On March 28, Secretary McMahon informed chief state school officers that ESSER is done. The Secretary reconsidered and then denied the late liquidation granted by the Biden administration, effective the same day at 5 p.m. ET.

What’s the key takeaway?

From a practical standpoint, the letter should not have significant fiscal implications. COVID funding was a flash point in the elections, and the administration took action on “unjustified” spending as promised—but it kept the door open for some justified spending extensions.

According to the letter: “You [state and local agencies] were entitled to the full award only if you liquidated all financial obligations within 120 days of the end of the period of performance. You failed to do so. Any reliance on a discretionary extension subject to reconsideration by the agency was unreasonable.”

Let’s put the letter in context:
  • Seven states received extensions for about $1.3 billion of ARP ESSER funding, about 1% of the $122 billion.
  • Typical liquidation ran through January 2025. School officials have had two months of “late liquidation,” so $1.3 billion is probably now in the hundreds of millions—or less if school officials read the room.
  • The letter still allows for late liquidation if the project’s extension is necessary to mitigate the effects of COVID on American students’ education” and officials make a clear case for the extension.
  • The letter should surprise nobody. Many believe that too much education stimulus funding went out the door too fast, and that the administration would take action. At this stage, it will likely have little impact on most schools and districts.

State and local school officials, however, should read the letter as an invitation to tell better stories and be prepared to bring the receipts. The Trump administration is concerned about the worthwhile use of taxpayer funds, but D.C. cannot see that level of detail. That information has to come from local and state leaders, and it has to be clear, compelling—and frequent. Now is a good time for that.