119-s1244

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1244 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1244

 To amend the Elementary and Secondary Education Act of 1965 to allow 
 parents of eligible military dependent children to establish Military 
 Education Savings Accounts, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 April 1 (legislative day, March 31), 2025

 Mr. Cruz (for himself and Mr. Banks) introduced the following bill; 
 which was read twice and referred to the Committee on Finance

_______________________________________________________________________

 A BILL

 To amend the Elementary and Secondary Education Act of 1965 to allow 
 parents of eligible military dependent children to establish Military 
 Education Savings Accounts, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Education Savings Accounts for 
Military Families Act of 2025''.

SEC. 2. MILITARY EDUCATION SAVINGS ACCOUNTS.

    (a) In General.--Title VII of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7701 et seq.) is amended by inserting 
after 

section 7012 the following:

``

SEC. 7012A. MILITARY EDUCATION SAVINGS ACCOUNTS.

 ``

    (a) In General.--The Secretary of Education, in consultation with 
the Secretary of Defense, shall carry out a program under which the 
Secretary of Education shall--
 ``

    (1) at the request of a parent of an eligible military 
 dependent child, establish an account on behalf of such child 
 (to be known as a `Military Education Savings Account') into 
 which the Secretary shall deposit funds in an amount determined 
 under subsection
            (d) ; and
 ``

    (2) establish a procedure under which the parent of the 
 child may use funds in the account to pay for the educational 
 expenses of the child in accordance with this section.
 ``

    (b) Application.--
 ``

    (1) In general.--To be eligible to participate in the 
 program under this section for a school year, a parent of an 
 eligible military dependent child shall submit an application 
 to the Secretary in accordance with this subsection.
 ``

    (2) Application process.--In carrying out paragraph

    (1) , 
 the Secretary shall--
 ``
        (A) accept applications on a year-round basis and 
 establish procedures for approving applications in an 
 expeditious manner; and
 ``
        (B) create a standardized form that parents can 
 use to apply for the program and ensure that such form 
 is readily available in written and electronic formats, 
 including on a publicly accessible website.
 ``

    (3) Approval.--Subject to the availability of funds to 
 carry out this section, the Secretary shall approve the 
 application of a parent to establish a Military Education 
 Savings Account if--
 ``
        (A) the application is submitted in accordance 
 with the application process established by the 
 Secretary pursuant to this subsection;
 ``
        (B) the application demonstrates that the child 
 on whose behalf the Military Education Savings Account 
 is to be established is an eligible military dependent 
 child; and
 ``
            (C) the parent who submits the application enters 
 into a written agreement with the Secretary under which 
 the parent agrees--
 ``
            (i) to provide the child with instruction 
 in, at minimum, the fields of reading, 
 language, mathematics, science, and social 
 studies;
 ``
            (ii) to not enroll the child in a public 
 elementary school or a public secondary school, 
 on a full-time basis while participating in the 
 program;
 ``
            (iii) to use funds in the Military 
 Education Savings Account only for the purposes 
 authorized under this section; and
 ``
            (iv) to comply with all other 
 requirements of this section.
 ``

    (4) Renewals.--The Secretary shall establish a process 
 for the automatic renewal of a previously established Military 
 Education Savings Account except in cases in which--
 ``
        (A) the parents of the child on whose behalf the 
 account was established choose not to renew the 
 account; or
 ``
        (B) the account was used to commit fraud or was 
 otherwise not used in accordance with the requirements 
 of this section.
 ``
            (c) Priority in the Event of Insufficient Funds.--
 ``

    (1) In general.--If the funds appropriated to carry out 
 this section are insufficient to enable the Secretary to 
 establish and fully fund a Military Education Savings Account 
 for each eligible military dependent child whose parent has an 
 application approved under subsection

    (b) for a school year, 
 the Secretary shall--
 ``
        (A) first renew and fully fund previously 
 established Military Education Savings Accounts; and
 ``
        (B) if funds remain available after renewing all 
 accounts under subparagraph
        (A) , conduct the lottery 
 described in paragraph

    (3) to select the children on 
 whose behalf accounts will be established using the 
 remaining funds.
 ``

    (2) Transfer authority.--Notwithstanding any other 
 provision of law, the Secretary may transfer amounts from any 
 account of the Department of Education to renew and fully fund 
 previously established Military Education Savings Accounts 
 under paragraph

    (1)
        (A) . The authority to transfer amounts under 
 the preceding sentence shall not be subject to any transfer or 
 reprogramming requirements under any other provision of law.
 ``

    (3) Lottery.--The lottery described in this paragraph is 
 a lottery in which--
 ``
        (A) siblings of children on whose behalf Military 
 Education Savings Accounts have previously been 
 established have the highest probability of selection;
 ``
        (B) children of enlisted members have the next-
 highest probability of selection after the children 
 described in subparagraph
        (A) ;
 ``
            (C) children of warrant officers have the next-
 highest probability of selection after the children 
 described in subparagraph
        (B) ; and
 ``
            (D) children of commissioned officers have the 
 lowest probability of selection.
 ``
            (d) Amount of Deposits.--
 ``

    (1) First year of program.--The amount of funds deposited 
 into each Military Education Savings Account for the first 
 school year for which such accounts are established under this 
 section shall be $6,000 for each eligible military dependent 
 child covered by the account.
 ``

    (2) Subsequent years.--The amount of funds deposited into 
 each Military Education Savings Account for any school year 
 after the year described in paragraph

    (1) , shall be the amount 
 determined under this subsection for the previous school year 
 increased by a percentage equal to the percentage increase in 
 the Chained Consumer Price Index for All Urban Consumers (as 
 published by the Bureau of Labor Statistics of the Department 
 of Labor) over the period of such previous school year.
 ``

    (e) Use of Funds.--Funds deposited into a Military Education 
Savings Account for a school year may be used by the parent of an 
eligible military dependent child to make payments to a provider of a 
qualified educational service that is approved by the Secretary under 
subsection

    (f)

    (1) , including for--
 ``

    (1) costs of attendance at a private elementary school or 
 private secondary school, educational co-op, micro-school, 
 learning pod, or hybrid school, which may include a school of 
 any kind that has a religious mission;
 ``

    (2) private online learning programs;
 ``

    (3) private tutoring or educational instruction outside 
 the home;
 ``

    (4) individual classes, extracurricular activities and 
 programs, athletic programs, and educational trips provided by 
 a school of any kind or as part of a parent-directed 
 curriculum;
 ``

    (5) summer camps and academic camps that take place at 
 times other than the summer;
 ``

    (6) ancillary materials as prescribed by a student's 
 educational therapist or a medical professional to complete 
 academic work;
 ``

    (7) textbooks, curriculum programs, or other 
 instructional materials, including any supplemental materials 
 required by a curriculum program, private school, private 
 online learning program, or a public school, or any parent-
 directed curriculum associated with kindergarten through grade 
 12 education;
 ``

    (8) computer hardware or other technological devices that 
 are used to help meet a child's educational needs, except that 
 such hardware or devices may not be purchased by a parent more 
 than once in an 18-month period;
 ``

    (9) educational software and applications;
 ``

    (10) uniforms purchased from or through a private school;
 ``

    (11) fees for nationally standardized assessment exams, 
 advanced placement exams, any exams related to college or 
 university admission, or tuition or fees for preparatory 
 courses for such exams;
 ``

    (12) fees for summer education programs and specialized 
 after-school education programs (but not including after-school 
 childcare);
 ``

    (13) educational services and therapies, including 
 occupational, behavioral, physical, speech-language, and 
 audiology therapies;
 ``

    (14) fees for transportation paid to a fee-for-service 
 transportation provider for the child to travel to and from the 
 facilities of a provider of qualified educational services;
 ``

    (15) costs of attendance at an institution of higher 
 education;
 ``

    (16) costs associated with an apprenticeship or other 
 vocational training program;
 ``

    (17) fees for State-recognized industry certification 
 exams, and tuition or fees for preparatory courses for such 
 exams;
 ``

    (18) contributions to a college savings account, which 
 may include contributions to a qualified tuition program (as 
 defined in 

section 529

    (b)

    (1)
        (A) of the Internal Revenue Code of 
 1986) or other prepaid tuition plan offered by a State; or
 ``

    (19) any other educational services approved by the 
 Secretary.
 ``

    (f) Requirements for Providers of Qualified Educational 
Services.--
 ``

    (1) Registration and approval.--The Secretary shall 
 establish and maintain a registry of providers of qualified 
 educational services that are approved to receive payments from 
 a Military Education Savings Account. The Secretary shall 
 approve a provider of a qualified educational service under 
 subsection

    (e) to receive such payments if the provider 
 demonstrates to the Secretary that it is licensed in the State 
 in which it operates to provide one or more of the services for 
 which funds may be expended under subsection

    (e) .
 ``

    (2) Surety bond.--
 ``
        (A) In general.--The Secretary shall require each 
 provider of a qualified educational service under 
 subsection

    (e) that receives $100,000 or more in funds 
 from Military Education Savings Accounts in a school 
 year to post a surety bond, in an amount determined by 
 the Secretary, for such school year.
 ``
        (B) Retention.--The Secretary shall prescribe the 
 circumstances under which a surety bond under 
 subparagraph
        (A) may be retained by the Secretary.
 ``

    (g) Transfer Schedule.--
 ``

    (1) In general.--Subject to paragraph

    (2) , the Secretary 
 shall make quarterly transfers of the amount calculated 
 pursuant to subsection
            (d) for deposit into the account of each 
 eligible military dependent child, except that the Secretary 
 may make transfers according to another transfer schedule if 
 the Secretary determines that a transfer schedule other than 
 quarterly transfers is necessary for the operation of the 
 education savings account.
 ``

    (2) Choice of schedule.--The Secretary shall establish a 
 process under which the parent of a child on whose behalf a 
 Military Education Savings Account is established may choose a 
 transfer schedule other than a transfer schedule determined 
 under paragraph

    (1) .
 ``

    (3) Expense reports.--Before receiving a transfer under 
 paragraph

    (1) or

    (2) , the parent of an eligible military 
 dependent child on whose behalf a Military Education Savings 
 Account is established shall submit to the Secretary an expense 
 report demonstrating how funds from the most recent transfer 
 were expended.
 ``

    (h) Rollover.--Amounts remaining in the Military Education 
Savings Account of an eligible military dependent child at the end of a 
school year shall remain available for use in accordance with 
subsection

    (e) until the date on which such account terminates under 
subsection
            (i) .
 ``
            (i) Termination and Return of Funds.--
 ``

    (1) Termination.--The Military Education Savings Account 
 of an eligible military dependent child shall terminate on--
 ``
        (A) the date on which the child enrolls in a 
 public elementary school or secondary school on a full-
 time basis;
 ``
        (B) in the case of a child who is pursuing 
 postsecondary education, the earlier of--
 ``
            (i) the date on which the child completes 
 postsecondary education; or
 ``
            (ii) the date on which the child attains 
 the age of 22 years;
 ``
            (C) in the case of a child who is an individual 
 with a disability, the date on which the child attains 
 the age of 26 years; or
 ``
            (D) in the case of an individual not described in 
 subparagraph
        (B) or
            (C) , the earlier of--
 ``
            (i) the date on which the child attains 
 the age of 22 years; or
 ``
            (ii) the expiration of any 2-year period 
 during which funds in the account are not used 
 in accordance with this section.
 ``

    (2) Return of funds.--Any funds remaining in a Military 
 Education Savings Account on the date such account terminates 
 under paragraph

    (1) shall be returned to the Treasury of the 
 United States and shall be used to carry out the program under 
 this section.
 ``

    (j) Compulsory Attendance Requirements.--A State that receives 
funds under this title shall consider a child with a Military Education 
Savings Account for a school year as meeting the State's compulsory 
school attendance requirements for such school year.
 ``

    (k) Special Rule.--In the case of a child with a Military 
Education Savings Account who attends a public school on a less than 
full-time basis in a school year--
 ``

    (1) the child may not attend the public school free of 
 charge; and
 ``

    (2) funds in the account, in an amount determined 
 pursuant to an agreement between the parent of the child and 
 the local educational agency concerned, shall be used to pay 
 for the child's costs of attendance at such school.
 ``
            (l) Tax Treatment of Accounts.--
 ``

    (1) In general.--A Military Education Savings Account is 
 exempt from taxation under subtitle A of the Internal Revenue 
 Code of 1986.
 ``

    (2) Contributions and distributions.--For purposes of 
 subtitle A of the Internal Revenue Code of 1986--
 ``
        (A) any contribution to a military education 
 savings account by the Secretary under this Act shall 
 not be includible in the gross income of the individual 
 for whose benefit such account is maintained or the 
 parent of such individual; and
 ``
        (B) any distribution from a military education 
 savings account which is permitted under this Act shall 
 not be includible in the gross income of the individual 
 for whose benefit such account is maintained or the 
 parent of such individual.
 ``
            (m) Fraud Prevention and Reporting.--The Secretary shall 
establish a website and a telephone hotline that enable individuals to 
anonymously report suspected fraud in the program under this section. 
The Secretary also shall conduct or contract for random, quarterly, or 
annual audits of accounts as needed to ensure compliance with this 
section.
 ``

    (n) Contract Authority.--The Secretary may enter into one or more 
contracts for the purpose of carrying out the responsibilities of the 
Secretary under this section.
 ``

    (o) Refunds.--The Secretary shall establish a process under which 
payments from a Military Education Savings Accounts to a provider of a 
qualified educational service under subsection

    (e) shall be refunded to 
the account in the event of fraud or nonperformance by the provider.
 ``

    (p) Rules of Construction.--
 ``

    (1) Nonagency.--A provider of a qualified educational 
 service under subsection

    (e) that receives a payment from a 
 Military Education Savings Account pursuant to this section 
 shall not be considered an agent of the State or the Federal 
 Government solely because the provider received such payment.
 ``

    (2) Prohibition of federal or state supervision or 
 control over nonpublic education providers.--
 ``
        (A) In general.--Nothing in this section shall be 
 construed to permit, allow, encourage, or authorize any 
 Federal or State control or supervision over any aspect 
 of any provider of a qualified educational service, 
 including a private, religious, or home education 
 provider (without regard to whether a home education 
 provider is treated as a private school or home school 
 under State law). This section shall not be construed 
 to exclude private, religious, or home education 
 providers from participation in programs or services 
 under this Act.
 ``
        (B) No religion-based discrimination.--The 
 Secretary shall not exclude, discriminate against, or 
 otherwise disadvantage any provider of a qualified 
 educational service with respect to programs or 
 services under this section based in whole or in part 
 on the provider's religious education character or 
 affiliation, including religiously based or mission-
 based policies or practices.
 ``

    (3) Imposition of additional requirements.--No Federal 
 requirements shall apply to a provider of a qualified 
 educational service under subsection

    (e) other than the 
 requirements specifically set forth in this section. Nothing in 
 this section shall be construed to require a provider of a 
 qualified educational service under subsection

    (e) to alter its 
 creed, practices, admissions policy, or curriculum in order to 
 be eligible to receive payments from a Military Education 
 Savings Account.
 ``

    (4) Treatment of assistance.--For purposes of any Federal 
 law, assistance provided under this section shall be considered 
 assistance to the eligible military dependent child or to the 
 parents of a child on whose behalf a Military Education Savings 
 Account is established and shall not be considered assistance 
 to the provider of a qualified educational service under 
 subsection

    (e) that uses or receives funds from a Military 
 Education Savings Account.
 ``

    (q) Legal Proceedings.--
 ``

    (1) Burden.--In any legal proceeding in which a provider 
 of a qualified educational service under subsection

    (e) challenges a requirement imposed by the Department of Education 
 on the provider, the Department shall have the burden of 
 establishing that the requirement is necessary and does not 
 impose any undue burden on the provider.
 ``

    (2) Limitation on liability.--
 ``
        (A) In general.--No liability shall arise on the 
 part of an entity described in subparagraph
        (B) solely 
 because such entity awards, uses, or receives funds 
 from a Military Education Savings Account.
 ``
        (B) Entity described.--The entities described in 
 this subparagraph are the following:
 ``
            (i) The Department of Education.
 ``
            (ii) An entity that enters into a 
 contract with the Secretary pursuant to 
 subsection

    (n) .
 ``
            (iii) An entity that provides a qualified 
 educational service as described in subsection

    (e) .
 ``

    (3) Intervention.--
 ``
        (A) In general.--Except as provided in 
 subparagraph
        (B) , a parent of an eligible military 
 dependent child or a parent of a child on whose behalf 
 a Military Education Savings Account is established may 
 intervene in any legal proceeding in which the 
 constitutionality of the program under this section is 
 challenged under a State constitution or the United 
 States Constitution.
 ``
        (B) Exception.--For purposes of judicial 
 administration, a court may--
 ``
            (i) limit the number of parents allowed 
 to intervene in a proceeding under subparagraph
        (A) ; or
 ``
            (ii) require all parents who have 
 intervened in a proceeding under subparagraph
        (A) to file a joint brief, except that no 
 parent shall be required to join any brief 
 filed on behalf of a State that is a defendant 
 in the proceeding.
 ``

    (r) Administrative Expenses.--The Secretary may use not more than 
5 percent of the funds made available to carry out this section for the 
direct costs of administering Military Education Savings Accounts.
 ``

    (s) 

=== Definitions. ===
-In this section:
 ``

    (1) The terms `commissioned officer', `enlisted member', 
 and `warrant officer' have the meanings given those terms in 
 

section 101

    (b) of title 10, United States Code.
 ``

    (2) The term `eligible military dependent child' means a 
 child who--
 ``
        (A) has a parent on active duty in the uniformed 
 services (as that term is defined in 

section 101 of 
 title 37, United States Code, except that such term 
 does not include an officer in the National Guard who 
 has been activated); and
 ``
        (B) in the case of a child seeking to establish a 
 Military Education Savings account for the first time, 
 was enrolled in a public elementary school or a public 
 secondary school for not less than 100 consecutive days 
 in the preceding school year.
 ``

    (3) The term `institution of higher education' has the 
 meaning given the term in 

section 102 of the Higher Education 
 Act of 1965 (20 U.S.C. 1002).''.

    (b) Table of Contents.--The table of contents in 

section 2 of the 
Elementary and Secondary Education Act is amended by inserting after 
the item relating to 

section 7012 the following:

``

Sec. 7012A. Military education savings accounts.''.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

 

Section 7014 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7714) is amended by adding at the end the following:
 ``

    (f) Military Education Savings Accounts.--For the purpose of 
carrying out 

section 7012A--
 ``

    (1) there are authorized to be appropriated 
 $1,200,000,000 for fiscal year 2026; and
 ``

    (2) for each fiscal year beginning after fiscal year 
 2026, the amount authorized to be appropriated shall be the 
 amount authorized to be appropriated for the previous fiscal 
 year increased by the percentage increase in the Chained 
 Consumer Price Index for All Urban Consumers (as published by 
 the Bureau of Labor Statistics of the Department of Labor) over 
 the period of such previous fiscal year.''.
 <all>