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Developments in washington could reshape education priorities
Welcome to the first monthly edition of our Aligned newsletter since the close of the 2025 legislative sessions.
As states take more of a lead in education policy, we’re keeping a close eye on Washington, where several federal developments — some final, others still unfolding — could have ripple effects across state education systems. Let's take a moment to do a quick roundup of key federal actions we’ve previously covered and where they stand now.
Supreme Court leaves religious charter question unanswered
In early May, we discussed the impending religious charter school case before the nation’s highest court.
On May 28, the U.S. Supreme Court issued a 4-4 decision in Oklahoma v. St. Isidore of Seville Catholic Virtual School, declining to hear an appeal that would have determined whether religious institutions can operate public charter schools.
With Justice Amy Coney Barrett recused, the Court let stand a ruling from the Oklahoma Supreme Court blocking the school from opening.
The result? No national precedent was set, but the lower court ruling stands. For now, charter schools remain public entities subject to constitutional limits, not private schools eligible for religious exemptions.
The question of religious charter schools is likely to return to the courts in the future, but the immediate takeaway is that the status quo holds.
Child tax credit at the center of budget negotiations
Federal lawmakers are also negotiating major tax and spending legislation — dubbed the “Big Beautiful Bill” — that could reshape key support for families.
One central issue: the future of the child tax credit.
Under current law, the 2017 expansion of the credit from $1,000 to $2,000 is set to expire after 2025.
- The House passed a bill raising the credit to $2,500 from 2025 through 2028, with a return to $2,000 (adjusted for inflation) thereafter.
- The Senate version would permanently set the credit at $2,200 starting in 2025, also with inflation indexing.
Both versions would provide more support than current law but differ in structure and longevity.
Interested in learning more about the child tax credit? Check out our recent blog on the subject here.
Student loan repayment overhaul proposed
The Senate proposal also includes sweeping changes to federal student loan repayment plans. The bill would reduce the number of repayment options and create a new income-based “Repayment Assistance Plan,” with monthly payments ranging from 1% to 10% of income.
Loan forgiveness would take longer to reach — up to 30 years — and key deferments for unemployment and economic hardship would be phased out for new loans starting in 2025 or 2026.
Although supporters argue it provides predictability for borrowers, critics caution that extended forgiveness timelines could increase long-term federal costs. There’s growing bipartisan interest in ensuring that colleges are held accountable for student outcomes and that any reforms promote both financial responsibility and taxpayer transparency.
Career and technical education programs on the move
One lesser-known but potentially far-reaching federal development: the U.S. Department of Education has agreed to shift oversight of several major career programs — including workforce development grants and short-term credential pathways — to the U.S. Department of Labor. Parts of the federal student loan servicing system are also slated for transfer to the U.S. Treasury Department.
However, these plans are on hold due to a federal injunction blocking the Trump administration’s efforts to reduce the U.S. Department of Education’s workforce.
The bottom line for states: oversight of key workforce and grant programs may be on the move, with implications for how funding is distributed and managed in the years ahead.
Aligned's Take: These federal debates may feel far from the classroom, but the policy changes in play could have significant downstream impacts. We’ll continue tracking these issues as negotiations progress.
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