Investing in School Mental Health: Strategies to Wisely Spend Federal and State Funding

The current state of youth mental health warrants a transformation in how to invest in and deliver mental health services. Even before the COVID-19 pandemic, youth mental illness was a pressing concern that often went underestimated and
under addressed, despite approximately one in five children ages 3 to 17 years inthe United States experiencing a mental, emotional, developmental, or behavioral disorder (1). Rates of youth suicide were climbing (2), and many children and adolescents struggled with conditions such as anxiety and depression (3). Historically underserved populations, including racially and ethnically

The pandemic highlighted and increased youths’ mental health challenges.

minoritized and lesbian, gay, bisexual, transgender, queer, and/or questioning (LGBTQ+) youths, were disproportionately affected, with rates of suicide among Black youths rising faster than those of any other racial-ethnic group (4) and LGBTQ+ adolescents attempting suicide four times more often than non-LGBTQ+ youths (5). However, access to mental health resources and support was limited for numerous reasons, including stigma, financial barriers, and a scarcity of mental health professionals specializing in pediatric care (6, 7). Before the pandemic, the underinvestment in and fragmentation of the U.S. youth mental health system left a significant portion of the youth population grappling with their mental health in silence or unsupported.

The pandemic highlighted and increased youths’ mental health challenges. Prolonged periods of lockdowns, economic instability, social isolation, increased use of digital devices and exposure to social media, disrupted education, and uncertainty about the future took a toll on the mental well-being of children and adolescents. Many reported feelings of anxiety, depression, and loneliness as they faced the sudden loss of routine and social connections and the strain of remote learning (8). The inability to engage in typical social activities and rites of passage, such as proms, graduation ceremonies, and extracurricular activities, further exacerbated the sense of loss and isolation experienced by young people. In addition, >140,000 children in the United States lost a primary or secondary caregiver because of COVID-19 (9).

Furthermore, the strong impact of the pandemic on marginalized and minoritized communities revealed significant disparities in mental health and education systems and worsened existing inequities (10, 11). In addition to increased rates of psychiatric illness among children and adolescents, rates of suicide during the pandemic were higher than before the pandemic (12). In early 2021, U.S. children’s hospitals recorded a 45% increase in self-injury and suicide among 5- to 17-year-olds compared with the same period in 2019 (13). In recognition of this trend, U.S. primary health care leaders, including the Surgeon General and the American Academy of Pediatrics, declared a national emergency and made an urgent call for new and comprehensive approaches to ensuring the well-being and resilience of the younger generation (14).

Schools play a critical role in responding to the youth mental health crisis by serving as both a frontline support system and a hub for prevention and intervention. Of students receiving mental health services, most obtain those services in schools (15), making schools the most accessed mental health delivery system by children and adolescents. With the increasing prevalence of mental health challenges among young people, schools are uniquely positioned to identify and address these issues early. They provide a structured and consistent environment where students spend a significant portion of their day, highlighting the need for educators and staff to be trained in fostering a supportive atmosphere and recognizing signs of distress (16). Schools are ideally positioned to offer universal programming to promote the mental health of all students, including social-emotional learning, a positive school climate and positive behavior programming, and bullying prevention. Furthermore, schools can facilitate access to mental health resources, such as counseling services, and promote mental health education to reduce stigma and increase awareness (17).

Schools are increasingly working toward comprehensive school mental health systems (CSMHS), which offer multitiered systems of mental health supports and services (MTSS), ranging from mental health promotion to treatment directly in school buildings, and leverage partnerships between schools and community behavioral health providers (18). CSMHS typically have three tiers of support— tier 1 (prevention), tier 2 (early intervention), and tier 3 (treatment)—and include key practices such as well-functioning teams, data-based decision making, selection and implementation of evidence-based practices, and alignment of programming across the tiers. However, a recent national survey of school mental health policies and practices revealed that states vary widely in the availability and quality of CSMHS (19). Challenges include a limited school mental health workforce and funding, inconsistent community and legislative support, and poor-quality implementation of evidence-based practices (20).

In response to the negative impact of the COVID-19 pandemic on youth mental health, and demands by the public, government officials, and professional organizations to address the youth mental health crisis, an unprecedented amount of federal and state funding has been directed toward developing and improving CSMHS in the past 3 years. The Elementary and Secondary School Emergency Relief (ESSER) Fund and the Bipartisan Safer Communities Act (BSCA) each allocated billions of dollars to use toward improving youth education and well-being outcomes and expanding CSMHS. ESSER and BSCA funding is being used to support a full continuum of mental health services in schools, including promotion and prevention efforts such as mental health literacy, social-emotional learning, restorative practices, and bullying prevention.

The Elementary and Secondary School Emergency Relief (ESSER) Fund and the Bipartisan Safer Communities Act (BSCA) each allocated billions of dollars to use toward improving youth education and well-being outcomes and expanding CSMHS.

In 2020 and 2021, Congress passed three relief bills: the Coronavirus Aid, Relief, and Economic Security Act; Coronavirus Response and Relief Supplemental Appropriations Act; and the American Rescue Plan Act of 2021, which together comprise the ESSER Fund. The ESSER Fund provides financial support to each state education agency (SEA) on the basis of their proportion of funding under Title 1, Part A of the Elementary and Secondary Education Act (21). SEAs are required to allocate at least 90% of ESSER monies to local education agencies (LEAs) and have the option to reserve 10% of those funds for SEA-level activities. As of September 2022, SEAs spent approximately $1 billion of set-aside funds for student and staff mental health and well-being. SEAs and LEAs must obligate remaining ESSER monies by September 2024.

In June 2022, President Biden signed into law the BSCA, which also included support for SEAs and LEAs to expand CSMHS and other programming to promote safer, more inclusive, and positive school environments. The BSCA appropriated billions of dollars to several grant programs offered by the U.S. Departments of Education and Health and Human Services. These programs include Trauma-Informed Services in Schools and Project AWARE (Advancing Wellness and Resiliency in Education) grants of the Substance Abuse and Mental Health Services Administration and the Department of Education SchoolBased Mental Health Services Grant Program and Mental Health Service Professional Demonstration Grant Program.

As of September 2022, SEAs spent approximately $1 billion of set-aside funds for student and staff mental health and well-being.

In addition, the Department of Education Stronger Connections Grant Program awards nearly $1 billion to 56 U.S. states and territories to help high-need districts and schools create safe and supportive learning opportunities. States have also leveraged BSCA funds to support school mental health by means of block grant allocations and funding geared toward crisis response and the expansion of certified community behavioral health clinics. The BSCA also supports states and LEAs in improving use of Medicaid and Children’s Health Insurance Program (CHIP) funding for school mental health services by updating guidance on the billing and delivery of student services covered by Medicaid and CHIP, establishing a technical assistance center, and providing $50 million in grant awards for state expansion of Medicaid- and CHIP-funded school mental health services.

Although funding has flowed generously to SEAs and LEAs and their community partners to advance school mental health efforts, a funding cliff is approaching because of the termination of COVID-19 emergency relief funding to schools and impending state budget challenges. The degree to which CSMHS will be able to sustain gains from the surge in funding may depend largely on whether their recent investments have focused on infrastructure improvement and sustainability or on ongoing operating costs such as staff salaries and vendor contracts for mental health programming. However, even if previous investments prove unsustainable, it is not too late for state and local leaders—including, but not limited to, SEAs and LEAs—to examine their school mental health spending and capitalize on opportunities to sustain effective CSMHS.

Four strategies may help maximize a return on investments: leverage cross-sector partnerships to advance school mental health policies and funding, strengthen and expand Medicaid coverage of CSMHS, establish or enhance data systems, and create state technical assistance and professional development support for LEA CSMHS implementation.

Four strategies may help maximize a return on investments: leverage cross-sector partnerships to advance school mental health policies and funding, strengthen and expand Medicaid coverage of CSMHS, establish or enhance data systems, and create state technical assistance and professional development support for LEA CSMHS implementation. Each recommended strategy is geared toward SEA leadership, although LEA leaders must be involved in the planning and execution and may also benefit from applying the strategies locally.

Several states have identified cross-sector collaborations as critical to their successful advancement of children’s mental health and school mental health agendas (22, 23). Cross-sector collaborations comprise key partner agencies (e.g., Medicaid, public health, human services, health care, and universities), sometimes in the form of a children’s cabinet, community of practice, or coalition. States may invest in guiding this partnership body through a process to establish a shared vision and policy agenda that prioritizes school mental health. This partnership body would ideally be led or co-led by the SEA in partnership with other state public agencies, including behavioral health, and would be required, through executive or legislative order, to meet regularly and to include diverse school mental health partners.

States may invest in guiding this partnership body through a process to establish a shared vision and policy agenda that prioritizes school mental health.

Funding could be used toward a state-level coordinating position or to purchase facilitation and meeting services to convene and manage multiagency meetings, facilitate visioning, and support implementation of action plans. By creating an accountability structure, fostering open communication, and sharing data and knowledge across child-serving agencies and their partners, states can identify synergies, best practices, and innovative solutions to school mental health that might not be apparent within the confines of individual agencies. To facilitate this partnership process, the School Health Assessment and Performance Evaluation (SHAPE) System offers a free State School Mental Health Profile that supports cross-sector partnerships in mapping school policies, funding, and programming, as well as a CSMHS state policy map that links to key state-level CSMHS policies and information. School mental health investments can also fund messaging campaigns to state and local constituencies that create engagement in and support for a unified vision and actions to advance school mental health.

Since the pandemic began, states have enacted legislation that advances CSMHS, including expanding the school mental health workforce and pipeline, promoting mental health literacy and life skills in the student curriculum, and providing access and funding for mental health screening and services to students (24). Investments can support the convening of a cross-sector team, including child-serving agency leadership and youth and family leaders and advocates, to analyze the strengths and areas for improvement in existing laws and regulations, identify bipartisan legislative champions, and advance CSMHS policy in opportune areas.

School mental health is inherently cross-sectoral, at a minimum across the fields of education and behavioral
health.

The 2023 School Mental Health State Legislative Guide, published by the Hopeful Futures Campaign (24), offers a road map to successful state legislation. States may invest in policy analysis experts and advocacy partners to scan legislative opportunities, write legislation, and advocate for desired state and local policies. By promoting an inclusive and participatory approach, this effort ensures that policies are tailored to the unique needs of each state’s diverse student population.

School mental health is inherently cross-sectoral, at a minimum across the fields of education and behavioral health. The current funding available to SEAs and LEAs could be used to plan for strategic cross-sector braiding and blending of funds to support CSMHS. Braid-and blend funding is an approach that allows educational institutions and mental health service providers, as well as other child-serving organizations, to combine various funding sources to create a more comprehensive and effective support system for students. Braiding funds typically involves pooling monies from multiple awards, such as federal, state, and local grants, as well as from private contributions, to support specific mental health initiatives in schools.

For example, a school district may secure funds from the state health department for counseling services, collaborate with a community organization that receives foundation funding for mental health education, and involve local business to sponsor outreach. By doing so, the district can access a wider array of resources to address the complex and diverse needs of its student population, including counseling, therapy, and prevention programs.

Blending funds entails harmonizing different funding streams into a single, unified program or service. This approach streamlines the management of resources and minimizes administrative burdens, making it easier for schools
to provide coordinated MTSS. For example, a state may encourage districts to

By blending funds, schools can seamlessly integrate various services, such as academic support, social-emotional learning programs, and crisis intervention, to create a holistic approach to student mental health.

combine both government grants and private foundation funding to establish a comprehensive community-partnered program that offers direct counseling and after-school mental health support. By blending funds, schools can seamlessly integrate various services, such as academic support, social emotional learning programs, and crisis intervention, to create a holistic approach to student mental health.

Both braiding and blending funds emphasize the importance of collaboration among different stakeholders, such as schools, local mental health agencies, and community organizations, to create a unified mental health support network for students. Tools to facilitate this process include the AGA’s guide for policy makers and practitioners to support school-focused blending and braiding efforts and the Education Commission of the States’ policy brief on state funding for school mental health (25, 26)

Schools are well positioned to use Medicaid funding to support student behavioral health through revenue for services delivered by district-employed providers. In 2014, the Centers for Medicare and Medicaid Services (CMS) clarified that Medicaid can pay for health and behavioral health services delivered in schools to Medicaid-enrolled students who do not have an individualized education program (27). To take advantage of this support, states need to update policies and practices and, in most cases, amend their state Medicaid plan, which several states have already done (28). As required under the BSCA, in May 2023, CMS released “Delivering Services in School-Based Settings: A Comprehensive Guide to Medicaid Services and Administrative Claiming” (29), a landmark resource that guides state Medicaid and CHIP agencies and LEAs in delivering school-based services (including mental health and substance use) in a manner that allows LEAs to maximize reimbursement, including flexibilities that encourage states to ease administrative burdens on school-based health care providers. State school mental health funding may be used to support a state interagency task force to guide and support school Medicaid program expansion and implementation. School Medicaid reimbursement may improve schools’ capabilities to establish and maintain collaborations with community partners who can provide school-based mental health programs and services. Expansion of Medicaid reimbursement will mostly increase coverage for early intervention and treatment services, but it may also free up funding for universal promotion and prevention activities if states make a concerted effort to do so.

States can use current funding to invest in infrastructure that will facilitate the expansion of school Medicaid and funding sources. For example, funds may be used to establish a statewide platform to support school Medicaid programs and a comprehensive approach to training and equipping the individuals and systems involved, including school administrators, health care professionals, Medicaid coordinators, and educational staff. Training should cover the intricacies of Medicaid regulations, data management, privacy and security compliance, and the specific requirements for delivering health care services in a school setting. Schools must ensure that they have the necessary technology and systems in place to efficiently manage Medicaid claims and track student health records while adhering to data security protocols. CMS, in partnership with the U.S. Department of Education, recently established a technical assistance center on Medicaid and school-based services to expand the capacity of state Medicaid agencies, LEAs, and school-based entities to deliver Medicaid-funded services in schools.

Training should cover the intricacies of Medicaid regulations, data management, privacy and security compliance, and the specific requirements for delivering health care services in a school setting.

Funding may also go toward establishing or enhancing behavioral health care sites in schools. Lowering cost barriers to the establishment of school-based health centers by issuing grants to LEAs and school-based community providers is a proactive step toward helping schools and community organizations overcome the initial hurdles associated with setting up health care facilities on school premises (30). By covering startup costs, such as infrastructure development, medical equipment, and staff training, these grants facilitate the swift implementation of these health centers. Investing in telehealth technology and training for school mental health providers also prepares them to deliver digitally enabled supports, including those reimbursable by Medicaid (31).

States and local communities would benefit from more robust and integrated data systems that collect general medical health, mental health, and education data from schools and students and support cross-sector communication and data integration. Data systems that track student mental health more broadly (e.g., the Youth Risk Behavior Survey and school climate surveys), as well as those that collect real-time data to inform intervention planning and measurement-based care approaches, are both warranted and require unique infrastructures. Current school mental health efforts are often limited by an outdated data infrastructure that does not facilitate communication across education and health care providers, inform data-driven decision making about student mental health, or document the impact of investments and programming on student outcomes. Furthermore, mental health and school climate data are typically housed outside of state reporting or accountability systems, which disincentivizes district and school leaders from prioritizing mental health. With appropriate permissions and privacy safeguards in place, student-level data, such as attendance, classroom behavior, grades, social-emotional competencies, and health status, can be compiled in student information systems inputted by diverse providers and educators to promote coordination and communication. SEAs and LEAs would be wise to direct short-term COVID-19 relief and youth mental health crisis funding toward establishing and enhancing data systems and then supporting (usually less expensive) ongoing maintenance costs once that funding diminishes. States would also benefit from collecting and leveraging available data to demonstrate the positive impact of COVID-19 relief funding on school data systems to advocate for continued investment in this technology infrastructure.

States and local communities would benefit from more robust and integrated data systems that
collect general medical health, mental health, and education data from schools and students and support cross-sector communication and data integration.

Because of the local nature of education and the fragmentation of funding to support CSMHS within SEAs and LEAs, school mental health efforts are often not organized or unified among, or even within, districts in the same state. Although it is essential that systems of school mental health support are tailored to local communities, centralizing some aspects promotes efficiencies and reduces redundancies. For example, states could invest in the establishment or enhancement of state academic standards, to include social-emotional learning and mental health content (e.g., suicide prevention and mental health literacy) by supporting convenings of educators and other experts for development and review. States may also bolster the quality of programming across MTSSs in schools by developing a compendium of effective programs and practices across tiers and then offering training and ongoing implementation support to LEAs and school staff. Finally, SEAs or another statewide entity can provide technical assistance to districts as they establish and improve their CSMHS efforts, including guidance on conducting universal mental health screening and referral procedures, establishing memoranda of understanding between schools and community behavioral health providers, and managing mental health crises in schools.

Although it is essential that systems of school mental health support are tailored to local communities, centralizing some aspects promotes efficiencies and reduces redundancies.

Some states, including Connecticut, Iowa, Massachusetts, and South Carolina, have recently used COVID-19 relief and other funds to establish state school mental health technical assistance and training centers or consortia. As a result of their centralized approaches, each of these states has experienced a broader implementation of evidence-based school mental health prevention and intervention practices; a more consistent statewide MTSS framework; and cross-district sharing of innovation, best practices, and resources. In addition to centralizing technical assistance and professional development support at the state level, an intentional focus on improving bidirectional communication between SEAs and LEAs benefits both agency types. SEAs need LEAs for obtaining local data and gaining frontline knowledge and expertise, and LEAs need to know that SEAs are responsive and working in the best interest of LEAs. State technical assistance and training efforts can use and expand on national resources to facilitate application within specific state and local contexts. For example, purveyor organizations in Massachusetts and Connecticut drew on National Center for School Mental Health and SHAPE System resources to offer guidance documents to their state and local communities about the application of national CSMHS best practices within their states’ funding, legislative, and practice landscapes (32, 33).

By creating safe and nurturing environments that prioritize students’ emotional well-being, schools can play a vital part in addressing the youth mental health crisis and ensuring that students receive the help and support they need to thrive academically and emotionally. States and local communities can take steps to spend funding made available to advance school mental health by investing in activities and infrastructure that promote sustainability. Developing cross-sector partnerships that cultivate a shared vision and funding, expanding school Medicaid, establishing or enhancing data systems, and creating state technical assistance supports are all prudent steps that can help carry school mental health beyond the impending funding cliffs. Incorporating these strategies into state and local strategic plans that extend beyond the current funding opportunities will position education systems to allocate future funding toward these goals.