American Rescue Plan

On Wednesday, March 10, Congress passed President Biden’s stimulus and COVID-19 relief package, the American Rescue Plan. The $1.9 trillion package provides additional funding for vaccination efforts, COVID-19 testing, state and local governments, stimulus checks, unemployment assistance, rental assistance, education, child care, and small businesses.

Notably, the final bill is not the same bill that originally passed the House of Representatives on February 27. Because the Senate used the budget reconciliation process in order to pass the measure without Republican support, the Senate parliamentarian ruled that some provisions included in the House-passed version of the American Rescue Plan were not permissible under the Byrd Rule. (The Byrd Rule was adopted by the Senate in 1985 to protect the original intent of the budget reconciliation process and to exclude extraneous provisions. Read more from our team on the Byrd Rule here.) Some of the provisions that were excluded from the final version of the bill as a result of the Byrd Rule include a $15 minimum wage increase and several transportation related provisions. In addition to these exclusions, Senate Democrats made numerous other changes to the bill, such as decreasing the income threshold to receive a stimulus check, decreasing unemployment benefits from $400 per week to $300 per week, and decreasing the appropriation to the Education Stabilization Fund. For a summary of all the modifications the Senate made to the House bill, please see here.

The Senate passed their version of the bill on Saturday, March 6. The House voted and approved the Senate’s version on March 10. President Biden is expected to sign the measure quickly to ensure there is not a lapse in unemployment benefits, which are currently set to expire March 14. Below is a summary of key provisions in the American Rescue Plan.


The legislation includes $165 billion for the Education Stabilization Fund. The Elementary and Secondary School Emergency Relief Fund (ESSER) will receive $122.7 billion for K-12 education. Of this funding, $800 million is set aside for the Secretary of Education to provide services and assistance to homeless youth. The remaining $121.9 billion will go to the state education agencies (SEAs) based off the Title I-A formula under the Elementary and Secondary Education Act (ESEA). SEAs must award at least 90 percent of the funds to local education agencies (LEAs) based off the same formula. LEAs can use the funding to help schools reopen safely, including repairing ventilations systems, reducing class size to ensure social distancing, and purchasing PPE, among other things. The legislation also requires that 20 percent of the funding that Local Education Agencies (LEAs) receive must be used to address learning loss.

The legislation also requires the SEAs to reserve a portion of their funding for specific purposes. For example, SEAs must use at least five percent of their funding to address learning loss. Additionally, at least one percent must be used for evidenced-based summer enrichment programs, and another one percent must be used for “evidence-based comprehensive” after school programs.

The Higher Education Emergency Relief (HEER) fund will receive $39.6 billion to support higher education.  Institutions of higher education must use at least half of the funding for emergency financial aid grants for students.

Finally, the Emergency Assistance to Non-Public Schools (EANS) fund, which was originally authorized by the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), will receive $2.75 billion under the American Rescue Plan. While this program was originally under the Governor’s Emergency Education Relief (GEER) Fund in the CRRSAA, it is important to note that the American Rescue Plan does not include appropriations for the GEER fund.

The funds for all of the programs in the Education Stabilization Fund will remain available through September 30, 2023. For additional information on the Education Stabilization Fund and estimated allocations, please see here.


The American Rescue plan invests $7 billion to expand broadband via the Federal Communications Commission’s (FCC) E-rate program. Additionally, $10 billion of the $350 billion for state and local governments must be set aside for infrastructure projects, such as broadband infrastructure.

Other Key Provisions

  • $350 billion to state and local governments
  • $7 billion for the Paycheck Protection Program (deadline to apply was not extended passed the current date of March 31)
  • $15 billion for Targeted Economic Injury Disaster Loans (EIDL)
  • $14 billion for vaccine distribution
  • $1,400 stimulus checks to Americans making less than $75,000
  • $300 weekly federal unemployment benefits through September 6
  • $12 billion for nutrition programs, like SNAP, WIG, and Pandemic EBT
  • $45 billion for rental and utility assistance
  • $15 billion in Child Care and Development Block Grant (CCDBG) Program through September 30, 2021
  • $3.5 billion for the Substance Abuse and Mental Health Services Agency (SAMHSA) for the Substance Abuse Prevention and Treatment and the Community Mental Health Block Grant programs

Federal Agency Nominations

On Tuesday, March 2, Dr. Miguel Cardona was sworn in as the Secretary of Education. The Senate confirmed Dr. Cardona on March 1 with a vote of 64-33. Fourteen Republican Senators, including Ranking Member of the Senate Health, Education, Labor, and Pensions Committee Richard Burr (R-NC) and Minority Leader Mitch McConnell (R-KY), voted to confirm Dr. Cardona.

Dr. Cardona, who previously served as the Connecticut Commissioner of Education, gained national attention for being a proponent of keeping schools open during the pandemic and will continue to make reopening schools a priority as Secretary of Education. At his swearing in ceremony, Cardona said he plans to convene a “national summit on safe school reopening” in March.

In February, President Biden named another notable nominee to the Department of Education. James Kvaal is Biden’s pick to serve as undersecretary of education. Kvaal served in the Obama administration, focusing on higher education policy. Kvaal also served in the Clinton administration. Kvaal must be confirmed by the Senate.

How States Are Addressing Learning Loss

Nearly one year after schools across the nation shut down in response to the coronavirus pandemic, policymakers and educators are looking at how to address one of the most consequential educational impacts of the pandemic: learning loss. According to a study published by McKinsey & Company, the average student is “likely to lose five to nine months of learning by the end of this school year,” with students of color being more acutely impacted. In response, policymakers at both the federal and state levels are taking action.

President Biden’s American Rescue Plan requires state education agencies (SEAs) and local education agencies (LEAs) to use a portion of their relief funding to address learning loss. Furthermore, more than 15 states have introduced legislation that attempts to mitigate or remedy learning loss. For example, in California SB 723 has been introduced in the attempt to establish a tutoring program that will reduce learning loss. In addition to tutoring programs, decision-makers across the country are looking at summer school and extending the school year to address learning loss. MWC has compiled a chart of how all 50 states are planning to address learning loss (either through legislation or other actions). This is an evolving issue as the federal money set aside for learning loss will help bolster the states’ ability to address learning loss, and MWC will update this chart as necessary.

Read more on education policy in McGuireWoods Consulting’s Education Policy Update.