Published on June 16, 2023 and updated on November 9, 2023

How the Debt Ceiling Deal Could Impact Future Federal Education Funding

The U.S. Congress passed, and President Biden signed legislation to avoid defaulting on the U.S. government’s loans. Congress nearly failed to raise the debt limit, which is the amount of money the government can borrow. The U.S. actually reached the debt limit in March; however, the U.S. Treasury had been doing some fiscal juggling to avoid defaulting on the U.S. debt. If the U.S. were to have defaulted on its debt (not pay its bills), it could have had a devastating impact on both the U.S. and the world economy.

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Background

In March of 2021, the U.S Congress passed the American Rescue Plan (ARP) Act, providing an additional $122 billion in Elementary and Secondary School Emergency Relief (ESSER) funding. This funding, coupled with the CARES Act (passed March 2020) and CRRSA Act (passed December 2020) ESSER funds brings the total ESSER funding to about $190 billion to help education agencies at the state and local level address the educational impact of the COVID-19 pandemic.  

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