Mental Health Funding

Supporting the Needs of Every Student

Funding Sustainable School-Based
Mental Health Services

Achieving Long Term Mental Health Funding for Schools:
It can be done!

It has never been more important for school districts to have a financial sustainability plan to ensure that they can continue the expansion of the mental health safety net many of them have recently implemented.

To help district leaders secure the resources to pay for these essential services,
Effective School Solutions (ESS) has devised a 7-part framework to guide
districts as they seek to obtain long-term funding for mental health services: S.U.S.T.A.I.N.

Introducing S.U.S.T.A.I.N. our 7-part framework to
sustainable school-based mental health services.

Image of SUSTAIN Texts
S: Seize the Opportunity to prioritize school-based mental health
The first key to making sure your district has a sustainable plan for funding mental health initiatives is simple: make mental health a priority. A school district’s budget is a reflection of the priorities it establishes and the choices it makes, and there is no greater priority than the mental health of our young people.

Title IA, Improving Basic Programs Operated by Local Educational Agencies Title IA funds can be used to support a wide range of mental health related non-instructional supports such as school counselors, positive behavioral supports and social-emotional learning methods that improve school climate, increase attendance, and improve physical and mental health.

Title II-A, Growing Teacher Development and Professional Learning Title II-A funds can be used for teacher development and professional learning, including in-service training and coaching on identifying and supporting students affected by trauma and mental illness.
Other professional development areas covered in Title II-A include employing effective methods to improve student behavior, identifying early interventions, and engaging parents, families, and communities.

Title IV Part A, Improving Student Academic Achievement Title IV Part A funds are to be used to improve student academic achievement by increasing the capacity of schools to provide all students with access to a well-rounded education, improve school conditions for student learning, and improve the use of technology.

AWARE, Advancing Wellness and Resilience in Education AWARE funds can be used to develop a sustainable infrastructure for school-based mental health programs and services. Leveraging their partnerships with the State Education Agency (SEA), Local Education Agency (LEA), Tribal Education Agency (TEA), and the State Mental Health Agency (SMHA), recipients of this grant-based program can implement mental health related promotion, awareness, prevention, intervention, and resilience activities. This program promotes the healthy and emotional development of school-aged youth and prevents youth violence in school settings.

IDEA IDEA Part B is specialized federal funding allocated to assist states in providing a free appropriate public education in the least restrictive environment for children with disabilities, ages three through twenty-one. These funds may be used to pay the excess costs of educating students with special needs including providing students with related services, encompassing therapeutic counseling.

IDEA funds are also available to address disproportionality, e.g., the overclassification of certain student groups to special education, or the over-suspension of certain student groups.

States appropriations fund student mental health supports and services. Recent state action has focused on awarding monies to support and develop:

  • School-based mental health programs and services
  • Mental health and wellness curricula
  • Staff training and professional development
  • Mental health screenings
  • Suicide prevention programs and services
  • Mental health professional staffing ratios

The federal government now allows for the use of Medicaid reimbursement for school-based mental health expenditures.


Medicaid is expected to be one of the fastest growing funding sources for school-based health expenditures, including mental health. All states offer the ability for districts to seek reimbursement for the cost of mental health services delivered to students with individualized education plans (IEPs). Historically, states were only able to obtain federal reimbursement for services provided to Medicaid-enrolled students who had an IEP. In 2014 the federal government reversed this policy, known as the “free care rule”.

The federal government now allows school districts to bill Medicaid for health services delivered to all children enrolled in Medicaid. Some states can update this policy change administratively, while other states need to submit a state plan amendment (SPA) to the Centers for Medicare and Medicaid Services (CMS). Currently 20 states have expanded the use of Medicaid to help cover the cost of mental health services for general ed students in addition to special ed students.

For example, in Pennsylvania, an LEA must enroll as a provider in the Medical Assistance program in order to participate in the school-based ACCESS program, also known as SBAP.

Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit

The EPSDT benefit ensures that children under age 21 enrolled in Medicaid receive appropriate preventive, dental, mental health, developmental, and specialty services. Based on certain federal guidelines, states are required to provide comprehensive services.

One of the key ways many districts fund their mental health initiatives is by evaluating the annual expenditure on tuition and transportation for students outplaced to specialized therapeutic schools. These placements, called Out-of-District Placements (ODPs) or Non-Public School (NPS) placements, are necessary for some students. Other students, however, can be supported in district with an even higher level of care.

Strengthening mental health supports in district
Districts often spend millions of dollars sending students to private therapeutic day schools and other outside placements. While students need the specific skills a specialized school offers, many students who are sent to an ODP or NPS because of behavioral or emotional challenges could be supported in the “least restrictive” environment of the public-school system if the right supports existed.

Compounded savings
Once a student is sent to an ODP or NPS they tend to stay out—so any savings from bringing those students back in district are compounded over multiple years. In addition, most districts use in school clinical support not just to bring students back from out of district, but to prevent additional students from going out in the future, creating a cost avoidance impact.
There are other emerging federal funding sources that are focused on school-based mental health. One such bill is the Bipartisan Safer Communities Act (BSCA) which authorizes $1.7 billion in mental health services to schools and communities. Signed in July 2022, the legislation authorizes funding for:

Improving Conditions for Student Learning
$1 billion in funding through Title IV-A to support a variety of activities to improve conditions for student learning through evidence-based practices to promote positive school climates.

Increasing Access to Children’s Mental Health Services
$80 million to health and human services to award grants to support pediatric primary care providers, emergency departments, and schools to rapidly access mental health specialists ‘expertise and better connect children to care.

Building Awareness of and Access to Mental Health Services
$240 million for programs that increase awareness and access to mental health supports for school-aged youth.

Providing Support after Traumatic Events
$40 million to improve treatment and services for children, adolescents, and families who have experienced traumatic events.

Hire More School-Based Mental Health Professionals
$300 million to help schools hire more school-based mental health professionals and help achieve the goal of doubling the number of school counselors. The purpose is to build and fortify a strong pipeline to train and place more school-based mental health professionals.
Managed by the U.S. Department of Education, the Education Stabilization Fund (ESF) is an investment of over $263 billion into state and institutional COVID-19 recovery and rebuilding efforts to prevent, prepare for, and respond to the coronavirus impacts on education for our nation’s students. The ESF includes distinct emergency relief funds relating specifically to mental health service provision: (1) the Elementary and Secondary School Emergency Relief (ESSER) Fund and (2) the Governor’s Emergency Education Relief(GEER) Fund.

Elementary and Secondary School Emergency Relief (ESSER) Fund
Representing the largest infusion of federal dollars ever to schools and stemming from three pieces of legislation (ESSER I, II, and III), ESSER allocations total $189.5 billion to state educational agencies. State education agencies then award subgrants to local educational agencies to address the impact of COVID-19 on children. A wide range of entities, including organizations serving students and families, may be a “subrecipient” of funds. ESSER funding allocates an additional $30,000 per student. Yet, most states have not yet spent all their awarded ESSER funds. ESSER III funding will expire in 2024. If districts haven’t allocated funds by then, the monies will disappear.

Governor’s Emergency Education Relief (GEER) fund
GEER grants are awarded directly to state governors for the purpose of providing local educational agencies, institutions of higher education, and other education related entities with emergency assistance. Governors may use these funds to provide support through a subgrant to an entity the Governor “deems essential” for carrying out emergency educational services, providing childcare and early childhood education, providing social and emotional support, and protecting education-related jobs. GEER funding will expire in 2023. GEER funding may be distributed to public agencies or private entities that coordinate or directly provide early intervention services under the Individuals with Disabilities Education Act (IDEA).

Our Funding Checklist will help you develop a financially
sustainable mental health care plan for your district.

We Can Help!

Effective School Solutions has a special Funding Consulting Team made up of former school administrators (superintendents, directors of special services, business administrators) with significant expertise in implementing sustainable, long-term funding of school-based mental health initiatives. We would be pleased to have a member of our Advisory Team meet with you to help form a plan to sustainably fund your mental health initiatives.

Learn more about Funding Sustainable School-Based Mental Health Programs

Complete this form to schedule a free mental health planning session where we will discuss available financial sources you can leverage to fund school-based mental health programs in your district.

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Our Unwavering Focus on Data Collection

At ESS, we have an unrelenting focus on data, measuring results, and communicating to our partners the proven impact our programming has on mental health, school outcomes and financial sustainability.

With every ESS partner, we will:

• Set data driven goals at the beginning of every implementation

• Have regular “Report Card” meetings in which we share the impact of ESS services

• Monitor data along the way to look for potential risk areas so that these can be proactively addressed

Learn more about our Will to Wellness 6 Step Framework

Complete this form to discuss best practices for districts, states, and federal policymakers that will reinvent mental health in schools over the next five years.

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Speak with our experts to learn how your district can improve outcomes and reduce costs

Complete this form to schedule a free consultation to learn more about your needs and challenges and to provide insights on where you may be able to improve mental health support.

Which areas are you interested in learning about?
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Let’s Discuss Your Student Mental Health Needs

Fill out the form to request a meeting with one of our clinical experts to explore ways we can partner to strengthen your mental health programs.

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