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At the Crossroads: Navigating the Funding Crisis for School Mental Health Services

Andrew Buher is Founder and Managing Director of Opportunity Labs. Cricket Heinze is a Senior Director at Opportunity Labs. They can be reached at andrew and cricket

School districts across the country face unprecedented financial shifts and budgeting challenges as a result of soon-to-expire pandemic-era relief funds, short falls due to changes in student enrollment patterns, and declines in state revenues. These losses will have a significant impact on the continuation of school-based mental and behavioral health services.

Since 2020, many districts have recognized the vital role schools can play in identifying and addressing youth mental health challenges. In response, they’ve hired counselors and social workers, implemented evidence-based mental and behavioral health programs, and provided training for teachers in early detection of youth mental health issues. A FutureEd analysis found that $7 billion of Elementary and Secondary School Emergency Relief (ESSER) III dollars have been spent on mental health programs and services in schools since the aid was approved in 2021.

As ESSER funding expires, districts will be forced to make reductions equivalent to a single-year loss of roughly $1,200 dollars per student. As such, district and school leaders will have to make difficult decisions about staff positions and programs established to help students facing mental health challenges.

And it’s already happening in districts large and small. We are not passing judgment on these decisions, instead we are shining a light on the complexity of this year’s budget challenges. These budget decisions will be critical given the state of youth mental health. In late 2021, the American Academy of Pediatrics (AAP), the American Academy of Child and Adolescent Psychiatry (AACAP), and the Children’s Hospital Association (CHA), followed by Surgeon General Vivek Murthy, all declared a national mental health crisis among young people.

There is evidence to support investment in school-based mental health programming. For instance, we know the integral role that mental health plays in academic success and well-being and in reducing chronic absenteeism. And evidence shows that a lack of mental health support most adversely affects high-poverty school districts, and those who were already vulnerable, including youth with disabilities, racial and ethnic minorities, LGBTQ+, and immigrant students.

Superintendents and school boards will have to reevaluate their districts’ priorities, deeply understand mental health’s impact on students’ academic, social and emotional, and overall well-being, and make tough trade-offs.

To support districts in this difficult, but critical work, Opportunity Labs built a community of practice (CoP) to facilitate mutual learning, innovation, and collaboration among 15 selected districts to promote the effective exchange of knowledge and best practices in budgeting that supports the sustainability of school-based mental and behavioral health interventions. We will create case studies in fall 2024 to share what we learn and provide resources and tools to help all districts navigate this challenging moment. In the meantime, we would encourage all schools and districts to consider the following questions:

  • How have current mental health programs impacted student outcomes, including academic performance, attendance, and overall well-being?
  • Which mental health programs or initiatives have yielded the most significant benefits (as measured by…)?
  • Are you optimizing your budget to ensure the most effective use of limited resources for mental health services? How do you know (e.g., student per capitas v. outcomes)?
  • What alternative funding sources, such as grants, partnerships, community contributions, state or federal funding can you access to supplement our budget?
  • What family and community engagement strategies can be used to build broad support for maintaining these critical services?
  • What evidence-based mental health interventions can be implemented that require fewer resources but still deliver substantial impact?
  • How can you integrate mental health support into existing school structures and routines to ensure sustainability?
  • What are the current and forthcoming state and federal policy changes that may affect funding and support for school-based mental health programs?

Opportunity Labs facilitates the National Healthy Schools Collaborative which Kaiser Permanente launched in spring 2020 to bring together leading school health organizations to identify and advance opportunities to increase access to healthy school environments.  We’re committed to supporting districts and schools in sustaining the progress they have made and to finding innovative solutions that provide every student with access to the mental health support they need to thrive.


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