In June 2020, facing a large projected budget shortfall, the state decided to defer $12.5 billion in payments to schools and community colleges. Beginning in summer 2020, our office set out to discover how community colleges were responding to these payment deferrals. We learned that about two-thirds of college districts have sufficient local reserves and internal borrowing options to accommodate the deferrals, whereas about one-third are planning to borrow externally. In November 2020, our fiscal outlook reports showed a much-improved budget situation, with state revenues and K-14 funding requirements much higher than estimated back in June. In light of the improved fiscal situation, this post provides two options for eliminating some or all of the K-14 payment deferrals through either immediate midyear action or as part of the 2021-22 budget process.