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April 1, 2009

Dear Governor:

Congress passed and the President signed the American  Recovery and Reinvestment Act (ARRA) to create jobs in the short run and make needed  investments for the long term.  And no  investment is more important than education.   As the President said recently, “Economic progress and educational  achievement have always gone hand in hand in America.”  That is why this sweeping economic recovery  package provides the largest one-time Federal investment in education in our  nation’s history, more than $100 billion to help save and create teaching jobs,  preserve needed learning programs, and increase college access.  At the same time, the ARRA lays a foundation  to reform America’s schools, invest in proven solutions to help our students  succeed, and cultivate a new culture of accountability for teaching and  learning.

Under the law, the Department of Education (ED) is quickly  providing your state with a large infusion of one-time funds to be spent over  the next two years on everything from early childhood to college, including  programs for children with disabilities, low-income students, and adults  working to upgrade their skills for the 21st century.  In exchange for this unprecedented funding  boost, we are asking you to collect, publish, analyze, and act on some basic  information about how our schools educate our children, evaluate our teachers,  and measure our success – information that will reveal both strengths and  underlying challenges.  By identifying  what works and does not work in the classroom, we will promote a shared  responsibility for improving educational opportunities and outcomes that  engages all of the key stakeholders – students, parents, teachers, principals,  administrators, community leaders, business leaders, and elected officials at  every level.  This is the only path to  progress in our schools.

The ARRA provides funds across many categories (Title I,  IDEA, Pell Grants, etc.).  This letter,  however, focuses only on the State Fiscal Stabilization Fund (Stabilization Fund  or SFSF), which provides approximately $48.6 billion directly to governors to  help you balance your state budget.   While the Stabilization Fund will help relieve our immediate economic  crisis, it is also intended to boost student achievement, so to access this  money, we seek your commitment to the following four essential areas of reform:

- **Making improvements in teacher       effectiveness and ensuring that all schools have highly qualified       teachers;**

- **Making progress toward college and       career-ready standards and rigorous assessments that will improve both       teaching and learning;**

- **Improving  achievement in low-performing schools, by providing intensive support and  effective interventions in schools that need them the most;**

- **Gathering  information to improve student learning, teacher performance, and college and  career-readiness through enhanced data systems that track progress.**

Taken together, these four commitments will help ensure  outstanding teachers in America’s schools, arm educators with the tools and  data needed to determine what does and doesn’t work in our nation’s classrooms,  align curricula and assessments with rigorous standards that prepare young  people for college and careers, and transform our lowest-performing schools.  Information on the Stabilization Fund  application process is provided below.   Detailed program guidance is posted on the ed.gov and recovery.gov Web sites.

| | Sincerely, 
| | -----------
| | /s/        
| | Arne Duncan

Enclosure

cc:  Chief State School Officer

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Enclosure

**PROGRAM COMPONENTS/DISTRIBUTION FORMULA**

Under the Stabilization Fund program, the U.S. Department of  Education (ED) will award grants to governors on the basis of each state’s  relative shares of individuals aged five to 24 and of total population.  This formula grant program has two distinct  portions – the Education Stabilization Fund and the Government Services  Fund.  By statute, we will award 81.8  percent of each state’s total SFSF allocation under the Education Stabilization  Fund (CFDA No. 84.394) and the remaining 18.2 percent under the Government  Services Fund (CFDA No. 84.397).

The Education Stabilization Fund helps restore state support  for public elementary, secondary, and postsecondary education, and, as  applicable, early childhood education programs and services.  The Government Services Fund supports other  government services; states are free to direct this funding to public safety,  health care, social services or, if they so choose, education.  Both funds also may be used to support  school modernization.

ED will award stabilization funds in two phases.  In phase one, ED will provide 67 percent of  a state’s total Stabilization allocation (i.e., 67 percent of both its  Education Stabilization Fund allocation and its Government Services Fund allocation)  within two weeks of receipt of an approvable application.  ED has developed a streamlined phase one  application requiring very limited information.  Appendix A of the application package contains a chart that  provides the amount of each state’s total Stabilization allocation, with a  breakdown of the total amounts to be awarded under both the Education  Stabilization Fund and the Government Services Fund.

Although the biggest budget struggles concern fiscal year  2010, some states may need additional resources immediately.  If your state can show in its initial  application that phase one Stabilization funds are insufficient to prevent  substantial immediate layoffs or service reductions in school districts, public  institutions of higher education, or state or local agencies, ED can award up  to 90 percent of total Stabilization dollars in phase one.  The remaining portion of the state's  allocation will be provided after ED approves the phase two submission.

In the near future, ED will publish a notice detailing the  proposed phase two application process for public comment in the *Federal  Register*.  The notice will describe  specific data metrics that states would use to make transparent their status in  the four education reform areas outlined above, including a description of the  levels to which the data needs to be aggregated and/or reported (e.g., by  school, by local educational agency,  by state).  The notice will also  describe the plan that states would need to provide for gathering data  including those elements not currently available and the criteria by which the  plan would be evaluated.  Publishing  these data serves two essential purposes: showing how schools are performing  and helping schools improve.

Recognizing that the notice will provide further detail and  an opportunity to comment, we are providing an overview below of the specific  metrics that have been developed and are in process of being published for  comment in the *Federal Register:*

- **Teacher  effectiveness and ensuring that all schools have highly qualified teachers** – A state would report on the extent to which all students have access to  qualified and effective teachers and whether or not teachers are evaluated  based on how well their students perform. More specifically, a state would  report:
- *the number and percent of teachers in the  highest-poverty and lowest-poverty schools in the state who are highly  qualified;*
- *the number and percent of teachers and principals  rated at each performance level in each local educational agency’s (LEA’s)  teacher evaluation system; and*
- *the number and percent of LEA teacher and principal  evaluation systems that require evidence of student achievement outcomes.*

- **Higher standards  and rigorous assessments that will improve both teaching and learning** – A  state would report the extent to which public information is available  regarding student performance compared to other states, the extent to which all  students are fully included in state assessment and accountability systems and  are provided high-quality assessments, and how many high school seniors  continue on to pursue a college education or technical training.  To this end, states would report:
- *the  most recent state reading and mathematics NAEP scores on 2009-10 State Report  Cards;*
- *whether the state is taking  steps to enhance the quality of state academic assessments, including whether  the state is engaged in activities consistent with section 6112(a) of the ESEA  to*
- *(1) work in  collaboration or consortia with other states or organizations to improve the quality,  validity, and reliability of state academic assessments;*
- *(2) measure student  academic achievement using multiple measures of academic achievement from  multiple sources;*
- *(3) chart student  progress over time; and*
- *(4) evaluate student  academic achievement using comprehensive instruments, such as performance and  technology-based assessments;*
- *whether the state has  developed and implemented valid and reliable assessments for students with  disabilities and the percent of  students with disabilities tested on state mathematics and English Language  Arts (ELA) assessments;*
- *whether the state has  developed and implemented valid and reliable assessment for English language  learners and the percent of English  language learners tested on state mathematics and ELA assessments; and*
- *the number and percentage of students by school who  graduate high school and go on to complete at least one year’s worth of college  credit (as applicable to a degree) within two years.*

- **Intensive  support, effective interventions, and improved achievement in schools that need  it the most** – A state would identify schools most in need of academic  intervention, and report on the progress of those schools in implementing  reforms to improve student academic achievement.  More specifically, a state would report:
- *the number of schools in restructuring status that  have demonstrated substantial gains in student achievement, closed, or  consolidated within last three years;*
- *of the schools in restructuring status, the number  of schools in the bottom five percent that have demonstrated substantial gains  in student achievement, closed or consolidated within the last three years;*
- *the number and percent of schools in restructuring  status that have made progress on state assessments in mathematics and ELA in  last year; and*
- *whether the state  allows charter schools and whether there is a cap restricting the number of  such schools, the number of  charter schools currently operating in the state, and the number of charter  schools closed within the last three years for academic purposes.*

- **Better information to educators and the  public, to address the individual needs of students and improve teacher  performance** – A state would  report on the extent to which it has implemented a system to provide  greater clarity to parents about the quality of their child’s education.  This  system will enable educators to use  real time information about the individual needs of students, move away from a  one-size-fits-all approach to education, and improve their performance.   In particular, a state would report:
- *progress towards implementing a statewide  data system which includes each of the 12 elements described in the America  COMPETES Act, to track progress of individual students, from preschool through  postsecondary education, and match students to individual teachers; and*
- *whether all teachers in mathematics and ELA  in tested grades receive timely data on the performance of their students and  estimates of individual teacher impact on student achievement, in a manner that  informs instruction and includes appropriate benchmarks.*

As noted above, while it is our expectation that states can  and should make progress on each of the proposed metrics above, states are not  required to demonstrate progress in order to get phase two Stabilization funds.  We are only asking states to ensure that  states have in place systems to report on final metrics that are developed  through rulemaking so that parents, teachers, and policymakers have clear and  consistent information about where our schools and students stand.

For each metric, a state would need to demonstrate that it  collects the required data, and that it will make the data easily accessible to  the public.  While establishing the  systems and processes to report these metrics will have costs, states have  received and will continue to receive substantial funds with which to help  defray these costs (e.g., Statewide Data Systems, Grants for State Assessments,  administration portion of all formula grants).   If a state cannot report the final developed metrics, it would submit a  plan detailing how it would report this information by September 30, 2011.  The plan would include:

- a description of any issues currently preventing the state  from collecting and/or reporting the data;
- a description and timeline of its plan for developing a system  to collect and report the data;
- a timeline for implementing the plan;
- the sources of funds the state would use to carry out its  plan; and
- its process for disseminating the data.

President Obama has made clear  that every dollar spent under the ARRA will be subject to the most stringent  standards of accountability and transparency.  A government-wide Recovery  Accountability and Transparency Board will coordinate and conduct oversight of  program funds to prevent fraud, waste, and abuse.  The Board will maintain a public Web site – www.recovery.gov – that will monitor the  progress of the economic recovery and the use of funds under the Act.  ED will post all state applications for  Stabilization funding on this Web site.

States and other entities must  maintain records that track separately the funds received under each grant  award and report quarterly on both financial information and on program  outcomes and results.  In addition, for  each year of the Stabilization program, states must report to ED on, among  other things: (1) the use of funds provided under the program; (2) the  estimated number of jobs created or saved with program funds; (3) estimated tax  increases that were averted as a result of program funds; and (4) standing with  respect to fulfilling the application assurances described above.