School funding cuts could be severe under sequestration.

As Congress nears a deadline to form a compromise and avoid sequestration, education stakeholders are hoping to avoid devastating school funding cuts that could put an end to some promising practices across the country.

A recent Alliance for Excellent Education (AEE) webinar explored where some federal education policies stand, what President Obama’s second term holds for teachers and students, and what could happen if sequestration occurs.

President Obama’s education reform plans

In his State of the Union address, President Obama spoke of a pipeline approach to education reform, including the need for preschool education, revamping high schools, and examining college affordability and value for students.

Data show that for every $1 invested in early childhood and preschool education, governments save $7 down the road, said Phillip Lovell, AEE’s vice president of federal advocacy. That focus on education extends all the way to post-secondary schooling, and the president is “really trying to lower the cost of higher education. … By 2018, two-thirds of all jobs will require some type of post-secondary education. The president has really emphasized higher education since he’s been in office,” Lovell said.

The president also hopes to link institutions of higher education and businesses with high schools to prepare high school students for 21st-century jobs, so that students are ready to enter high-growth STEM fields.

Lovell said it is “thrilling” to see Obama call for a pipeline approach from preschool education up through college and beyond.

Stakeholders are hoping to find more education policy details in Obama’s federal budget proposal, which will be released soon and might include increases to state or local programs, Investing In Innovation, or Race to the Top, said Jessica Cardichon, AEE’s director of federal policy.

And by emphasizing high schools, Obama “acknowledges that [education] reform at the elementary level looks different than at the high school level, and we need to acknowledge that in our policy,” she said.

(Next page: School funding cuts and their impact on education initiatives; where NCLB reauthorization stands)

School funding

In terms of state budget cuts:

  • Twenty-six states are providing less funding-per-student to local school districts now than they provided a year ago.
  • Thirty-five states are providing less funding-per-student than they did five years ago.

While federal budget cuts through sequestration could be severe, they sit on top of state cuts to school funding—making the effects even more devastating for students.

Sequestration really began in 2011 with the debt ceiling debate. Part of the compromise that raised the debt ceiling mandated deficit reduction, and a congressional Super Committee was set up to accomplish that deficit reduction. In January, Congress passed the American Tax Payer Relief Act that kept in place the Bush-era tax cuts for those making less than $400,000 a year, but the law only delayed sequestration for two months. Now, sequestration is set to go into effect at the beginning of March if Congress cannot pass new legislation forestalling the cuts.

Sequestration would result in mandatory, across-the-board cuts to federal programs if Congress is unable to pass legislation to reduce the deficit by more than $1 trillion.

In the current fiscal year, sequestration would amount to the largest cut the U.S. Department of Education has ever seen in a single year—5.9 percent, or roughly $2.9 billion. Pell Grants are exempt from the cuts at first, but the rest of the department is at risk—and policy experts note that at-risk students who rely on services from programs such as Title I, the Individuals with Disabilities Education Act, and Head Start will be most affected.

U.S. Education Secretary Arne Duncan recently described how sequestration would impact education. Cuts to Title I would affect 2,700 schools, more than 1 million students, and put 10,000 jobs at risk, he said. While the cuts would most directly affect the 2013-14 school year for most programs, others would be cut right away, and the degree to which education suffers would play out differently depending on how much federal funding states and local districts receive.

Three groups that would feel a huge impact are schools for which federal revenue is 15 percent or more of their total budget; those receiving Impact Aid, such as Tribal and Indian Land and military districts; and poorer districts that are funded less from state and local revenues than wealthier districts, and thus depend more on federal aid, Cardichon said.

“If sequestration does happen, the cuts will be so devastating that we might enter another recession,” said Fred Jones, AEE’s legislative associate.

NCLB waivers and reauthorization

The federal Education Department has implemented No Child Left Behind waivers in 34 states under a “flexibility policy,” because the nation’s federal education law is long overdue for a reauthorization.

Many states are moving past NCLB’s focus on test scores and are using advanced course enrollment, graduation rates, remediation and dropout rates, and other indicators to paint a picture of what is going on in schools.

Cardichon noted that while there is a difference between using these methods to see what’s happening in the nation’s schools versus using them for accountability purposes, stakeholders are nonetheless pleased to see college- and career-ready indicators in the mix.

One concern with NCLB waivers, Jones added, is the use of graduation rates for accountability purposes, and the fear that waivers might work against states’ progress in that area.

While both the Senate and House education committees have many new members, there does seem to be bipartisan support when it comes to updating and reauthorizing NCLB. Cardichon said that promising practices developed by states now could work to inform a reauthorized bill that would not force forward-thinking states to move backwards, to more outdated policies, once passed.