United States Department of Education to the Honorable Pedro Pierluisi, Governor of Puerto Rico (October 5, 2023)

Summary

A letter dated October 5, 2023 from the Office of Elementary and Secondary Education, United States Department of Education, to Governor Pedro Pierluisi and Acting Secretary of Education Yanira Raíces Vega of Puerto Rico. It responds to the September 1, 2021, request from the Puerto Rico Department of Education for a waiver of maintenance of effort requirements in the CARES Act, the CRRSA Act and the ARP Act. The letter states that, under section 2004(a)(2) of the ARP Act, the Department approves the request to waive those requirements for elementary and secondary education in FYs 2022 and 2023 and for higher education in FYs 2020, 2021, 2022, and 2023. It also states that the State has not yet complied with maintenance of equity requirements for 85 high-poverty schools.

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                            UNITED STATES DEPARTMENT OF EDUCATION
                                 OFFICE OF ELEMENTARY AND SECONDARY EDUCATION




                                                   October 5, 2023

The Honorable Pedro Pierluisi
Governor of Puerto Rico
P.O. Box 9020082
San Juan, PR 00902

Dr. Yanira Raíces Vega
Acting Secretary of Education
Puerto Rico Department of Education
P.O. Box 190759
San Juan, PR 00919

Dear Governor Pierluisi and Acting Secretary Raíces Vega:

I am writing in response to the September 1, 2021, request from the Puerto Rico Department of
Education (PRDE) to the U.S. Department of Education (Department) for a waiver of the
maintenance of effort (MOE) requirements in section 18008(a) of the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act); section 317(a) of the Coronavirus Response and
Relief Supplemental Appropriations Act, 2021 (CRRSA Act); and section 2004(a)(1) of the
American Rescue Plan Act of 2021 (ARP Act) with respect to elementary and secondary
education and higher education.

As a condition of receiving CARES Act, CRRSA Act, and ARP Act pandemic relief funds under
the Education Stabilization Fund, Puerto Rico assured it would maintain effort for both
elementary and secondary education and higher education in each of fiscal years (FYs) 2020,
2021, 2022, and 2023. More specifically, section 18008(a) of the CARES Act requires a State
that receives Elementary and Secondary School Emergency Relief funds (ESSER I) and
Governor’s Emergency Education Relief funds (GEER I) for FYs 2020 and 2021 to: 1) maintain
State support for elementary and secondary education at least at the levels of such support that is
the average of the State’s support for elementary and secondary education provided over FYs
2017, 2018, and 2019; and 2) maintain State support for higher education at least at the levels of
such support that is the average of the State’s support for higher education provided over FYs
2017, 2018, and 2019. Section 317(a) of the CRRSA Act requires that for FY 2022, a State that
receives ESSER II, GEER II, and Emergency Assistance to Non-Public Schools (EANS) funds
to: 1) maintain State support for elementary and secondary education at least at the proportional
level of the State’s support for elementary and secondary education relative to the State’s overall
spending, averaged over FYs 2017, 2018, and 2019; and 2) maintain State support for higher

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   The Department of Education’s mission is to promote student achievement and preparation for global competitiveness by
                               fostering educational excellence and ensuring equal access.
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education at least at the proportional level of the State’s support for higher education relative to
the State’s overall spending, averaged over FYs 2017, 2018, and 2019. This same MOE
requirement applies in FYs 2022 and 2023 for a State that receives ARP ESSER funds, and
Section 2004(a)(2) of the ARP Act allows the Department to grant a waiver of the MOE
requirement “for the purpose of relieving fiscal burdens incurred by States in preventing,
preparing for, and responding to the coronavirus.”

Based on PRDE’s submission, the State failed to meet MOE requirements for elementary and
secondary education by approximately 7.47 percentage points ($2.7 billion) in FY 2022, and
3.62 percentage points ($1.2 billion) in FY 2023 compared with the baseline years. The State
failed to meet MOE requirements for higher education by approximately $180 million in FY
2020, $190 million in FY 2021, 4.19 percentage points ($1.4 billion) in FY 2022, and 2.45
percentage points ($766 million) in FY 2023 compared with the baseline years. Based on data
provided by PRDE, a waiver of the elementary and secondary education requirements in FYs
2020 and 2021 is unnecessary because Puerto Rico demonstrated compliance on a per-pupil
spending basis. Under the authority of section 2004(a)(2) of the ARP Act, I am approving Puerto
Rico’s request to waive the MOE requirements in section 18008(a) of the CARES Act, section
317(a) of the CRRSA Act, and section 2004(a)(1) of the ARP Act with respect to State support
for elementary and secondary education in FYs 2022 and 2023 and for higher education in FYs
2020, 2021, 2022, and 2023 to relieve fiscal burdens incurred by the State.

The Department’s approach to MOE waiver requests is rooted in consideration of the impact on
students. In reviewing Puerto Rico’s request, the Department considered all information and data
included, as well as the totality of the circumstances such as multiple fiscal burdens. After
accumulating over $50 billion in unfunded pension liability and over $70 billion in debt,
Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act
(PROMESA) in 2016 to restructure Puerto Rico’s debt burden. In 2017, the Oversight Board
implementing PROMESA developed a fiscal plan that imposed spending cuts across all sectors,
including both elementary and secondary education and higher education, and required spending
on debt restructuring. Puerto Rico’s Financial Oversight and Management Board indicated that
the decreases in higher education spending in FYs 2020 and 2021 were caused by funding cuts
imposed by the Oversight Board. Decreased proportional spending on both higher education and
elementary and secondary education in FYs 2022 and 2023 were driven by dramatically
increased State spending ($24.7 billion in FY 2022 and $181 million in FY 2023) on payments
made to debt holders as part of Puerto Rico’s ongoing debt settlement process. In addition,
Puerto Rico incurred significant costs in responding to extreme natural disasters (Hurricanes
Irma and Maria in 2017, earthquakes in 2019 and 2020, and Hurricane Fiona in 2022)—
responses that were exacerbated by the COVID-19 pandemic.

Despite these fiscal burdens, Puerto Rico made increased investments in both elementary and
secondary education as well as higher education. Specifically, Puerto Rico increased State
support for elementary and secondary education and higher education on a per-pupil basis in FYs
2022 and 2023 compared to the baseline years. These investments are relevant given the
Department’s interest in a State’s commitment to education spending as outlined in the Guidance
on Maintenance of Effort Requirements and Waiver Requests under the Elementary and
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Secondary School Emergency Relief (ESSER) Fund and the Governor’s Emergency Education
Relief (GEER) Fund.

Considering the totality of the circumstances, including the State’s ongoing commitment to
support elementary and secondary education and higher education on a per-pupil basis, as well as
the State’s demonstration of fiscal burdens incurred in responding to the coronavirus pandemic,
the Department determined that approval of the waiver relative to FY 2020, 2021, 2022, and
2023 MOE requirements is appropriate.

Finally, this waiver for FY 2022 MOE requirements is distinct from any determination the
Department may make concerning Puerto Rico’s compliance with FY 2022 maintenance of
equity requirements under the ARP Act (§ 2004(b)). Based on data provided by PRDE, the State
has not yet complied with these requirements for 85 high-poverty schools. Puerto Rico must
make supplemental payments to these schools, each of which experienced disproportionate per-
pupil funding or staffing in FY 2022. Please advise the Department when these additional
payments have been made.

Thank you for your ongoing commitment to education. If you have any questions, please contact
the Puerto Rico Mailbox at: PuertoRico.OESE@ed.gov.

                                                 Sincerely,
aura Jimenez
                                                 Laura Jimenez

                                                 Laura Jimenez
                                                 Director
                                                 Office of State and Grantee Relations


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