House “Budget Reconciliation” Bill Includes Key Education and Medicaid Provisions

House Republicans have been working on a partisan package to extend current tax law and operationalize key parts of President Trump’s agenda. This plan aims to fund these initiatives by identifying savings in other areas of federal spending through a process known as "budget reconciliation.” This week, those efforts materialized into a more than 1,000-page bill package with key impacts on education. The proposed package would reduce funding for student loan programs by $350 billion, which would limit access to Pell Grants for low-income students. Additionally, undergraduate students would no longer benefit from interest-free loans while they are enrolled in school. Repayment plans would be altered, and certain regulations designed to hold schools accountable would be rolled back.  

A version of the school voucher initiative, the Educational Choice for Children Act, was also included. The $20 billion plan would provide tax credits to people who donate money to scholarship organizations. These organizations would then give families up to $5,000 a year to pay for private school tuition, books, or online education. While the bill text mentions students with disabilities, it doesn’t add any new protections.  

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Finally, the package would cut Medicaid funding by over $800 billion, potentially resulting in 7.6 million people losing their health coverage. While children, schools, and early childhood services are not explicitly targeted, it will significantly limit states in how they fund Medicaid services. Nearly all states use Medicaid to finance Part C early intervention systems. The median percentage of children eligible for both Part C and Medicaid is about 50%. The median percentage of Medicaid contribution to states’ total early intervention budgets is about 30%. Furthermore, Medicaid is one of the largest federal funding sources for K-12 schools. The bill must still advance through the House and could be altered through the Senate process before it is finalized.