Schools To Compete For $5B From Stimulus Law

States and school districts will soon be able to compete for more federal money to undertake school reforms sought by President Obama.

Part of the economic stimulus law enacted earlier this year, the $5 billion education fund is Obama's big shot at overhauling schools over the next couple of years.

Obama and his education secretary, Arne Duncan, planned to lay out how states can win the money Friday at the Education Department when they officially announce the "Race to the Top" competition.

The president will use the money to prod states to toughen academic standards and find better ways to recruit and keep effective teachers. To get the money, states will also need to be able to track student performance, and they will need a plan of action to turn around failing schools.

Schools that resist making the kinds of reforms the White House envisions risk losing out on the grants.

"What we're saying here is, if you can't decide to change these practices, we're not going to use precious dollars that we want to see creating better results; we're not going to send those dollars there," Obama said in an interview published Friday in The Washington Post.

Duncan told The Associated Press on Thursday, "I am unbelievably hopeful about the level of change we can drive and the amount of reform we're going to see."

A state will have to meet a series of conditions to earn points and boost its chances. Some of those conditions are controversial, especially among teachers' unions, which make up an influential segment of Obama's Democratic base.

For example, the administration says it will not award money to states that bar student performance data from being linked to teacher evaluations. Several states, including California, New York and Wisconsin, have such a prohibition.

But there are also elements the unions will embrace; states can earn points by submitting letters of support from state union leaders.

The Obama administration is using the stimulus not only to help schools ride out the recession but to try to transform the federal government's role in education. Not every state will get the money - Duncan envisions the dollars going to perhaps 10 to 20 states that can serve as models for innovation.

The $5 billion fund might not seem like much, considering the stimulus bill provided $100 billion for schools. But the fund is massive compared with the $16 million in discretionary money Duncan's predecessors got each year for their own priorities.

"This is a historic, unprecedented opportunity," he said.

Moreover, the fund has taken on added importance because in many states, the bulk of the stimulus money is being used to fill increasingly larger budget holes, and not for the innovations Obama wants.

A report from the Government Accountability Office earlier this month said school districts are planning to use the money mostly to prevent teacher layoffs.

"Most did not indicate they would use these funds to pursue educational reform," the report said. The GAO is the investigative arm of Congress.

Already, the promise of an extra $5 billion has helped Duncan prod state legislatures to do the administration's bidding.

For example, he warned Tennessee lawmakers they could lose out on the money if they kept blocking a bill to let more kids into charter schools; within weeks, the bill was enacted and signed into law.

"It's amazing the amount of progress, literally, without us spending a dime," Duncan said.

The Education Department will gather public comment on its rules for the $5 billion fund for the next 30 days; applications will be available in October, and the first round of money should be awarded early next year.