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Federal Judge Blocks DoEd Rule Favoring More CARES Act Funding for Private Schools

August 24, 2020 by Sara Wilkerson
Betsy DeVos, secretary of education, speaks during the Wall Street Journal CFO Network conference in Washington, D.C. on Tuesday, June 11, 2019. (Alex Edelman/Zuma Press/TNS)

SEATTLE – A federal judge ruled last week in favor of Seattle Attorney General Bob Ferguson’s request to block a Department of Education rule that required school districts to either share a larger percentage of federal funding with private schools or limit federal funding to certain public schools within their precinct. 

According to a press release from the Washington State Attorney General’s office, the federal judge’s ruling blocks the Department of Education’s rule nationwide. 

In her ruling granting Ferguson’s motion to block the Education Department’s rule, Judge Barbara J. Rothstein called the administration’s arguments “remarkably callous, and blind to the realities of this extraordinary pandemic and the very purpose of the CARES Act: to provide emergency relief where it is most needed.” 

The DoEd’s rule, issued in early July, stated that school districts had two options when it came to distributing their share of the $13.5 billion CARES Act relief fund. 

The first option, the total enrollment option, required school districts to disburse funds based on the total enrollment of students in their public and private schools, regardless of the income levels of students’ families. The second option, the poverty-based option, limits funding to schools in the Title I program, a federal program aimed specifically at aiding schools with higher percentages of poverty-stricken students. 

The new rule from the Department of Education is a departure from how it normally distributes funding to school districts. 

Upon the DoEd’s issuance of its rule for schools nationwide, Washington state and five other states jointly filed suit against the department on the grounds that the rule diverts well-needed funding for public schools to private schools less in need of federal funding. 

On July 20, Ferguson filed suit arguing against the rule’s legality, and on July 23, asked the U.S District Court for the Western District of Washington to block the department’s rule as his joint state suit continues. Last week’s ruling applies to Ferguson’s July 23 request. 

The CARES Act, when originally enacted, distributed past funding based on the federal government’s Title I formula, thereby prioritizing funding for districts with lower income students. Under federal law, school districts are required to share federal funds with private schools based on how many lower-income students are enrolled at private schools. The CARES Act does not require schools to be a part of the Title I program to receive funding. 

According to Ferguson, the rule overall demands school districts make a choice. Either they must limit funds only to those under the Title I program, thereby denying funding for those most in need of aid. Or choose funding based on enrollment populations, thus giving more money than necessary to private schools. 

For the Education Department’s total enrollment option, Ferguson claims it diverts more funding for Washington private schools than originally intended by the CARES Act. 

Under the traditional Title I formula used for the CARES Act, Seattle’s schools would normally share 3.4% of funding with private schools. Under the new rule, schools have to share nearly 20% of federal funding with private schools. 

“Betsy DeVos has continued to try to hijack much-needed CARES Act relief funds to satisfy her own political agenda,” Ferguson said in a public statement. “Congress explicitly provided this money to help the most vulnerable students, who have been hit hardest by this pandemic. I won’t allow her to unlawfully funnel these funds to private schools.” 

Ferguson pointed out that private schools have fewer enrolled lower-income students than those of their public-school counterparts. 

Additionally, Ferguson said in his July 20 lawsuit private schools have more opportunities for funding than public schools in terms of the endowments private schools receive, as well as their ability to apply for loans from the Payback Protection Program under the Families First Coronavirus Response Act. Meanwhile, public schools are not afforded these funding opportunities, which is why Congress created the CARES Act. 

With the poverty-based option of the rule, funding would only be allocated to Title I schools, making non-Title I schools ineligible for funding. 

According to a declaration from Jolynne Berge, the chief financial officer of Seattle Public Schools, most Seattle public schools are not Title I schools, despite the high number of lower-income enrolled students in public schools. 

To put the rule’s second option into perspective, Berge says, “This [action] excludes 73 schools and 42,635 students from relief authorized by Congress under the CARES Act, thus harming their students, families, and teachers.” 

Berge continued, “In our district, 10 schools are eligible to receive Title I funding but opt not to do so. Consequently, 3,788 low-income students—who are most in need of relief—will be excluded from funding under this formula.” 

Ultimately, Judge Rothstein’s ruling protects the provisions of the CARES Act, allowing school districts across the country to determine for themselves on how their share of federal funding will be allocated, regardless if they are or are not a part of the Title I program. 

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