The “One Big Beautiful Bill Act” (H.R.1, Pub. L. 119-21) was passed by Congress and signed into law on July 4, 2025. It is a broad reconciliation law that includes, among many provisions, (a) a new federal nonrefundable tax-credit scholarship program that allows individual taxpayers to claim a credit for cash contributions to state-listed Scholarship Granting Organizations (SGOs) beginning Jan. 1, 2027, (b) creation of new “Trump Accounts” (Section 530A) for children born in eligible years, and (c) changes expanding use and rules for education savings vehicles and other tax and spending measures. The law’s full text and implementing guidance (IRS revenue procedures and notices) specify program limits (e.g., a credit cap of $1,700 per taxpayer) and state opt‑in procedures.
A “Trump Account” (statutory Section 530A) is a new, tax-advantaged savings account created by the One Big Beautiful Bill for children (born in specified years) that resembles a hybrid of 529 and retirement-style accounts; the program includes a one‑time federal pilot contribution (commonly described as $1,000 for eligible newborns) and expands federal rules to make K–12 expenses more broadly payable from certain education savings vehicles. Detailed rules and eligibility, and how 529 use for K–12 is changed, are in the law and IRS guidance (Trump Accounts page and OBBBA provisions).
The President has no unilateral authority under the Constitution to abolish an executive department; eliminating the Department of Education would require Congress to pass legislation repealing its statutory authorization and to transfer or repeal programs and appropriations. The Administration can direct the Secretary to ‘‘facilitate’’ reorganization steps (e.g., preparing plans, guidance, or transfers), but actual closure or termination of the Department, elimination of its funding, or statutory programs requires congressional legislation and appropriation actions and likely court review.
The One Big Beautiful Bill and the Administration’s Executive Order and DOE guidance initiatives point to using existing federal K–12 funding streams and competitive grant authorities to support scholarships; IRS guidance names state-listed Scholarship Granting Organizations for the new federal tax credit. Specific federal formulas or programs that states might repurpose would include flexible formula grants (e.g., Title I, IDEA) only if statute and federal rules permit reallocation — but the law and implementing guidance (so far) focus on permitting states to opt into the federal tax‑credit and on guidance for how existing federal funds could be used; final determinations depend on rulemaking and Education Department guidance.
The Administration’s proclamation and statements do not provide a legally detailed definition or an adjudication process for what constitutes a school that ‘‘permits discriminatory treatment and anti‑American indoctrination.’’ Removing federal funds from schools generally requires statutory authority, notice and administrative procedures (and often judicial review); the Department of Education would need clear regulatory standards and legal bases (or new legislation) to strip formula or grant funds from schools, and enforcement actions would be subject to existing civil‑rights statutes and due‑process protections.
Under the Administration’s plan as described, “universal school choice” means expanding multiple school‑choice mechanisms nationwide — chiefly a federal tax‑credit scholarship program (federal credits for donations to SGOs), expanded education savings vehicles (Trump Accounts/expanded 529 uses), and prioritizing school‑choice in grant competitions. That implies a mix of tax‑credit scholarships, education savings accounts, and broader voucher‑like options rather than a single universal voucher program. The OBBBA establishes the federal tax‑credit scholarship and Trump Accounts; states decide participation and design of scholarship programs.
Expanding universal school choice through tax‑credit scholarships, Trump Accounts/ESAs, and similar mechanisms typically shifts public dollars away from district schools as students (and associated per‑pupil funding) move to private schools or alternative options; districts can lose enrollment‑based state funding, face reduced economies of scale, and encounter added administrative and accountability challenges because many private providers are not subject to the same testing, reporting, or public‑school accountability rules. Research shows mixed effects on student outcomes and raises concerns about funding losses, segregation, and oversight when choice programs scale up.