The program uses the Federal Tax Act to provide vouchers that students can use to attend private secular or religious schools and to qualify for education.
R-La. “Parents should decide where their children go. This bill can help them do that,” Senator Bill Cassidy said in a statement.
The Senate changed the original House proposal and now requires states to choose the plan, making it a real national plan. The support of the Blue Country is rarely supported by countries that may not be able to participate, even in more conservative states, with different support – voters recently rejected school voucher voting measures in Kentucky and Nebraska.
This may be partly due to concerns that credentials may harm local public resource schools, as students will raise funds with them when they leave the public school system.
“It’s not just a policy failure, it’s a moral shame,” Becky Pringle, president of the National Association for Education, the largest U.S. teacher alliance, said in a statement. “Trump and Congressional Republicans have undermined our public schools and every student in it.”
The new federal program will reward those who donate to the so-called Scholarship Awarding Organization (SGO). Their reward: a one-dollar tax credit.
SGO will then allocate donations in the form of scholarships for students to spend a range of expenses, including tuition, books and certain family education costs.
Unlike some of the country’s earliest smaller voucher programs, the federal version is not limited to low-income households. Instead, it will apply to households with 300% or less than 300% of the median total income in a given area. Therefore, in the region where the median total income of the country is $75,000, any child in any family with a income below $225,000 can qualify.
The cost of such a program is difficult to measure, especially in the case of opt-in warnings, where the state decides whether to participate. However, the Joint Committee on Nonpartisan Taxes estimates that in the next decade, vouchers could cost the federal government tax losses.
Medicaid Changes and K-12 Schools
More than 37 million children are enrolled in Medicaid or Child Health Insurance Program (CHIP), a federal program that provides affordable health insurance for pregnant mothers and children living on Medicaid poverty rates.
“One Large Bill” introduces strict Medicaid eligibility requirements, including more frequent eligibility verification and the first-ever state job requirement, despite tax exemption from parents of children 13 and under.
It also cut federal health spending by about $1 trillion, according to the nonpartisan Congressional Budget Office (CBO).
As NPR previously reported, national experiments with job requirements plagued administrative issues such as coverage of paperwork issues and budget overspending by eligible enrollers.
How will all of this affect K-12 students?
Joan Alker, head of the Center for Children and Family at Georgetown University, told NPR before the bill passed.
The CBO estimates that nearly 12 million people will lose health coverage due to changes in the final bill.
Medicaid is also the fourth largest source of funding for K-12 schools, according to the Association of School Principals (AASA). Schools receive money to help provide services to low-income students engaged in Medicaid or bargaining chips, as well as students with disabilities.
In a survey released earlier this year, AASA asked more than 1,000 school district leaders from all 50 states and the District of Columbia how Medicaid funds are used. The vast majority of regions (86%) say Medicaid funds pay school health workers such as nurses, psychologists, occupational and physical therapists, and speech-language pathologists. More than half of Medicaid helps fund mental and behavioral health services in school districts.
When asked how their district responded to the loss of funds, 80% of respondents predicted layoffs of school health workers, and more than half were expected to reduce students’ services and resources.
Cutting food aid will also affect eligibility for free school meals
According to the U.S. Department of Agriculture, the Supplementary Nutrition Assistance Program (SNAP) helps pay for groceries for 15 million children in the U.S., with significant changes to come in the coming years.
“One Large Bill” reduces the number of people exempt from Snap’s job requirements. Before the bill passed, Katie Bergh, a senior policy analyst at the Center for Budget and Policy Priorities, told NPR before the bill passed: “Research repeatedly shows that [work requirements don’t] Increase people’s employment. It won’t increase their income. It just cuts off people’s snapshots and makes them hungry. ”
When children lose the opportunity to get snapshot benefits, they will also lose the free meals to be automatically admitted to school.
The CBO said the new law will cut about $186 million from SNAP within 10 years. Bergh’s organization estimates: “About 1 million children will see massive cuts or terminations in food aid to their families.”
For the first time in SNAP’s history, the federal government has also transferred some of these costs to states.
This kind of funding shift from the federal government to states is a good idea, and it is “controversial”, Kevin Corinth conducted a study on the poverty and safety net program (AEI) of the conservative American Enterprise Institute (AEI) before the bill was passed. Although he points to a potential upside: It could force states to “more skins in the game.”
A potential drawback for some states “will modify benefits or eligibility or may leave [SNAP] Due to the increase in costs, in short. ”
Increased child tax credit
“One large bill” brings a moderate tax credit for parents. Now, the child tax credit is $2,000 per child, which will rise to $2,200. However, it requires at least one parent and all qualified children to provide a valid Social Security number.
And, like the current child tax credit, this expansion is only available to families with sufficient income and therefore cannot qualify for low- and middle-income households.
What to know about major changes in federal student loans
The law will press the reset button in accordance with the federal student loan policy.
For graduate students, the new loan limit will make it more difficult for low- and middle-income borrowers to attend higher-priced graduate programs. The old Graduate Plus program allows students to borrow the fees for their graduate school courses, which will be closed on July 1, 2026. After that, borrowing for graduate students will be $20,500 per year, and the lifelong graduate student loan limit is $100,000, with a sharp drop in CAP before the previous price to $138,500.
Borrowers dedicated to professional graduate degrees (IE School of Medicine or Law) will be borrowed at $50,000 per year, with a lifetime limit of $138,500 to $200,000.
Parents and caregivers who use loans to help students pay for college will also see new loan limits. They will cap each year at $20,000, totaling $65,000 per child.
The law also sets new lifelong loan limits and Graduate loans, $257,500 per person.
Republicans also agreed to make major changes to repayment plans and phase out most of them, including the generous Biden-era preservation plan.
After July 1, 2026, new borrowers will have only two repayment options: 1. ) A new income-based plan that requires borrowers to pay at least $10 per month and provide loan cancellation after 30 years of repayment, or 2) a new standard repayment plan with fixed monthly payments over 10-25 years – the greater the debt, the longer the repayment amount.
There will be more options at least for the time being, and there will be no doubt that this will confuse between borrowers and loan service companies, which will have more options, and these companies will have more options. You can find a more detailed explanation of these people here.
Change the Pell Grant for Low-income College Students
The bill expands Pell Grant, which helps low-income students pay for colleges, including job training programs, which is a win for community colleges that offer a variety of certificate programs. It also adjusts the eligibility of all Pell recipients: Starting in July 2026, students with full ride scholarships will no longer be eligible for Pell Grants. The bill also provides full funding for the existing Pell Grant shortage.
University Responsibility Income Test
To inspire universities to provide a good return on investment, the bill connects schools’ access to federal student loans to graduates’ income.
If the undergraduate program fails to pass the income test (which means their students earn less than those with high school diplomas), you may lose the opportunity to obtain a federal loan. One analysis shows that this will have the greatest impact on two-year associate degree program, although federal data suggest community college students are less dependent on federal student loans.
The steps followed by similar regulations formulated by the Obama administration and reissued under Biden are called the paying employment rules.
The final version of the new accountability policy is related to the House version – the draft includes a risk-sharing program in which universities will pay fines based on federal loan debts their students fail to repay.
Higher taxes on university donations
Now, universities with donations will be taxed at higher rates.
The bill raises the tax rate from 1.4% to 8%, depending on the university’s donation.
Harvard University is currently making several legal battles with the Trump administration, totaling more than $52 billion. Under the formula of the new law, the formula puts Harvard in the highest donation tax, which is an endowment tax of more than $2 million per family student.
Small private universities have a statue: Institutions with less than 3,000 students are exempt from taxes. The previous waiver was 500 students.
