New Bill Proposes $6,000 Tax-Free Education Accounts for Military Kids

Okay, let's break down the "Education Savings Accounts for Military Families Act of 2025." In simple terms, this bill aims to set up special savings accounts, starting at $6,000 per year (and adjusted for inflation later), for eligible kids in military families. The goal? To give parents more flexibility and financial help for a wide range of educational expenses outside the traditional public school system.

How These Accounts Would Work

The Department of Education, working with the Department of Defense, would manage these "Military Education Savings Accounts." Parents need to apply, agreeing to handle their child's core subject instruction (reading, math, science, etc.) and confirming they won't enroll their kid full-time in public school while using the account. The application process is meant to be year-round and straightforward. Once approved, the initial $6,000 gets deposited. Good news for existing users: renewals are automatic unless you opt-out or misuse funds. If money gets tight, the bill says renewing existing accounts comes first. After that, new accounts would be decided by lottery, prioritizing siblings of current users, then kids of enlisted members, then warrant officers, and finally, children of commissioned officers. A key detail here: the bill allows the Secretary of Education to pull funds from any other Department of Education account if needed just to cover these renewals.

What Can You Actually Spend It On?

This is where it gets interesting. The list of approved expenses is pretty broad. Think:

• Private school tuition
• Online classes and tutoring
• Textbooks, curriculum, and even things like uniforms
• Educational therapies
• Fees for tests like the SAT or ACT
• Tech like computers and software
• Transportation costs related to education
• Even contributions to college savings plans (like a 529) or costs for apprenticeships and industry certifications.

Basically, it covers a lot more than just K-12 tuition. Any providers taking these funds (like tutors or private schools) need to register, and if they receive over $100,000 annually from these accounts, they have to post a surety bond – a type of insurance policy. Funds roll over year-to-year, but the account closes if the child enrolls full-time in public school, finishes college, hits age 22 (or 26 if disabled), or goes inactive for two years. Leftover money goes back to the Treasury for the program.

The Fine Print: Taxes, Rules, and Oversight

These accounts come with a nice perk: they're tax-exempt. Contributions and spending on approved items won't count as income. The bill also tries to head off problems by setting up a fraud reporting hotline and website, plus requiring audits. It includes language stating that providers aren't government agents just because they accept these funds and that the program shouldn't interfere with a nonpublic school's independence, including religious schools. Importantly, kids using these accounts are considered to be meeting state compulsory attendance laws. If a child attends public school part-time, the ESA funds have to be used to pay for that attendance based on an agreement with the school district. The bill authorizes $1.2 billion for the first year (FY 2026), with increases planned for inflation in subsequent years.