During the COVID-19 pandemic, much of the world was in disarray, and that included school districts. School districts had to cope with learning loss, extra expenses to stay open, and other costs that might be tangentially related to the pandemic. To help assuage the situation, the federal government offered the ESSER funding program to dole out aid money to schools in need. But where is Esser funding now in 2026?

This guide takes you through how ESSER funding works, what it's used for, and what parts of the program are still working today, in 2026.

What is ESSER Funding?‍

ESSER funding, short for Elementary and Secondary School Emergency Relief, was money the U.S. federal government sent to schools during the pandemic. The goal was simple: help schools stay open, address learning loss, and cover extra costs tied to COVID-19. School districts would use it for a variety of different purposes such as upgrades, laptops, tutoring, summer programs, and even special programs to cater to students from underserved communities. It gave schools a space to breathe and time to stay open.

ESSER was never meant to last, and that's why some might be familiar with the term ESSER Funding Cliff. The money came in three rounds through federal laws, each with specific deadlines for spending. Districts had to commit the funds by set dates, with the final major deadline in September 2024. That cutoff left many schools facing hard choices, and although the program still exists and is active today in some form, it looks very different.

ESSER funding requirements

• ESSER I
  • Funds for COVID response, cleaning, technology, health, and safety support
  • Obligation deadline: September 30, 2022
  • Standard reporting and tracking required
• ESSER II
  • Expanded use for reopening schools, addressing learning loss, and facility repairs
  • Obligation deadline: September 30, 2023
  • Same reporting as ESSER I, with more focus on recovery
• ESSER III (ARP ESSER)
  • At least 20% reserved for learning loss; remainder for operations, staffing, and recovery efforts
  • Obligation deadline: September 30, 2024
  • Late liquidation extensions possible into 2025–2026

ESSER funds were meant to give schools flexibility while ensuring money was tied to pandemic recovery and student needs. Allowable uses included ventilation upgrades, technology for online learning, tutoring, extended day or summer programs, and staffing to support health and safety. Every district had to submit plans to its state for approval, and all expenditures had to be documented and reported back through the state to the federal level.

Each round of ESSER also came with strict timelines. Districts had to commit funds by the obligation deadline, and extensions were only granted under certain conditions. ESSER III added an extra requirement that at least 20% of allocations go directly toward learning loss.

What's the current status of ESSER funding in 2026?‍

ESSER funding has mostly run its course, but there are still pockets of money available under certain conditions. ESSER I and II are essentially closed out, with nearly all funds already spent. ESSER III, the largest pot, officially reached its spending deadline in September 2024. While most of that money has already been used, not all districts were able to finish spending in time. That’s where exceptions come in.

Some states and districts received approvals to keep spending ESSER III dollars past the deadline through what are called “late liquidation” extensions. These extensions allow schools to continue using funds into 2025 and even 2026, as long as the money had been committed before the cutoff. Recently, the Department of Education confirmed that states with approved projects could continue using this extra time. That means schools with unfinished projects tied to recovery efforts still have a window to make use of remaining ESSER dollars, giving a bit of hope that the funding impact will stretch further than originally expected.

Where does ESSER funding go?‍

ESSER is only a single federal program, but it's distributed nationwide. Every state receives funding, though the amount varies widely depending on the population size. Local needs and the number of schools serving low-income students also play a big role.

• For large states like California, Texas, and New York, the money is huge, reaching into the tens of billions of dollars.
• For smaller states, the dollar amounts may look modest in comparison, but they still represented a historic infusion of resources that many districts had never seen before.
• In rural states such as Wyoming or Vermont, this funding often meant more direct access to technology, upgraded facilities, and additional support programs for students who might otherwise be overlooked.

This shows quite clearly that ESSER funding reached every nook and cranny of American school districts.

How schools are still using ESSER funding‍

Schools are still putting ESSER money to work in ways tied directly to student recovery. Across the country, billions have gone into tutoring, summer learning, and after-school programs that target unfinished learning.

Some districts are still using ESSER funds through approved extensions, especially for programs already in motion. For example:

• Schools in Arizona planned to continue tutoring and facility repairs
• Illinois still had over $77 million left to spend
• Districts in Connecticut, like Norwalk, requested extensions to cover health, learning, and supply needs

These extensions show that the program could continue on, but in a different form or name. With a lot of attention being put on education, federal grants and funding for programs like ESSER should continue.

How ESSER funding supports financial education

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ESSER funds give school districts the flexibility to invest in programs that connect academic lessons with real-world skills. One of the most impactful ways districts have used these funds is to support financial literacy programs. For teens, this goes beyond textbook math: it becomes a lived experience where budgeting, saving, and reflecting on choices are tied to both knowledge and emotions.

Financial literacy matters most when it is practical, safe, and inclusive. By weaving funding into curriculum, technology, teacher training, and equity efforts, schools can close opportunity gaps and create a foundation of financial confidence for students who might otherwise be left behind.

• Curriculum
  • Funds interactive financial literacy courses
  • Students learn budgeting, saving, and decision-making with real-life examples
• Technology
  • Provides AI-powered tools and apps
  • Teens experiment with financial decisions safely through simulations and games
• Training
  • Supports teacher training in financial education
  • Educators use trauma-aware language and guide students through reflective practices
• Equity
  • Targets underserved schools
  • Students in under-resourced communities gain access to opportunities often limited to wealthier districts

How grants like ESSER support alternative education programs

Federal relief dollars, such as ESSER, have shown how flexible funding can give districts room to try new approaches for students who need it most. Many schools used these grants for tutoring, mentoring, and extended learning opportunities, especially in communities where traditional classroom support wasn’t enough. With late liquidation extensions still in play, some districts continue to direct ESSER dollars into programs that close learning gaps and strengthen student wellbeing.

This is where ThriveNest fits. ThriveNest is an AI-powered education platform built specifically for underserved children and young adults. It blends trauma-informed teaching with financial literacy and emotional support, giving students tools they can apply in daily life. For districts searching for innovative ways to use remaining grant dollars or looking ahead to other state and federal funding streams, ThriveNest offers a path to extend the impact of relief funding beyond short-term recovery.

Try our pilot program now!

FAQ

• How much funding did ESSER provide overall?
  Across its three rounds (ESSER I, II, and III), the program allocated nearly $190 billion to states and school districts. ESSER III, funded through the American Rescue Plan, was the largest portion, representing about two-thirds of the total. This scale made it one of the largest single federal investments in K–12 education in U.S. history. That's why it also provided schools with the opportunity to experiment a bit with alternative programs, because many school districts had never seen an infusion of this magnitude.
• Can ESSER funding be used for after-school or community programs?
  Yes. Districts have flexibility to support extended learning time, after-school programs, and community partnerships. Some schools have used funds to bring in nonprofits that teach financial literacy, provide mentoring, or offer hands-on budgeting workshops outside of regular class hours.
• When does ESSER funding expire?
  ESSER funds are time-limited. Districts had to obligate ESSER III dollars by September 30, 2024, with final spending deadlines extending into 2025 due to liquidation rules. This means many financial literacy programs created with ESSER support will need sustainable funding sources moving forward.
• How do schools decide how to spend ESSER funds?
  Spending decisions are usually made at the district level, with input from principals, teachers, and sometimes community members. Federal guidelines require schools to consider the needs of disadvantaged students and report how funds are used. This accountability helps ensure that dollars go toward closing equity gaps rather than short-term fixes.