The SCHOOL Act of 2025 amends the Elementary and Secondary Education Act and the Individuals with Disabilities Education Act to require State educational agencies, “to the extent permitted under State law,” to allocate covered federal K–12 grant funds so the money follows the student. For public-school students the bill directs funds to local education agencies based on headcounts; for students enrolled in private schools or home schools it directs the state to place the per‑child amount into education savings accounts for each eligible child.
This is a structural change to federal K–12 grant flow: instead of categorical grants remaining with LEAs and schools, covered federal dollars would be disbursed on a per‑child basis to districts or individual accounts. That reallocation could alter district budgets, program targeting (including Title I and IDEA services), and state administrative responsibilities, while raising unanswered questions about how per‑child amounts are calculated and how statutory program requirements (especially services for children with disabilities) will be preserved.
At a Glance
What It Does
The bill requires State educational agencies to distribute funds from ESEA titles I, III, IV, V, and VI and from IDEA Part A so that funding follows each eligible child: LEAs receive sums for public-school enrolled children and the State issues education savings accounts for private‑ or home‑schooled children. States must collect annual enrollment notifications from parents and use those data only to calculate and distribute allocations.
Who It Affects
State education agencies and LEAs will need new enrollment reporting and distribution systems; parents who choose private or home schooling would become direct recipients of federal funds via education savings accounts; private education providers, tutors, and ed‑tech vendors could receive more direct business from ESA dollars; students with disabilities and the agencies that deliver special education services face altered funding pathways.
Why It Matters
By converting categorical federal grants into per‑child allocations and ESAs, the bill changes the basic fiscal relationship between federal funding and local districts, potentially shrinking consolidated school budgets and altering how targeted federal supports are delivered and verified.
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What This Bill Actually Does
The bill inserts a new Part H into Title VIII of the ESEA and adds a parallel provision to IDEA Part A that together require States to make covered federal K–12 grant funds follow the child. For covered ESEA titles (I, III, IV, V, and VI) the State education agency must calculate an amount available per eligible child in the State and multiply it by the number of eligible children each LEA serves; the same per‑child amount must be placed into education savings accounts for children who attend private schools or are homeschooled.
The IDEA amendment applies the same construct to children eligible for special education services under that Act.
Operationally, the bill places the burden on LEAs to report, annually and on a State‑determined date, counts of eligible children enrolled in public schools and of private and home‑schooled children within the LEA’s district. Parents must also annually notify the relevant LEA of the child’s intended placement (public, private, or home).
States must use information collected under the statute only to calculate and distribute funds; the text expressly limits other uses of those data.The statute lists a broad set of allowable expenditures for education savings accounts—curriculum, books, technology, online materials, tutoring, private tuition, extracurriculars, testing and diagnostic tools, and educational therapies for students with disabilities. At several points the bill underscores program integrity constraints: distributions must “supplement, not supplant” non‑Federal funding (referencing the ESEA’s method of determination) and section 1116’s private‑school participation rules apply.
The bill also includes a rule of construction that preserves eligibility for federally supported school meals and bars any authorization of Federal or State control over non‑public education providers.Several implementation wrinkles are left to States. The text repeatedly conditions the mechanism “to the extent permitted under State law” and does not specify how to compute the “amount available for each eligible child,” how to handle mixed funding streams and categorical program formulas, or how IDEA’s obligations for a free appropriate public education (FAPE) and IEP services will be operationally satisfied for students who receive ESA funds and are enrolled outside the public district.
Those gaps will be the focal points for rulemaking, state legislation, and potential litigation if the bill advances.
The Five Things You Need to Know
The bill directs States to apply a “funds to follow the student” model to ESEA titles I, III, IV, V, and VI and to Part A of IDEA.
For ESEA purposes an “eligible child” is defined as any child aged 5 through 17; IDEA uses the Act’s existing definition of a child eligible for special education.
States must place the per‑child amount for private‑ or home‑schooled children into education savings accounts and provide LEAs with a per‑child sum for public‑school students.
Distributions must be made in a way that “supplement[s], not supplant[s]” non‑Federal funding (referencing section 1117) and section 1116’s private‑school participation provisions apply.
The statute permits ESA dollars to cover tuition, curricular materials, tutoring, diagnostic tools, extracurriculars, and educational therapies for students with disabilities, among other uses.
Section-by-Section Breakdown
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Short title — SCHOOL Act of 2025
This single provision gives the bill its public name, “Support Children Having Open Opportunities for Learning Act of 2025,” and has no operational effect beyond the short‑title designation used for citation.
Creates 'Funds To Follow The Student' framework for covered ESEA titles
The new Part H requires State educational agencies to reallocate funds from specified ESEA titles so that the money follows each eligible child. The SEA must calculate the per‑child amount available in the State and allocate sums to LEAs for students attending public schools while placing the same per‑child amount into education savings accounts for private‑ or home‑schooled children. The provision is expressly conditioned on what State law permits, which makes implementation dependent on state statutory and constitutional rules.
Allowable ESA uses, annual notification, and LEA reporting
The statute lists permissible ESA expenditures that range from curriculum and technology to private tuition and therapies, signaling broad flexibility for families. It requires an annual parental notification process and compels LEAs to report counts of eligible children (public, private, and home school) to the SEA on a State‑determined date so the SEA can allocate funds. The SEA must use collected data only to calculate and distribute funds.
Distribution mechanics, program integrity, and limits
LEAs that receive funds must allocate them to public schools based on eligible‑child enrollment and in a manner that supplements, not supplants, existing non‑Federal resources (the bill references section 1117’s method). The statute applies section 1116’s private‑school participation rules to this new framework, preserves eligibility for federally funded school lunch programs, and contains an explicit prohibition against authorizing Federal or State control over non‑public education providers.
Parallel 'funds to follow the student' rule for special education funding
The bill adds a closely parallel provision to IDEA Part A directing States to allocate IDEA funds so they follow children eligible for special education. Definitions and mechanics mirror the ESEA changes, but the eligible population is children entitled to services under IDEA, and allowable ESA uses explicitly include educational therapies for students with disabilities. The text does not, however, resolve how statutory obligations such as FAPE and IEP implementation will be met when federal IDEA dollars are routed to ESAs for non‑public placements.
State‑law limitation and data‑use restriction
Two recurring constraints matter for implementation: the shifts are required only “to the extent permitted under State law,” giving states room to reject or modify the approach; and States must use enrollment data solely for allocation and distribution purposes. Neither constraint fully resolves privacy, oversight, or legal preemption questions that are likely to arise when states rework allocation formulas and administrative systems.
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Explore Education in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Parents who opt for private or home schooling — They would receive federal per‑child dollars directly into education savings accounts, increasing families’ purchasing power for tuition, tutoring, curricula, or therapies.
- Private schools, tutors, and educational service providers — Receiving ESA dollars can expand the customer base and reduce reliance on family outlays, potentially increasing enrollment and revenue opportunities.
- Ed‑technology and curricular vendors — With ESAs allowed to cover tech and online materials, vendors could see more direct transactions from families rather than sales routed through districts.
Who Bears the Cost
- Local educational agencies and public schools — Districts risk losing portions of federal grant revenue as funds shift to ESAs, potentially reducing budgets for shared services, staffing, and targeted supports that depend on pooled federal dollars.
- State education agencies — SEAs must build enrollment‑reporting, ESA‑administration, and distribution systems and will bear the administrative burden and costs of compliance, verification, and new fiscal controls.
- Low‑income and high‑need students within struggling districts — If per‑child federal dollars move with students or to ESAs, concentrated funding for programs that serve high‑need schools could be diluted, undermining targeted interventions.
Key Issues
The Core Tension
The bill pits parental choice and direct family control of federal education dollars against the federal policy aim of targeting and pooling funds to meet collective programmatic responsibilities—particularly for high‑need populations and legally mandated services under IDEA. Routing money to families increases flexibility but undermines the mechanisms that ensure concentrated funding, program integrity, and enforceable public obligations.
The bill converts categorical federal grants into per‑pupil allotments but leaves the critical mechanics undefined. It does not specify how the “amount available for each eligible child” is calculated across multiple covered titles with different formulas, nor how funds that are intended for targeted populations (for example, Title I’s focus on low‑income students) will retain their targeting when routed by simple headcount.
The cross‑reference to section 1117’s method of determination and the application of section 1116’s private‑school participation rules create compliance touchpoints, but the statute does not map out the reconciliation process between programmatic requirements and the ESA model.
The IDEA parallel raises particularly thorny questions. IDEA imposes enforceable obligations on public agencies to provide FAPE and to ensure IEP implementation; routing IDEA funds into private ESAs or home settings risks creating a funding stream without the accompanying service delivery framework or legal safeguards.
The bill allows ESA dollars to pay for “educational therapies,” but it does not establish how IEP services will be guaranteed, monitored, or enforceable when the child is outside the public system. Data and privacy protections are limited to an assertion that collected enrollment information be used only for allocation; the statute is silent on audit rights, safeguards against misuse, or remedies for inaccurate reporting.
Finally, the repeated qualification “to the extent permitted under State law” shifts the fight to the states and raises administrative complexity: some states will need new statutes to comply; others may lack authority to redirect federally designated funds; and a patchwork of state responses will create uneven access to ESAs and variable impacts on district finances. Those unresolved implementation choices create a high probability of litigation and varied practical outcomes across jurisdictions.
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