[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 l