Federal Education Department Abolished in 30 Days; New K-12 Funding Tied to State Income Tax Payments

This legislation proposes a massive overhaul of federal education policy, starting with the complete abolition of the U.S. Department of Education (DOE) just 30 days after the bill becomes law. Alongside the shutdown, nearly every program currently run by the DOE would be terminated. The only survivors are the Federal Pell Grant program and the William D. Ford Federal Direct Loan Program, the two major financial aid lifelines for college students. Responsibility for these two remaining functions would immediately transfer to the Secretary of the Treasury (SEC. 1).

The Treasury Takes Over the Classroom Budget

When the DOE closes its doors, the Secretary of the Treasury steps in to manage a new system for K-12 funding. The bill establishes a new block grant program designed to send federal education dollars directly to states. The stated goal here is to encourage competition and give parents more choices in schooling, using state-level non-federal funds (SEC. 2).

Where the Money Goes: A Tax-Based Formula

This is where the structure gets interesting—and potentially complicated. Instead of using formulas based on student population, poverty levels, or special needs, the amount of money a state receives under this new block grant is determined solely by how much federal individual income tax its residents paid in total. The Treasury Secretary figures this out by consulting with the IRS Commissioner (SEC. 2). Essentially, states with higher federal tax contributions get a bigger slice of the K-12 education pie, regardless of the actual number of students or their specific needs.

Real-World Shockwaves: What Gets Cut?

If you're a parent or a teacher, the immediate concern is what gets terminated. While Pell Grants and Direct Loans survive, the abrupt termination of all other DOE programs means the end of federal funding and administrative oversight for everything from teacher training and school improvement grants to targeted aid for specific student populations. For example, federal support for special education services, which often relies on DOE guidance and funding streams, could be thrown into immediate chaos. For the federal employees currently working at the DOE, this bill mandates total job termination within 30 days.

The Equity Question: Who Pays and Who Benefits?

Changing the funding formula to rely on federal income tax contributions is a huge shift. States with high-income earners and large tax bases would likely see a significant increase in their K-12 block grant allocation. Conversely, states with lower average incomes or smaller tax bases—which often have higher concentrations of students from low-income families—could see their federal education dollars shrink drastically. This formula effectively decouples K-12 funding from student need and ties it directly to state wealth, raising serious questions about equitable distribution across the country.

Oversight Out of Its Lane

Another major practical challenge is moving core education functions to the Treasury Department. The Treasury is an expert in tax collection, finance, and debt management—not in educational policy, civil rights enforcement, or pedagogical standards. This move concentrates administrative power in an agency that has zero institutional history or expertise in education. While states are required to use the money strictly for elementary and secondary education, the bill is silent on how the crucial federal oversight functions—like ensuring compliance with civil rights laws related to education—will be maintained when the agency responsible for that enforcement is gone. It’s like asking your accountant to suddenly manage your construction site; they know the budget, but they don't know the building codes.