Economic Stimulus Learning Center

State Fiscal Stabilization Fund — Education Stabilization Fund

State Fiscal Stabilization Fund—Education Stabilization Fund

Public institutions of higher education are among the beneficiaries of funding in the stimulus act through what’s called the State Fiscal Stabilization Fund. About four-fifths of the $44 billion total is designed to help states restore their education budgets for fiscal 2009, 2010 and 2011 to the levels of fiscal 2008 or 2009, whichever was higher. Funds are allocated to each state based on the size of its overall population and its population between the ages of 5 and 24.

In addition to supporting pre-K and K-12 schools through the standard state funding programs, the stimulus law calls for governors to develop a formula to share some of the funding with public institutions of higher education.

Governors can choose to restrict the use of funds to expenditures that would lessen the need for increases in tuition and fees paid by in-state students. However, they can also permit the funds to be used for the modernization, renovation or repair of instructional and research facilities and student housing, including repairs that are consistent with a recognized green-building rating system. According to the department, this includes work related to:

  • Electrical systems
  • Heating
  • Ventilation or air-conditioning systems, and
  • Upgrading facilities to support new programs or services, among other things

The department has strongly encouraged recipients to use the funds for repairs that are consistent with a recognized green-building rating.

Funds cannot be used for:

  • “Maintenance of systems, equipment or facilities”
  • Modernization and repair of stadiums, other athletic facilities or performing arts venues
  • Facilities used for sectarian instruction, religious worship or that are subsumed in a religious mission
  • Increasing an institution’s endowment.

In addition, the funds cannot be used for new construction.

Your state may have provided additional information about its plans for distributing these funds. Click here to check a map that will help you find your state’s recovery act site.