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State Budgets Poised to Bring More Money for K-12 in Coming Year

state budgets poised to bring more money for k 12 in coming year
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State budgets will not see the deep cuts that many feared at the height of the pandemic and are expected to funnel more money into school districts over the coming year, according to a new analysis.

New data from the National Association of State Budget Officers shows signs of improvement across state spending plans. While they generally haven’t rebounded to pre-pandemic projections, general fund spending is on track to increase by 3 percent this year, the data reveals. And governors in 39 states proposed increasing state spending in fiscal year 2022, which covers the coming academic year.

That’s good news for public schools, which rely heavily on state funding sources. NASBO figures project K-12 spending to increase nationally by $23.9 billion in fiscal 2022 — a counterbalance to the $7.4 billion cut in spending schools faced this year. 

And that doesn’t include the federal money directed to schools through the American Rescue Plan, the sweeping measure signed into law by President Biden in March, which channeled $122 million into K-12.

It’s a very different reality than the one school districts and governors were bracing for around this time last year, when revenues in 45 states fell and experts warned it could take years to dig out of coronavirus budget holes.

“Last spring, when the pandemic first hit and the economy was spiraling down, there was definitely a fear that the cuts would be a lot worse than we saw,” said Kathryn White, director of budget process studies for NASBO. “Generally, the outlook has been improving since those spring forecasts.”

Tax Bases Bounced Back

There are multiple reasons the more dire predictions didn’t come to pass, White said. For one, the federal stimulus money pumped into the economy ultimately boosted state coffers.

States also didn’t see severe drops in income taxes as many higher-income workers were less impacted by COVID-19 than expected, because many transitioned to working from home. And she said online shopping helped mitigate losses in sales tax revenue.

Overall, 38 states had their general fund collections for fiscal year 2021 come in higher than expected. That’s a completely flipped story from 2020, when 35 states had revenues fall short of their budget. 

States were also able to lean on their reserves. Prior to COVID-19, states’ rainy day funds were at an all-time high after a decade of rebuilding following the Great Recession, NASBO found. Balances were as high as 14 percent of states’ spending. After 2020, balances dropped 12.8 percent, and they’re expected to fall again in 2022. 

While the national picture is rosy, White said it’s important to note that some states were hit harder than others. 

For example, states with an especially strong tourism industry or a higher unemployment rate saw larger negative impacts on their budgets, according to the NASBO analysis. Those states were more likely to make budget cuts this year, and they’re planning more modest budgets for 2022.

That means the impact on K-12 spending will vary by state. And schools also will continue to cover additional costs caused by the pandemic, including extra safety precautions or increased support to address student academic stagnation during the pandemic. 

States will have to be careful with how they allocate one-time federal money and budget for the next few years to ensure long term stability, White said. 

“There’s just a lot of uncertainty about what the post-COVID economy will look like, how it will affect states,” White said. “And, of course, the Delta variant in the U.S. has tempered some activity in places, so that adds another layer of uncertainty.”

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New Institute Backed by National Science Foundation to Explore AI’s Role in Education

new institute backed by national science foundation to explore ais role in education
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A ed-tech nonprofit will join four universities in launching a new institute dedicated to creating artificial intelligence tools that can be applied to human learning and education.

The effort is meant to encourage the development of products for use in K-12, influence future AI products made for K-12, and is intended to improve upon past AI technologies that were difficult for teachers to use, said Jeremy Roschelle, executive director of learning sciences research for Digital Promise, the education nonprofit involved in the initiative.

“There’s an emphasis here on what people are calling classroom orchestration – how to help teachers organize for longer-term, more complex, collaborative, problem-solving things,” Roschelle said. “I think the classroom orchestration part, in particular, could be part of a big change in what products people emphasize in the market, and how they support teachers.”

A 5-year, $20 million grant from the National Science Foundation will support the AI Institute for Engaged Learning, Digital Promise said. Analysts, policymakers, and product developers from Digital Promise will join researchers from North Carolina State University, University of North Carolina, Indiana University, and Vanderbilt University, for the initiative.

The work of the institute will have three main goals:

  1. Created platforms will incorporate story-based problem scenarios fostering communication, teamwork, and creativity.
  2. Platforms will generate AI characters capable of communicating with students through speech, facial expression, gesture, gaze, and posture.
  3. The institute will build a framework that will customize educational scenarios and processes to help students learn, based on information collected from conversations, gaze, facial expressions, gestures, and postures of students as they interact with one another, teachers, and the technology itself.

Schools, museums, and outside nonprofits will work with the institute to ensure created tools are ethically designed and advance diversity, equity and inclusion, according to the announcement.

District officials, and advocates for the ethical use of technology, have raised repeated concerns about potential pitfalls in applying AI-powered technology in schools. One fear is that because AI systems are dependent on collecting large amounts of data and using algorithms to guide policy and classroom practice, they will end up reinforcing racial, gender or other stereotypes.

For example, could an AI-powered curriculum platform, or one that recommends academic interventions for students, end up directing more students of color into remedial coursework, because of biased algorithmic assumptions?  (See Education Week’s recent special report breaking down concerns about AI’s role in classrooms.)

Data Privacy in Focus

A November report by the Center for Integrative Research in Computing and Learning Sciences cites several concerns and considerations come into play when it comes to how AI technologies safeguard student privacy.

How will AI-recorded student conversations and emotional data be used? How long will information be saved? Will it be part of a student’s record? These are all questions that come into play when AI and children interact, the report notes.

AI detection of emotions, through facial expressions, is well-developed, though challenging from a privacy and ethical standpoint, and appropriate policies must still be determined to address these challenges, the report says.

“A very strong focus of this institute … is coming together to really think about how do we tackle some of these issues of privacy, security?” Roschelle said. “None of this is going to fly if people are terrified.”

If AI can be applied creatively and responsibly, it has the power to enrich lessons across subjects, Roschelle said.

He offered an example detailing how forthcoming AI tools might generate story-based situations that promote collaboration and creativity.

Imagine a science class planning a trip to Mars over a three-week period, he said. For the purposes of that trip, they would need to measure gravity, the strength of the Sun’s energy, and air moisture. They would have to plot out measurement devices that they need, the composition of student teams to observe measurements, and what vehicles to bring.

In this case, an effective AI system could “help them along the way whenever they get stuck,” Roschelle said, and “tune the story to the choices they make.”

Image by Getty

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Spending on Tech-Based Curriculum Jumps During the Pandemic, New Survey of IT Leaders Finds

spending on tech based curriculum jumps during the pandemic new survey of it leaders finds
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K-12 curriculum software and subscription spending grew at a higher rate than any other technology budget area for school districts last school year, as their IT budgets mostly increased from the previous school year.

In a survey of 170 district technology leaders by the Consortium for School Networking, 62 percent of participants reported their schools’ funding for curricular software/subscriptions rose between the 2019-2020 and 2020-2021 school years, with 56 percent also noting a spike in cybersecurity investment.

Another 56 percent of respondents said their district’s overall IT budget expanded, with 12 percent citing a “major” increase, according to a summary of the report.CoSNGraph

District technology leaders ranked cybersecurity as the top unmet technology need, followed by home access connectivity and interoperability.

“In a situation where even well-funded corporations in the private sector struggle to address cybersecurity issues, poorly funded districts are at a disadvantage,” CoSN said. “One respondent called the need for more cybersecurity funding as ‘desperate.’”

Cybersecurity has been a focus area for CoSN, which is one of several organizations that endorsed the Enhancing K-12 Cybersecurity Act. That bill would set a path for the federal government to guide best practices for K-12 cybersecurity and provide cybersecurity grants to schools that could benefit certain education companies.

Congressional lawmakers have not acted to advance the bill.

Big Investments in Hybrid Learning

In addition to greater curricular software and cybersecurity spending, the majority of those surveyed also noted new technology initiatives, with 64 percent saying that they added classroom technology to support simultaneous hybrid learning, such as rotating cameras, microphones and speakers; and 60 percent reporting that they now offer a remote-only instruction option.

Further, 37 percent of tech chiefs said they added “district-wide student-facing Cloud-based applications,” such as learning management systems, to their digital ecosystems, and 23 percent of districts gave devices or extra monitors to educators for home use.

Only 2 percent of participants reported not supporting new IT initiatives or existing IT efforts that weren’t already supported pre-pandemic.

Almost all district leaders are looking to the federal government for technology funding help.

About three-quarters of those questioned plan to request support from the Federal Communications Commission’s Emergency Connectivity Fund for Wi-Fi hot spots, while 90 percent of respondents said infusions provided through three stimulus bills enacted over the last 17 months significantly helped remote-learning or related IT initiatives in their districts during the pandemic. (See EdWeek Market Brief’s recent, nationwide survey showing how district officials plan to spend the new, $7 billion connectivity fund overseen by the FCC.)

The three COVID stimulus packages heaped an overall $189.5 billion financial windfall on U.S. K-12 schools. Districts have until Sept. 30, 2024, to commit the last bit of that money.

Compared with the CoSN review, a recent EdWeek Market Brief survey found a slightly lower percentage – 62 percent – of 280 district administrators interviewed, planned to seek ECF reimbursement for Wi-Fi hot spots for home use. However, the CoSN survey did not specify that the hot spots sought for reimbursement pertained only to home use.

“There is a marked shift in how school district IT leaders are preparing for this fall, compared to the back-to-school survey results from last year,” CoSN CEO Keith Krueger said in a statement. “While the federal government delivered critical funding when school districts needed it most, we must now invest in cybersecurity and ensure sustainable, secure and equitable home broadband access for students and educators into the future.”

Image by Getty

Graph provided with permission from the Consortium for School Networking


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Congressional Bill Aims to Incentivize Education Companies, Schools to Sharpen Cybersecurity

congressional bill aims to incentivize education companies schools to sharpen cybersecurity
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A bill recently introduced in the House would help define best cybersecurity practices for K-12 vendors and outline new spending that could benefit certain education companies focused on online safety.

The Enhancing K-12 Cybersecurity Act, introduced June 17 by Rep. Doris Matsui, D-Calif., would task the Department of Homeland Security with establishing a program to circulate K-12 cybersecurity best practices, training, and lessons learned, and with recommending online safety tools for purchase by state education agencies and school districts.

The bill calls on DHS to consult with school IT vendors and cybersecurity companies in putting together the list of best practices.

Doug Levin, the national director for the K12 Security Information Exchange is lobbying for the Matsui bill, expects significant regulatory action at the federal and state levels around K-12 cybersecurity, though it’s difficult to say exactly when that will happen. The K-12 Security Information Exchange operates the K-12 Cybersecurity Resource Center, an online database that tracks K-12 cybersecurity incidents.

The House bill could face a steep climb to become law, as the House Education and Labor Committee currently has no plans to consider the measure, and companion legislation has yet to be introduced in the Senate.

Lawmakers failed to vote on a similar bill introduced in 2020, before the previous congressional term ended in December.

Schools are relying more on technology for remote learning, and policymakers are seeing the need to start imposing baseline internet safety expectations for school districts and vendors, he said.

With cybersecurity policies likely to tighten, school districts and government agencies will increasingly look toward education companies that have already crafted and adhere to a set of best practices for cybersecurity, Levin said.

If passed, the federal bill charts the creation of a DHS-run database that would recommend security tools and services for schools to purchase, and allow schools and states to find and apply for funding opportunities to improve cybersecurity.

H.R. 4005 doesn’t spell out how the money would be dispersed, so the federal government would likely issue further guidance on expenses that might qualify for any cybersecurity grants issued, if the legislation is enacted, Levin said.

In addition to defining best practices and outlining new channels for K-12 cybersecurity funding, the legislation proposes the development of a voluntary registry of K-12 cyberattack incidents, and would require yearly DHS reports analyzing cyber incidents across all levels of K-12.

Information to be collected into the registry may include descriptions of the incidents’ size, and whether each incident was the result of a breach, malware, distributed denial of service attack, or other method designed to cause a vulnerability.

“The bill certainly is responsive to the needs that members of Congress have been hearing from the field,” Levin said. “School districts are feeling under assault from ransomware.”

Levin has compiled data showing that many cyberattacks have targeted teacher and student data stored by education companies, not just within schools.

According to the K12 Cybersecurity Resource Center’s most recent annual report on the state of K-12 cybersecurity, at least 75 percent of all data breach incidents affecting public K-12 school districts resulted from occurrences involving school vendors and other partners.

The Federal Trade Commission has ratcheted up its focus on data breaches in K-12 recently, signaling a stricter enforcement posture toward companies that collect data on K-12 students and teachers.

Organizations endorsing the Enhancing K-12 Cybersecurity Act include the National Association of Secondary School Principals, the National Association of Elementary School Principals, the Council of Chief State School Officers, the National Association of State Chief Information Officers, the State Educational Technology Directors Association, and the Consortium for School Networking.

“As cyber criminals grow more sophisticated and aggressive, we must provide the resources and information necessary to protect our schools,” Matsui said in a statement. “The Enhancing K-12 Cybersecurity Act provides a roadmap and prepares our cyberinfrastructure for the threats of tomorrow.”

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How Will Districts Spend Their Slice of the New FCC $7 Billion Connectivity Fund?

how will districts spend their slice of the new fcc 7 billion connectivity fund
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EdWeek Market Brief surveyed district administrators on how they plan to spend new stimulus funds focused on out-of-school internet connectivity needs.

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K-12 Dealmaking: GoGuardian Acquires Formative Assessment Platform; Tutoring Startup Becomes Europe’s Latest Unicorn

k 12 dealmaking goguardian acquires formative assessment platform tutoring startup becomes europes latest unicorn
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GoGuardian, which provides a suite of classroom management and student safety solutions, has acquired Edulastic, the companies announced this week.

Edulastic describes itself as a next-generation formative online assessment platform that helps teachers quickly identify learning gaps, give students differentiated assignments to meet individual learning needs, and monitors students’ progress on the way to standards mastery.

The acquisition will advance Los Angeles-based GoGuardian’s mission to create the “ultimate learning platform,” the announcement says.

“Gauging student understanding is a vital element of effective teaching and learning. The Edulastic team has created sophisticated, data-driven solutions that provide teachers with real-time, actionable insights that support great teaching and improved outcomes,” GoGuardian co-founder and CEO Advait Shinde said in a statement. “We couldn’t be more excited to welcome the talented Edulastic team into the GoGuardian family.”

The companies estimate that the acquisition will allow their combined platform to reach one out of three K-12 students nationwide. GoGuardian already serves over 20 million students in more than 14 million schools, and Edulastic is used by more than 9 million students at more than 19,000 schools, according to the announcement.

“Since our founding, Edulastic has been on a mission to deliver insights that help teachers teach and help students learn,” Edulastic co-founder and CEO Madhu Narasa said in a statement. “GoGuardian is a natural fit that will accelerate our mission and expand our ability to serve educators, now and long into the future.”

The acquisition was led by GoGuardian and Sumeru Equity Partners, a technology-focused growth capital firm that first invested in GoGuardian in 2018. Edulastic is backed by early-stage venture capital firm Primera Capital.

Austrian tutoring startup announces investment, ‘unicorn’ status. After receiving a $244.4 million Series C investment led by DST Global, GoStudent announced it is Europe’s latest ed-tech unicorn and the highest-valued ed-tech company in Europe, according to an announcement.

The company is now valued at $1.7 billion, or €1.4 billion.

GoStudent, which is based in Vienna and provides one-to-one video-based online tutoring, also saw investments this round from SoftBank Vision Fund 2, Tencent, Dragoneer, Coatue, Left Lane Capital, and DN Capital.

The investment will be used to drive global expansion, according to the announcement. GoStudent is currently used in 15 countries, has expanded its team to more than 500 employees, and has opened 12 new offices, adding new locations in Athens, Istanbul, and Amsterdam.

The company aims to be present in over 20 countries by the end of 2021, planning to launch in Canada and Mexico this summer, and also intends to invest in branding, product development, and company acquisitions. GoStudent will also double its team to over 1,000 employees this year, the company said.

GoStudent grows by a rate of approximately 30 percent month-over-month, according to the announcement.

“At the heart of GoStudent is our mission to build the No. 1 Global School,” GoStudent co-founder and CEO Felix Ohswald said in a statement. “The new investment and the resulting opportunities for continued international growth bring us one step closer to fulfilling our mission.”

Apax Digital Fund invests in Revolution Prep. Private equity firm Apax Digital Fund will invest in online tutoring platform Revolution Prep, Apax announced.

The announcement doesn’t give a specific figure, but refers to the infusion as a “growth investment” that will allow Revolution Prep to expand its offering and increase access to world-class online tutoring.

The investment will enable Revolution Prep to make professional tutors available to more students in the U.S. and beyond, the announcement says. Over 1 million families have used the service.

“The pandemic has accelerated the shift from traditional to online learning and we’re continuing to see strong demand even as society is re-opening,” Revolution Prep CEO Matt Kirchner said in a statement. Apax Digital’s “investment will support an acceleration of our key growth priorities, including scaling up the more affordable small group tutoring format and the strategic expansion into the middle school tutoring segment, supporting families earlier in their academic journeys.”

Apax Digital Fund was attracted by Revolution Prep’s “cutting-edge” technology platform, longstanding partnerships with schools, and breadth and expertise of its tutors, Marcelo Gigliani, managing partner of Apax Digital said in a statement.

Lincoln International was the exclusive financial adviser to Revolution Prep in connection with the transaction.

ETS Strategic Capital and GSV Ventures invest in Degreed. Princeton, N.J.-based ETS Strategic Capital, the venture capital arm of research and assessment organization ETS, is joining GSV Ventures to invest in Degreed, a workforce upskilling company used by about one in three Fortune 50 companies, according to an announcement.

The investment is aimed to continue to advance and grow ETS’s educational business and mission through high-growth dealmaking, the announcement says.

San Francisco-based Degreed received a $153 million Series D funding round led by Sapphire Ventures and Riverwood Capital in April.

“Our investment in Degreed will help us to continue to leverage high-growth companies who are aligned to the business and mission of ETS and grow globally as an organization,” Ralph Taylor-Smith, managing director of ETS Strategic Capital, said in a statement. “The corporate learning, workforce development and reskilling/upskilling sector is a key new business growth area for ETS.”

The announcement cites a study by Statistia showing that $82.5 billion was invested in workplace training in the U.S. in 2020.

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How Quickly Will School Districts Spend Federal Stimulus Money?

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An EdWeek Market Brief survey looks at the pace at which district administrators will use money from the two most recent federal emergency relief packages.

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How the SPAC ‘Hype Cycle’ Could Alter The K-12 Education Marketplace

how the spac hype cycle could alter the k 12 education marketplace
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Investors are betting big on K-12 education companies after the global pivot to remote learning last year, and now ed-tech firms are looking toward the public markets in potentially greater numbers than ever before. 

Ed-tech companies traded on the U.S. public market are rare, and even more so in the K-12 space. 

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What State and Local Ed Tech Directors Worry About as Schools Return to In-Person Learning

what state and local ed tech directors worry about as schools return to in person learning
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The new executive director of the organization representing the state’s ed tech directors says teachers will need myriad forms of support as their schools return more fully to face-to-face instruction.

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Walton Foundation Executive Leaves to Launch New K-12 Investment Fund

walton foundation executive leaves to launch new k 12 investment fund
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The Walton Family Foundation’s K-12 education program director is resigning from his role to start an independent K-12-focused investment fund.

With the assistance of a $200 million contribution from the Walton family, Marc Sternberg today is launching A-Street Ventures, an investment fund that will seed and scale innovative K-12 student learning and achievement solutions for students, families, and schools, according to a letter Sternberg wrote announcing his departure and the initiation of the fund.

“As the future of work shifts toward artificial intelligence, automation, and outsourcing to foreign countries, the financial security of, and accessibility to, America’s middle class has never been more in doubt,” the letter says. “In this new world, opportunity and stability will belong to young people who can adapt, think critically, continue learning new skills, thrive in collaborative environments, and lead teams.”

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Marc Sternberg

The announcement comes as the education space has seen a recent surge of venture capital investment. Investors put more than $16 billion into ed tech in 2020, roughly double the amount that VCs put forward in 2018, according to a report by HolonIQ.

A-Street, which will be based in Bentonville, Ark., plans to invest in a mix of early-, growth- and late-stage ventures. At the outset, it will focus on digital-first instructional materials and “new paradigms” for student assessment, the letter says.

In terms of assessment platforms, the firm will direct its attention toward curriculum-embedded products that can be used for both summative and formative purposes, to shape instruction and support students and their families, Sternberg told EdWeek Market Brief in an interview.

In addition to its focus on assessments, A-Street will attempt to distinguish itself from other investment funds by focusing on uplifting the teaching profession and supporting high-quality, digital-forward content, he said.

In contrast with most education investment funds, which have a seven- or 10-year outlook, A-Street will look to bolster target companies for at least 15 years before exiting, he said.

The fund plans to primarily focus on companies operating in the U.S. K-12 market, but may also invest outside the K-12 sphere when potential breakthroughs could benefit primary or secondary schools, Sternberg’s letter says.

A-Street will redirect profits toward charitable causes or future investment, though the firm intends to operate with “all the rigor and ambition of a traditional closed-end investment fund,” according to Sternberg.

The fund will be financed solely by the Walton family, he said during the interview. Instead of going back to the investors, funds will be recycled into the current fund and for future accounts. The new firm has not yet communicated with any education companies about investment possibilities, he said.

Sternberg previously worked as the senior deputy chancellor at the New York City Department of Education, after serving as a principal and teacher. He will continue as a senior adviser for the Walton Family Foundation, he said in his letter.

“To the entrepreneurs and the idea-makers: we look forward to supporting your vision,” Sternberg wrote. “Now is the moment for your big thinking, new approaches, and finding common ground that advances progress.”


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