HR 1, entitled the “One Big Beautiful Bill” Act (OBBBA), was signed into law by President Donald J. Trump on July 4, 2024. The new law changes federal funding in important areas, including education, healthcare, and food policy. Not all these changes will take effect immediately; some will occur over the next few years. The Professional Educators of Tennessee has provided a summary below of the federal update, entitled “One Big Beautiful Bill.” This update includes the latest school-related policies and information.
Federal Voucher Program
OBBBA creates a national tax credit private school voucher program. Components of the proposed federal tax credit voucher include:
- One-to-one tax credits for donations to scholarship grant organizations, with no cap on the total amount that can be spent on the program. Donations are capped at $1,700 for individuals.
- Students are eligible to receive a private school voucher scholarship if they are a member of a household with an income no greater than 300% of the median gross income in their area and if they are eligible to attend a public elementary or secondary school.
- Vouchers can be used for private school tuition and curricular materials, books, or other instructional materials, online educational materials, tutoring, or other educational services comparable to education savings accounts.
- OBBBA includes no accountability or reporting requirements for participating private schools.
- The voucher launches in January 2027, and the program has no end date. States must opt in to the program via their governors or other state officials. States are also responsible for reviewing the scholarship-granting organizations (SGOs). Federal voucher recipients will be able to participate in both federal and state voucher programs simultaneously.
- A last-ditch effort to remove the voucher program from the OBBBA failed by one vote.
Pell Grants
OBBBA allows Pell Grants to be used to cover the costs of specific short-term workforce training programs. Although a proposed change to credit-hour eligibility minimums was not included in the final bill, students who receive other scholarships or grants that cover the full cost of college attendance are ineligible for Pell Grants.
Federal Student Loans
OBBBA imposes new federal student loan lifetime borrowing limits for graduate and professional degree programs. The law also modifies repayment programs and eliminates some current deferment and low-cost repayment options, potentially resulting in higher federal loan payments for some students. Many educators rely on student loans to help cover the cost of earning their degrees.
Medicaid & SNAP
- OBBBA has a significant impact on Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Changes include new eligibility certification and work requirements for Medicaid recipients, as well as new SNAP eligibility requirements.
- School districts rely on Medicaid to cover various services, including health staff, resources, and services for children with disabilities. Changes to SNAP eligibility requirements could make it more difficult for schools and districts to certify students as eligible for free and reduced-price meals directly.
