One Big Beautiful Bill Act Fails Students and Our Education System

Washington, DC—New America’s Education & Work programs are deeply concerned by the House and Senate passage of the sweeping tax and spending bill, the One Big Beautiful Bill Act (OBBBA).[1] Once signed into law by President Trump, this legislation will set back our American education system, as well as the health and well-being of students, families, and workers.

Not only will the OBBBA add trillions to an already ballooning deficit, it does so in part by cutting funding for services that support families, federal financial aid for higher education, and safety net programs for low-income families and people with disabilities. With nearly $350 billion in cuts to education (close to $300 billion of this to higher education and the student loan repayment system), $287 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP), and $900 billion in cuts to health programs, including Medicaid and the Affordable Care Act, the OBBBA makes the intersection of education and health policy clear. In addition, the bill adds the nation’s first federal voucher program to pay for private schools, by way of a permanent and unlimited tax shelter, and completely upends the higher education system.

The OBBBA fails students and threatens the future of public education in our country. New America has outlined our leading concerns below:

The OBBBA will disrupt early learning programs and burden parents of young children.

• While the bill slightly raises the child tax credit amount, an estimated 4.5 million children will not benefit from the credit because the bill requires parents claiming it to have their own Social Security numbers.
• Cuts to Medicaid would impact the 28 percent of early educators who rely on it for health care. Provisions in the bill that require more frequent eligibility redeterminations and increased red tape will likely force early educators and their children off the program.

The OBBBA will force some students to learn on an empty stomach and without health care.

• Medicaid provides health care to nearly 30 million children, and SNAP ensures over 16 million children have access to food. Cuts to both SNAP and Medicaid will be devastating to tens of millions of children living in poverty; in addition, new requirements related to legal status could lead parents (regardless of status) to avoid the new paperwork required out of fear of unfair immigration enforcement. Research shows correlations among poor health, chronic hunger, and problems in school, such as absenteeism, tardiness, hyperactivity, and other factors, that adversely affect children’s ability to focus and achieve academically and socially.
• The cuts to Medicaid will affect providers of services to children and students with disabilities, who comprise 15 percent of school-age children aged 3 to 18, according to the National Center for Education Statistics. Parents of children with disabilities rely on Medicaid funding to cover services as wide-ranging as therapies for infants and toddlers with developmental delays to assistive technologies for children with hearing or vision impairments​.

The OBBBA will endanger student services and drain resources from public schools.

• Medicaid cuts mean schools will struggle to get reimbursed for services and supplies for students with disabilities required by law under the Individuals with Disabilities Education Act. Medicaid is the third-largest source of funding for K–12 public schools and funds nearly 30 percent of all early intervention (IDEA Part C) for infants and toddlers with disabilities.
• Restrictions in eligibility for Medicaid and SNAP will affect schools being able to draw down funding for meals. Medicaid and SNAP eligibility translates into free school meals for many children and into increased federal school lunch funding for many school districts.
• The cuts to Medicaid and SNAP also affect schools as a whole, regardless of meal provisions or support for students with disabilities. In many states, students' eligibility for Medicaid and SNAP are important for states' calculations of how much funding school districts need to serve students for low-income backgrounds. Unless those states get working on a fix fast, these federal cuts could threaten high-need school districts' state funding, as well.
• The Qualified Elementary and Secondary Education Scholarships—essentially a voucher program subsidizing up to $1,700 per taxpayer in private school tuition—divert federal money to private schools at a time when the administration is proposing steep cuts to K-12 public education. There is no cap on the amount of dollars that may be paid out through this program, creating a significant potential cost to the federal budget. But the voucher amount is still only a fraction of the average private school tuition cost in the United States, making it highly likely that it will only serve to provide a discount to families already paying for private schools but will do little to expand access to lower-income families. In doing this, it is similar to the other tax provisions in the bill—it provides a break to upper-income taxpayers at a time when the public system is facing serious cuts.

The OBBBA drastically changes the college affordability and accountability landscape.

• The bill puts the Pell Grant program at risk by opening it up to very-short-term programs with few meaningful guardrails.
• The bill takes meaningful steps to hold colleges accountable for ensuring students receive the earnings boost that should come with a college degree by cutting off failing programs from federal loans. But it continues to allow failing programs to access Pell Grants, lets certificate programs with the worst outcomes off the hook, and does nothing to address programs that leave students with unmanageable debt.
• The bill takes steps to streamline the loan repayment system for new borrowers and invest in the administration of the loan program but results in higher payments and fewer protections, especially for those with the lowest incomes.

New America’s Education & Work programs support a strong public education system and continually advocate for ways to improve it, but the reconciliation bill passed by the United States Congress will have far-reaching, negative impact on students and their families—from the earliest years of children’s lives through their entrance into postsecondary programs and the workforce.

Note: [1] At the time this statement was released, the official title of the bill was unclear because the words “One Big Beautiful Bill Act” were stricken from the Senate version. We are using this title and its acronym, OBBBA, until the official title is known.

###

For more on New America's growing collection of posts and statements on the impact of this bill, see here.

Media contact: Katherine Portnoy

About New America: New America is a think-and-action tank dedicated to renewing the promise of America in an age of rapid technological and social change. Our work prioritizes care and family wellbeing, advances technology in the public interest, reimagines global cooperation, builds effective democracy, and ensures affordable and accessible education for all. Learn more at newamerica.org.