Millions remain unspent in federal funds for homeless students — and time is running out

Santino Bono remembers the reaction from a Missouri school district official when he learned about thousands of dollars of funding available for the district’s students who were experiencing homelessness.

“He basically said, ‘We have an extra $12,000 that we can just use for virtually whatever we want, as long as it pertains to benefiting our homeless students?’ He was just kind of in shock. You could tell he was kind of speechless,” Bono said.

During his work with state Rep. Deb Lavender of St. Louis this year, Bono and a group of fellow legislative interns were tasked with connecting schools with a largely overlooked bucket of American Rescue Plan Act money earmarked to help homeless students get to and stay in school.

School districts can spend the funds on a number of services, including transportation, food and clothes. The money can also be used to find and identify homeless students who need the services. School districts have just over two months to act.

“(School districts) can help a family in crisis to stay in a motel for a short time, they can provide food, car repairs, some kinds of direct assistance to families that are situational,” said Tera Bock, the Missouri Department of Education and Secondary Education’s homeless education director.

Lavender has been monitoring the ARPA money since it was allocated in 2021. With millions to spend before the end of September, the St. Louis Democrat assigned Bono and fellow intern Alanna Nguyen to inform school districts of the availability of the funds.

“If we have money, it should be spent, and there's an awful lot of need for those dollars.” Lavender said.

Missouri received $12.8 million from the American Rescue Plan’s Homeless Children and Youth fund . Hundreds of state school districts are eligible for the funding, and – as the interns learned – many of them didn’t even know it exists.

The problem isn’t unique to Missouri. Many states still have millions to spend before September, when any unspent money will return to the U.S. Treasury .

Slow to spend

The ARP-HCY funding amounts to a total of $800 million for schools around the country.

According to the U.S. Department of Education, roughly $382 million remained unallocated as of early July. That means the money hasn’t even reached the school district level.

To date, about $416 million has been disbursed to school districts in the states. As of July 1, 18 states had spent less than 50% of the funds available, and four had allocated less than 30%.

According to the Department of Education’s July report, Missouri had disbursed 35% of the money allocated to the state’s schools by early July. Bock said the state has disbursed more since the report came out and is working to distribute the remaining funds.

In Iowa and Kansas, education officials have distributed around 57% of the roughly $5 million the states each received. Nebraska has disbursed roughly 28% of the available funding — or $1 million of the $3.5 million provided by the federal law for that state.

In states where the rescue plan tranches are largest — like Texas, New York and Florida — more than half of the funding has yet to be budgeted, according to federal data. Meanwhile, other states with large tranches — like Illinois and California — have budgeted nearly 70% of their funds.

In Virginia and Maryland, where there was $7.1 million and $5.4 million left to budget respectively, nothing has been allocated to school districts since May, according to federal data.

States can apply for extensions if school districts put forward plans for the funding. Without those spending plans, the ARP-HCY funds will go back to the Treasury.

‘An incredible loss'

At least one advocate for homeless students is not confident states will be able to apportion the roughly $382 million left of ARP-HCY funds by September.

“It's essentially an incredible loss for families and for youth who really need this help to get support and go to school, which is ultimately their best shot out of homelessness in the long term,” said Barbara Duffield, executive director of the nonprofit SchoolHouse Connection.

SchoolHouse Connection works with education providers and state homeless student liaisons to help identify and support unhoused students in receiving an education equal to that of their peers, as guaranteed by the federal McKinney-Vento Act.

“For the previous three years, states and school districts — and really even the Federal Department of Education — have prioritized the much larger part of pandemic relief funding and haven’t focused on these funds,” Duffield said.

The ARP-HCY funds are separate from Elementary and Secondary School Emergency Relief funds , but both come from American Rescue Plan Funding. ESSER funds cover a wide range of programs, while ARP-HCY funds were made available for the sole purpose of aiding homeless youth.

Duffield said schools have the freedom to use ARP-HCY funds as they deem fit, as long as funded services support homeless students.

Bock said Missouri's distribution of ARP-HCY money lagged while her current position sat empty for a portion of the time the funds were available. After the education department hired her, she quickly began working with Bono and Nguyen to connect school districts with their funding.

But challenges remain. Bock said school districts’ lack familiarity with rescue plan funding — or any funding at all for homeless students — has proven to be a stumbling block.

Duffield said that’s the case for many school districts nationwide.

“School superintendents and finance officers are not familiar with the issue of children and youth experiencing homelessness — and not necessarily aware of how they could use the flexibility (of the funds) to do things differently,” Duffield said.

Bock said some school districts also are wary of using the money.

“It is one-time funding. It's not going to be replaced, and the LEAs (local education agencies) and the schools know that,” Bock said. “They have to think of ways both to use the funds to help their current students and have some kind of sustainable impact while not creating a financial burden that they can't support in the future.”

In its February report “ Overlooked and Almost Out of Time ,” SchoolHouse Connection noted:

“School district homeless liaisons report many positive impacts of ARP-HCY funds, including increased school stability, identification, and attendance. Liaisons who reported they received ARP-HCY funds were nearly twice as likely to report an increase in student homelessness due in part to better outreach and more staffing capacity.”

In the same report, SchoolHouse Connection noted the number of families in homeless shelters and visibly unsheltered increased by 16% in 2023, while the number of unaccompanied youth in homeless shelters and visibly unsheltered increased by 15%.

At the same time, Duffield said school districts across the country regularly fail to identify and help homeless youth eligible for aid under McKinney-Vento.

Under that law, school districts must provide homeless youth with access to the same education as other children as well as additional services like transportation to and from school. The law further requires schools to enroll homeless children even if they lack normally required documents, such as immunization records or proof of residence.

However, a 2022 Center for Public Integrity analysis of federal education data showed roughly 300,000 children and youth entitled to McKinney-Vento aid in the U.S. went unidentified by the school districts mandated to help them.

“This is a hidden population,” Duffield said. “If you don't have the actual support for the things in your life outside of school, the chances of getting an education are diminished significantly.”

No extension

U.S. Sens. Lisa Murkowski of Alaska, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona pushed for an amendment to the fiscal 2024 federal budget that would have extended the spending deadline for ARP-HCY funds by one year.

In a letter to the Senate Appropriations Committee, the senators argued state and local educational agencies lacked proper guidance on the “flexible use” of the funds to aid homeless students until September 2023, more than three years after their original appropriation.

“With the obligation deadline looming just months from now, schools are running out of time to thoughtfully and effectively use ARP-HCY funds, despite unprecedented homelessness,” the senators wrote. “ARP-HCY funds have been transformative in the lives of children, youth, and families that have experienced homelessness, reaching more than twice as many school districts compared to annual homeless education funding.”

The proposed deadline extension died in March in the face of what SchoolHouse Connection called “fierce opposition from some lawmakers to any provision related to pandemic aid.”

In May, the Missouri Independent highlighted the work of Bono and the other Lavender interns, noting that many of the school districts they reached out to had never received federal funding to support homeless students in the past.

“It was fulfilling, but also concerning, to an extent — knowing well, at least we’re making a difference, but also we need to kind of kick this into gear a little bit,” Bono said.

This story comes from the Midwest Newsroom, an investigative journalism collaboration that includes Iowa Public Radio , KCUR , Nebraska Public Media , St. Louis Public Radio and NPR .

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