How to Fund AI Tools With Title I, II, and ESSER Money
ESSER money is gone — every dollar of it had to be obligated by September 2024 at the latest, with final spend-down closed out in the following months. Title I, Part A and Title II, Part A remain active, ongoing federal funding streams that can, under specific conditions, cover AI tools today. Understanding what actually changed is the first step to funding a purchase correctly.
Quick Answer: ESSER (Elementary and Secondary School Emergency Relief) funding fully expired after its September 2024 obligation deadline and is no longer available for new purchases. Title I, Part A can fund AI tools when they're tied to a school's improvement plan and used to supplement, not replace, existing instruction; Title II, Part A funds AI-related professional development more readily than software licenses; Title IV, Part A is the stream most directly built for technology. All three require documentation connecting the purchase to a specific, identified need.
Administrators searching for "ESSER money for AI tools" in 2026 are, understandably, running into outdated advice written while that money still existed. This guide covers what happened to it, and which federal streams actually fund an AI tool purchase now.
Where ESSER Money Actually Stands Today
ESSER was always designed as temporary, pandemic-era relief — not a recurring line item — and its statutory deadlines have now fully passed.
What ESSER I, II, and III Actually Funded
Congress created three rounds of Elementary and Secondary School Emergency Relief funding in quick succession, each larger than the last.
- ESSER I, authorized by the CARES Act in March 2020, provided roughly $13 billion nationally, with funds required to be obligated by September 30, 2022.
- ESSER II, authorized by the CRRSA Act in December 2020, provided roughly $54 billion, obligated by September 30, 2023.
- ESSER III (ARP ESSER), authorized by the American Rescue Plan in March 2021, provided roughly $122 billion — the largest single K-12 federal relief package in U.S. history — with an obligation deadline of September 30, 2024.
Why ESSER Can No Longer Fund a New AI Tool Purchase
Once each round's obligation deadline passed, districts could no longer commit that money to a new contract. Some states received U.S. Department of Education approval for a limited late-liquidation window, extending final drawdown on already-obligated funds into early 2025 — but that window covered spending down existing commitments, not signing new ones. If a vendor or consultant is still marketing "ESSER-eligible" AI tools in 2026, that claim doesn't reflect current federal rules.
For the broader funding landscape ESSER used to sit inside, see Funding & Budgeting AI in Education: The 2026 Guide.
GEER and the Emergency Connectivity Fund Followed the Same Path
ESSER wasn't the only pandemic-era program built with a hard expiration date. The Governor's Emergency Education Relief (GEER) Fund, distributed at the state level, and the FCC's Emergency Connectivity Fund, which covered devices and connectivity, both ran on similarly fixed windows and have since closed. Any AI-tool funding conversation that references either program by name in 2026 is working from outdated information, the same way ESSER-based pitches are.
Title I, Part A: The Largest Still-Active Funding Stream
Title I, Part A of the Elementary and Secondary Education Act remains the largest ongoing federal K-12 funding program, targeted at schools with high concentrations of students from low-income families.
What Title I Covers — and What Counts as "Supplemental"
Title I funds must supplement, not supplant state and local funding — a district can't use Title I to pay for something it would otherwise have funded locally. An AI tool purchased with Title I money needs to be an addition tied to a school's improvement plan, not a replacement for an existing budget line.
- Eligible use: an AI tool addressing an identified academic gap named in the school's Title I plan, such as differentiated reading support in a qualifying school.
- Not eligible: replacing a locally-funded license the district already budgets for every year.
- Documentation needed: a clear link between the tool and a specific goal in the school's approved Title I improvement plan.
How AI Tool Purchases Fit Under Title I
A Title I-funded AI purchase typically routes through the same needs-assessment process as any other Title I instructional material — identify the gap, name the intervention, and show the connection in the school's plan before requesting funds. Best AI Education Tools Under $10 a Month is a useful starting reference for evaluating what a Title I-eligible tool might actually cost at the school or classroom level.
Title II, Part A: Funding Professional Development, Not Just Tools
Title II, Part A — officially "Supporting Effective Instruction" — funds educator preparation, recruitment, retention, and professional development rather than instructional materials directly.
What "Supporting Effective Instruction" Actually Allows
Because Title II-A is built around educators rather than materials, it's a stronger fit for training staff to use an AI tool well than for buying the tool itself. A district can generally use Title II-A funds for AI-focused professional development sessions, coaching, and evaluation-system updates that reflect new instructional practices.
- Professional development on prompt design, AI-assisted differentiation, or responsible AI use in the classroom.
- Coaching and mentoring programs that include AI-literacy components.
- Recruitment and retention initiatives, where relevant to staffing an AI-supported instructional model.
Using Title II-A for AI Training Rather Than Licenses
A common, effective pairing is to fund the AI tool license itself through Title I or Title IV, and fund the staff training on how to use it through Title II-A — treating the two as separate line items rather than expecting one funding stream to cover both. Training time matters especially for staff early in their careers; The ROI of AI for New Teachers looks at how that time investment weighs against the workload pressure new teachers already carry.
Title IV, Part A: The Funding Stream Built for Technology
Title IV, Part A — the Student Support and Academic Enrichment (SSAE) Grant program — is the one federal stream explicitly written with technology in mind, making it the most direct route for many AI tool purchases.
The Three Required Focus Areas
Title IV-A statute requires spending across three areas: a well-rounded education, safe and healthy students, and the effective use of technology. An AI tool that supports instruction can generally be justified under that third category when a district documents the connection.
| Focus Area | What It Covers | AI Tool Fit |
|---|---|---|
| Well-rounded education | Arts, STEM, civics, advanced coursework access | Indirect — AI tools supporting these subjects may qualify |
| Safe and healthy students | Mental health support, substance-use prevention, physical education | Generally not a fit for instructional AI tools |
| Effective use of technology | Digital literacy, blended learning, ed-tech professional development | Direct fit for most classroom AI tool licenses |
A tool considered under this pillar is worth comparing carefully before a request goes in — SchoolAI vs Khanmigo: Which Is Better for Teachers? is one example of the side-by-side comparison a Title IV-A request should be able to justify.
The 15% Technology Infrastructure Cap — and Its Exception
Districts receiving a Title IV-A allocation of $30,000 or more are generally limited to spending no more than 15% of that award on technology infrastructure — hardware and network equipment, specifically. Software licenses, digital content, and technology-focused professional development are typically treated separately from that infrastructure cap, which is the detail many administrators miss. Districts receiving less than $30,000 are exempt from the 15% cap entirely.
How the Three Federal Streams Compare
Seeing all three side by side makes the routing decision faster than reading each section separately.
| Funding Stream | Primary Purpose | Funds an AI License Directly? | Best Paired Use | Key Constraint |
|---|---|---|---|---|
| Title I, Part A | Academic support in high-poverty schools | Yes, if tied to the school's improvement plan | Differentiated instruction tools addressing a named gap | Must supplement, not supplant, existing local funding |
| Title II, Part A | Educator development and effective instruction | Rarely — better suited to training | AI-literacy professional development, coaching | Built around educators, not software purchases |
| Title IV, Part A | Well-rounded education, safety, technology | Yes, under the technology pillar | General classroom AI tool licensing | 15% infrastructure cap for awards of $30,000+ |
Funding Sources Beyond Federal Title Money
Federal Title funding isn't the only route, and for some districts it isn't even the fastest one.
E-Rate and Connectivity Funding
The FCC's E-Rate program, administered through the Universal Service Administrative Company (USAC), funds internet connectivity and internal network infrastructure for eligible schools and libraries on an ongoing, non-expiring basis — unlike the pandemic-era Emergency Connectivity Fund it's sometimes confused with. E-Rate generally covers the network a cloud-based AI tool runs on rather than the software subscription itself, which makes it a complement to Title funding rather than a substitute.
State and Local Grant Programs
A growing number of states run their own ed-tech or AI-specific grant programs, separate from federal Title money entirely, alongside locally approved technology bond funding at the district level.
- Check your state department of education's website for a dedicated ed-tech or digital learning grant program — availability and deadlines vary widely by state.
- Ask your district's finance office whether any locally approved technology bond or levy already includes a software or AI-tool category.
- Some regional education service agencies negotiate group licensing rates across multiple districts, which can bring a per-seat AI tool cost down meaningfully compared to a single district purchasing alone.
A Step-by-Step Process for Requesting Funding at Your School
Requesting any of these funding streams follows a broadly similar process, whether the request originates from a teacher, department, or building administrator.
- Identify the specific need first, before naming a tool — a reading gap, a professional development need, or a technology-access gap the school's plan already documents.
- Match the need to the right funding stream — an academic intervention fits Title I, staff training fits Title II-A, and general ed-tech access fits Title IV-A.
- Check your district's consolidated application or state ePlan system, where most districts report planned Title I/II/IV spending to the state education agency.
- Request a vendor quote and data privacy agreement together — most district business offices require both before a purchase order is issued.
- Route the request through your building or district's federal programs coordinator, who manages compliance across all Title-funded purchases.
- Document the connection to the school's improvement plan in writing, even for a relatively small purchase — this is what an auditor checks first.
A Worked Example: Budgeting a Title I Request
Say a Title I-eligible elementary school with 20 classroom teachers wants to fund a per-teacher AI content-generation subscription for the coming school year. Working the math before submitting a request makes the ask far easier for a federal programs coordinator to approve quickly.
- Per-teacher cost: a Starter-tier subscription such as EduGenius's, at $7.99/month, works out to roughly $95.88 per teacher for a full year.
- School-wide annual total: across 20 teachers, that's approximately $1,918 for the year — a modest enough figure to fit inside most schools' existing Title I supplemental materials line without requiring a separate board vote.
- Documentation to prepare: the specific reading, math, or differentiation gap the tool addresses, referenced directly from the school's current improvement plan, plus the vendor's signed data privacy agreement.
Presenting a request this way — a specific per-teacher cost, a specific school-wide total, and a specific documented need — moves noticeably faster through a federal programs office than a general request to "explore AI budget options." It's also worth confirming a free tier genuinely can't cover the same need first; Free vs Paid AI Tools for Teachers: What's Worth It? walks through that comparison before any funding request is worth writing.
Compliance Considerations: Procurement, Data Privacy, and Documentation
Federal funding comes with federal compliance obligations that don't apply to a personal purchase, and skipping them is the single most common reason a request gets delayed.
FERPA, COPPA, and Vendor Data Agreements
Any AI tool that touches student data needs to comply with the Family Educational Rights and Privacy Act (FERPA) and, for tools used by students under 13, the Children's Online Privacy Protection Act (COPPA). Most districts require a signed data privacy agreement before purchase — many use a template maintained by the Student Data Privacy Consortium, which a growing number of states have adopted as a standard.
- Confirm the vendor will sign your state or district's standard data privacy agreement before requesting a purchase order.
- Check whether your state maintains an approved-vendor list; several states publish one specifically for ed-tech and AI tools.
- The Future of Privacy Forum publishes ongoing tracking of state student-privacy law, useful background before a first-time AI tool purchase.
Documentation an Auditor Will Actually Ask For
Federal program audits typically request the same handful of documents regardless of which Title stream funded a purchase.
- The specific need identified in the school or district improvement plan.
- The competitive quote or bid process followed, per your state's procurement threshold.
- The signed data privacy agreement.
- Evidence the purchase supplements rather than supplants existing local funding — the "supplement not supplant" test.
Mistakes That Get Funding Requests Rejected
- Naming the tool before naming the need. A request built around "we want to buy Tool X" is weaker than one built around a documented gap the tool happens to address.
- Skipping the data privacy agreement step. Business offices increasingly won't process a purchase order without one already signed.
- Assuming ESSER is still available. Any request built around ESSER eligibility in 2026 will be rejected outright — the funding no longer exists.
- Using Title II-A to request a software license instead of training. Reframe the request as professional development, or route the license cost through Title I or Title IV instead.
- Missing the district's internal deadline for the consolidated application. Most states set an annual window for planned Title spending; a request submitted after that window often waits a full year.
- Requesting a multi-year commitment on a single year's allocation. Title I, II, and IV allocations are set annually and can shift year to year — a funding request should generally cover one budget cycle at a time rather than assuming a multi-year subscription is automatically approved.
Key Takeaways
- ESSER I, II, and III funding is fully expired — all three rounds passed their federal obligation deadlines between September 2022 and September 2024, with final liquidation closed out shortly after.
- Title I, Part A remains the largest active federal K-12 funding stream and can cover an AI tool tied to a school's documented improvement plan, under the "supplement not supplant" rule.
- Title II, Part A fits AI-related professional development and staff training more naturally than software licenses.
- Title IV, Part A is the stream most directly built for technology, with a 15% cap on infrastructure spending (not software) for districts receiving $30,000 or more.
- Every funding stream requires documenting a specific need before naming a tool, plus a signed data privacy agreement addressing FERPA and, where relevant, COPPA.
- EduGenius publishes its pricing directly — Starter at $7.99/month (500 credits) and Professional at $15.99/month (1,000 credits) — which is the kind of concrete cost detail a federal programs coordinator needs for a funding request.
- Routing a request through your district's federal programs coordinator, rather than purchasing independently, avoids the most common compliance mistakes.
Frequently Asked Questions
Can schools still use ESSER funds for AI tools in 2026?
No. ESSER I, II, and III all passed their federal obligation deadlines between September 2022 and September 2024, and the funding has been fully closed out since. Any vendor marketing a tool as "ESSER-eligible" now is referencing rules that no longer apply.
Which federal funding stream is the best fit for an AI tool license?
Title IV, Part A is generally the most direct fit, since its statute explicitly covers the effective use of technology. Title I, Part A can also fund a tool when it's tied to a documented academic need in a school's improvement plan; Title II, Part A fits staff training on the tool better than the license itself.
Does Title IV-A funding really cap AI software spending at 15%?
No — the 15% cap applies specifically to technology infrastructure (hardware and network equipment) for districts receiving $30,000 or more, not to software licenses or digital content. That distinction is one of the most commonly misunderstood parts of Title IV-A.
What documentation does a school need before requesting Title funding for an AI tool?
A written connection between the tool and a specific need in the school's improvement plan, a competitive quote following your state's procurement threshold, and a signed data privacy agreement addressing FERPA and, for tools used by students under 13, COPPA.
Who at a school or district actually approves these funding requests?
Typically a district's federal programs coordinator, who manages compliance across Title I, II, and IV spending and reports planned expenditures to the state education agency through the district's consolidated application.
Are there non-federal funding options if Title money isn't a good fit?
Yes. The FCC's E-Rate program funds the network connectivity an AI tool depends on, several states run their own ed-tech grant programs independent of federal Title money, and some districts hold locally approved technology bond funding that already includes a software category. It's worth checking all three before assuming a federal Title stream is the only option.
Related Reading
References
- U.S. Department of Education — ESSER I, II, and III obligation deadlines and closeout guidance.
- Elementary and Secondary Education Act (ESSA) — Title I, Part A; Title II, Part A; Title IV, Part A statutory text.
- Student Data Privacy Consortium — standard data privacy agreement template adopted across multiple states.
- Future of Privacy Forum — tracking of state student data privacy law.