Today, the U.S. Senate approved a federal scholarship tax credit as part of the massive "One Big Beautiful Bill." The legislation is modeled after successful tax credit scholarship programs at the state level and is a modified version of the Educational Choice for Children Act (ECCA).

• The bill allows for a 100% non-refundable tax credit for donations from individuals to scholarship granting organizations (SGOs). Those tax credits are capped at $1,700 per taxpayer.

• Donations can come from individuals in any state, but SGOs can only provide scholarships in their state. Crucially, each state must choose to opt-in for SGOs in that state to be able to provide scholarships through the program.

• Scholarship recipients must come from families earning under 300% of median income by area. Scholarship funds can be used for tuition, tutoring, special needs services, education technology, books, supplies, transportation, and other purposes.

• The legislation that passed the Senate did not include language originally in the bill explicitly protecting private school autonomy and religious liberty, a casualty of the arcane Senate reconciliation process.

The legislation now goes to the House of Representatives.

Yesterday, the U.S. Department of Education notified chief state school officers that the release of $6.8 billion in federal education funding expected on July 1 will not occur. The following programs are affected:

• Title I-C for migrant education ($375 million) 
• Title II-A for professional development ($2.2 billion) 
• Title III-A for English-learner services ($890 million) 
• Title IV-A for academic enrichment ($1.3 billion) 
• Title IV-B for before-and after-school programs ($1.4 billion)

Title I-A for low-income students and the Individuals with Disabilities Education Act were spared.

According to news reports, the notice from the Department said: “Decisions have not been made concerning submissions and awards for this upcoming academic year. Accordingly, the Department will not be issuing Grant Award Notifications obligating funds for these programs on July 1 prior to completing that review.”

On March 28, 2025, the Department of Education announced that the time period to liquidate obligations under the Education Stabilization Fund would end immediately. That decision was challenged in court and ultimately enjoined. On June 26, 2025, the Department announced that "all States can continue to liquidate funds per any previously-approved liquidation extensions for ESF programs in place prior to March 28, 2025 during the pendency of this litigation and unless and until the Department is allowed to uniformly apply the policy described in the March 28 letter to all States."

Read more here.