that day at 5:00 p.m. ET. "Extending deadlines for COVID-related grants, which are in fact taxpayer funds, years after the COVID pandemic ended is not consistent with the Department's priorities," the letter said; states could still ask for extensions project by project (the March 28 letter). Based on USAspending data from March 18, 2025, CRS counted $2.8 billion in American Rescue Plan ESSER money not yet spent, including $477.3 million in Puerto Rico (CRS IF12978).

On April 10, 2025, 15 states, the District of Columbia and Pennsylvania's governor, Josh Shapiro, sued. Their complaint said the change "triggered chaos" and left "a massive, unexpected funding gap" (the complaint). The court in the Southern District of New York entered a preliminary injunction for the plaintiffs on May 6. The Department then set a May 25 deadline for them, and the court enjoined that on June 3; the Second Circuit refused to stay the second injunction on June 20. On June 26 the Department returned every state, plaintiff or not, to the process it used before March 28, citing "fairness and uniformity problems" while the case continues (the June 26 letter).

What the money bought

School districts reported spending nearly $60 billion in ESSER money through the 2021–22 school year. About 80 percent went to students' academic, social and emotional needs and to keeping schools running; most districts GAO visited added instructional time. The remaining 20 percent went to health: cleaning supplies, ventilation and school psychologists (GAO-24-106913).

Whether it raised achievement is harder to measure. Using test data from 28 states, a CALDER working paper by Dan Goldhaber and Grace Falken estimated the effect of ESSER spending in 2022–23. Each $1,000 more per pupil raised district math scores by 0.007 standard deviations; the effect on reading was not statistically significant. By the authors' estimate, American Rescue Plan ESSER money accounted for about 18 percent of that year's math recovery and 12 percent of the recovery in reading (CALDER Working Paper 301-0325-2).

For colleges, the grantee reports show where the money went year by year. In the 2021 reports, 4,632 institutions spent $39.2 billion, and $19.4 billion of it went to students as emergency grants. In the 2022 reports the student grants came to $7.9 billion of $19.1 billion (HEERF institutions). The reports do not measure what the grants did for the students who got them.

Christmas trees, ineligible schools, wasted tests

Oklahoma's governor received $39.9 million in GEER money and gave $18 million of it to a state office that paid ClassWallet, a financial services company, to run two programs for families. The Education Department's Office of Inspector General (OIG) tested the Bridge the Gap purchases. Of $6,126,614 that parents spent, $652,720, or 11 percent, went on items that "did not appear to be education-related, such as televisions, air conditioners, and Christmas trees." ClassWallet passed the application work to a subcontractor, Facts Management. Oklahoma told the OIG that any deficiencies were wholly attributable to ClassWallet. The OIG answered that the state, as the grant recipient, had to ensure the money was used properly, and that Oklahoma had not used the pre-approval of purchases option ClassWallet offered (ED OIG A20GA0011). A 2025 OIG survey counted the states using digital wallets: 12 of the 45 state agencies that answered used them. One vendor, which the report does not name, worked for 11 of those 12 and handled more than 95 percent of the money involved (ED OIG F25CA0219).

Wisconsin gave over $20 million in American Rescue Plan EANS services to 184 private schools that did not meet the program's eligibility rules, the OIG found in 2025 (ED OIG A24NY0195). Puerto Rico's Department of Education paid a contractor $3.9 million in American Rescue Plan ESSER money for student assessments that were given late or not at all; the OIG called the money wasted (ED OIG I25GA0233). For HEERF, the OIG found that the Office of Postsecondary Education had no monitoring framework, no risk assessment of the program and no risk-based monitoring plan. The office said the finding did not sufficiently recognize the challenges it faced (ED OIG A20CA0029).

Fraud cases are counted across all K-12 programs, not ESF alone. From fiscal 2020 through 2025 the OIG reported 130 K-12 fraud investigations with $70,880,184 in monetary results. One example it gives: a former fiscal services director of the Magnolia School District in California was sentenced to prison in 2025 for embezzling more than $16.4 million from the district, which received ESSER funds (ED OIG Fraud in Focus).

Three court fights

The first fight was over private schools. A July 1, 2020 Department rule set how much CARES money districts had to share with them; it was challenged in four federal district courts, and on September 4, 2020 the court in NAACP v. DeVos (D.D.C., No. 1:20-cv-01996) vacated it. The Department did not appeal (CRS R47027). Washington v. DeVos (W.D. Wash., No. 2:20-cv-1119) and Michigan v. DeVos (N.D. Cal., No. 3:20-cv-4478) had already produced preliminary injunctions.

The second was over which college students could get CARES emergency grants. The Department limited them to students eligible for federal student aid, which excluded undocumented students, among others. Courts in a separate Washington v. DeVos (E.D. Wash., No. 2:20-cv-00182) and in Oakley v. DeVos (N.D. Cal., No. 4:20-cv-03215) blocked some or all of the limits at the colleges before them. A final rule effective May 14, 2021 opened eligibility to anyone enrolled on or after March 13, 2020, undocumented students included (CRS R47027).

The third is New York v. U.S. Department of Education (S.D.N.Y., No. 1:25-cv-02990), over the 2025 liquidation deadline, described above.

Who ran it and who was paid

The OIG addressed its 2025 digital-wallet report to Hayley Sanon, acting Assistant Secretary for Elementary and Secondary Education (ED OIG F25CA0219), and its 2022 HEERF audit to Michelle Asha Cooper, who held the delegated duties of the Assistant Secretary for Postsecondary Education (ED OIG A20CA0029). Secretary Betsy DeVos was the named defendant in the 2020 cases; Secretary Linda McMahon signed the 2025 deadline letters and is the named defendant in the states' suit (the complaint).

After Arizona State University, the largest HEERF awards went to Miami Dade College, $357.6 million, and the Trustees of Indiana University, $330.6 million (HEERF institutions).

Lessons the auditors drew

GAO looked at the American Rescue Plan's maintenance-of-equity rules, which generally barred states and districts from cutting funds disproportionately from districts or schools serving many low-income students. Education officials told GAO they "developed and refined this guidance in real time"; as a result, GAO found, the Department wrote no internal procedures for its staff, and data reliability problems kept GAO from determining whether states paid the right districts (GAO-26-107727). The HEERF office agreed in part with the OIG and said it would write guidance with key steps for staff running emergency programs in the future (ED OIG A20CA0029).

Start reading

1. CRS Report R47027, Education Stabilization Fund Programs Funded by the CARES Act, CRRSAA, and ARPA (January 2023)The structure: every program, every act, the formulas and the dollar amounts.
2. CRS Report R48186, Education Stabilization Fund: Expenditures for Elementary and Secondary Education (September 16, 2024)What states had spent of the K-12 money by August 2024.
3. CRS In Focus IF12978, Late Liquidation Period for Elementary and Secondary Education Funds Provided During COVID-19 Pandemic (April 29, 2025)The obligation and liquidation deadlines, and the March 2025 reversal.
4. Secretary of Education, letter to state chiefs modifying the ESF liquidation period (March 28, 2025)The letter that ended the extensions.
5. Complaint, New York v. U.S. Department of Education, No. 1:25-cv-02990 (S.D.N.Y. April 10, 2025)The states' case against it.
6. Secretary of Education, Dear Colleague letter on ESF liquidation (June 26, 2025)The Department's return to the old process, with the court dates.
7. ED OIG, Oklahoma's Administration of Governor's Emergency Education Relief Fund Grant, A20GA0011 (July 18, 2022)GEER money, a digital wallet and the Christmas trees.
8. GAO-24-106913, K-12 Education: School Districts Reported Spending Initial COVID Relief Funds (September 2024)What districts bought in the first two years.
9. Education Stabilization Fund spending filesThe Department's grantee reports and monthly summaries, as tables.