Public schools across the United States are preparing for a significant financial reckoning in 2025 as federal pandemic relief funds come to an end. Together, the Elementary and Secondary School Emergency Relief funds pumped billions of federal dollars directly into school districts to weather COVID-19 pandemic-related disruptions. These dollars ran out in September 2024. It has left many local school districts in the lurch during this ongoing pandemic, facing fiscal crises and the prospect of imminent layoffs.
Our data from the Georgetown Edunomics Lab illustrate just how dire things have become. Director Marguerite Roza noted that expiration of these funds would endanger approximately 250,000 education jobs. That possible loss is a mind-boggling $24 billion in labor expenses. We know that the financial landscape is getting more complicated. Student enrollment in public schools has decreased every year since the start of the COVID-19 pandemic in 2020.
California, for one, has experienced a dramatic decline in enrollment. Much of this is due to lower birth rates and more people moving out of the state than moving in. As their enrollment numbers dwindle many districts are left with more staff than students falling into an unsustainable fiscal death spiral. Since most state funding for schools is based on how many students districts have enrolled, this often puts districts in a bind.
School administrators are extremely alarmed by the prospect of these cuts. Mike Fine, a spokesperson for education administrators, noted the impact in emotional and professional terms that potential layoffs would have on educators.
“Let me say this on behalf of all educators and all education administration folks: None of us got into this work to lay off teachers and counselors and librarians and nurses and aides and bus drivers,” – Mike Fine.
Given these factors, Roza warned districts against doing anything permanent, like hiring new teachers. She warned them to be ready to deal with the consequences of these decisions.
“The dollars are limited, and we have to live within the bounds of the financial support that we have,” – Mike Fine.
Roza stressed the immediate need for action. She cautioned that if the upcoming Congress doesn’t do some serious financial planning, the education sector could face dire straits as soon as 2025.
“We actually warned school districts in advance, be careful about this money,” – Marguerite Roza.
Roza further underscored the urgency of the situation, stating that without prudent financial planning, the education sector could face dire consequences come 2025.
“Because if you take on recurring commitments, financial commitments, you’re going to really find that in 2025, we will be calling it the bloodletting,” – Marguerite Roza.
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