In February President Barack Obama signed into law the $787 billion American Recovery and Reinvestment Act (ARRA) known also as the economic stimulus package.
The plan will channel $115 billion into education, more than doubling the current budget of the Department of Education.
Overall, the law will provide $80 billion for schools, $20 billion for student financial aid and other higher education support. The law also includes $15 billion in tax credits for college tuition. The influx of funding is for two years only and state officials are encouraged not to invest in programs which are unsustainable.

States which accept funding from the ARRA must commit to four reforms:



  • Increase teacher effectiveness and ensure an equitable distribution of qualified teachers;


  • Progress towards the implementation of college- and career- ready standards and high-quality (this has opened up the debate on national standards – see below);


  • Turn around the lowest-performing schools;


  • Develop and use of pre-K through post-secondary data systems.

The package also includes a $5 billion incentive fund to reward states and districts that make significant gains in student achievement. Known as the "Race to the Top," states applying for these competitive grants must demonstrate that they have implemented aggressive and creative reforms in closing achievement gaps, raising academic standards, tracking student progress, and improving the distribution of high-quality teachers.