Federal Update: "One Big Beautiful Bill" Act, Summary
- Legislative Team
- 24 minutes ago
- 3 min read
Congress is considering the One Big Beautiful Bill Act (OBBBA), a budget reconciliation bill that seeks to make significant federal funding changes in many areas, including education, healthcare, and food policy. The US House approved its version of OBBBA in May, and the bill has moved to the Senate, which is now debating changes reflecting the priorities of its members. Once approved by the Senate, both chambers must resolve differences before the bill achieves final passage.
PAGE has summarized potential school-related policy changes based on available information, as of June 27. The final version of the bill will likely contain additional changes. PAGE continues to monitor developments and will update this summary after the bill’s final passage.
Federal Voucher Program
The House version of OBBBA would create a national tax credit private school voucher program similar to Georgia’s Qualified Education Expense Tax Credit voucher program. Components of the proposed federal tax credit voucher include:
One-to-one tax credits for donations to scholarship grant organizations, up to a national cap of $5 billion annually under the House version and $4 billion per year under the Senate.
Donations are capped at 10% of a taxpayer's adjusted gross income for the taxable year, or $5,000. If 90% of total tax credits are used in a calendar year, the cap increases to 105% in the subsequent year.
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.
OBBA includes no accountability or reporting requirements for participating private schools.
The House version of the tax credit voucher would run from 2026 through 2029. The Senate version would launch in 2027 and has no end date,
A Senate parliamentary decision on June 27 determined that including the voucher program breaches Senate budget reconciliation rules, raising uncertainty about the inclusion of OBBBA voucher tax credit provisions.
Pell Grants
The House version of OBBBA would significantly change Pell Grants, which provide federal financial assistance to low-income students to help cover college costs. These changes include increasing the number of credit hours required to earn the full grant amount and introducing a credit hour minimum to receive any Pell Grant support. These restrictions are not present in the Senate version of the bill.
Narrowing Pell grant eligibility could hurt low-income students' ability to afford higher education, potentially impacting educator preparation programs and the educator pipeline.
Federal Student Loans
Many educators rely on student loans to help cover the cost of earning their degrees, and through the OBBBA, both the House and Senate propose changes to existing loan programs and loan repayment programs.
The House version would end the subsidized loan program for low-income undergraduate students, while the Senate version currently does not eliminate the program.
Both versions of OBBBA include new federal student loan lifetime borrowing limits, though amounts vary between chambers. The bill would modify repayment programs and remove some current deferment and low-cost repayment options, meaning some students may have higher federal loan payments.
Medicaid & SNAP
The House and Senate versions of OBBBA would significantly change Medicaid and the Supplemental Nutrition Assistance Program (SNAP). These changes include new eligibility certification and work requirements for Medicaid recipients and 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 directly certify students as eligible for free and reduced-price meals.