Education Savings Accounts for Military Families Act of 2025
Sponsored By: Senator Cruz, Ted [R-TX]
Introduced
Summary
Military Education Savings Accounts (MESAs) would create federal savings accounts for eligible military dependent children. Parents could use account funds for a wide range of education costs from private school tuition to tutoring, online programs, certifications, and college savings.
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- Military families: Parents could receive an initial deposit of $6,000 per eligible child with annual increases tied to the chained Consumer Price Index. Parents must apply year-round and sign a simple agreement on core instructional subjects and limits on full-time public enrollment.
- Providers and schools: Providers must register to receive payments and those getting $100,000 or more in a school year must post a surety bond. States must still count MESA students toward compulsory attendance and part-time public attendance requires an agreement and payment from the account.
- Administration and program rules: The Secretary of Education, in consultation with the Secretary of Defense, would run the program, automatically renew accounts unless parents opt out, and use a lottery if funds are limited with sibling and rank-based priorities. Administrative expenses are capped at 5% of program funds.
*Would authorize $1.2 billion for fiscal year 2026 and allow future increases tied to chained CPI, which would increase federal spending if enacted.*
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Bill Overview
Analyzed Economic Effects
6 provisions identified: 3 benefits, 0 costs, 3 mixed.
New military education accounts and funding
If enacted, the bill would create Military Education Savings Accounts for eligible military children. The government would deposit $6,000 into each new account in the first school year. Congress would be authorized to appropriate $1.2 billion for fiscal year 2026 to start the program. Each later school-year deposit and future annual appropriations would rise by the percent change in the Chained CPI-U.
Tax-free treatment for account deposits
If enacted, Secretary contributions to a Military Education Savings Account and authorized distributions from the account would not count as gross income for the child or the parent. That means those federal deposits and permitted withdrawals would be tax-exempt under current income tax rules.
What MESA funds can pay for
If enacted, MESA funds could pay for many education costs. Examples include private K–12 tuition (including religious schools), tutoring, classes, camps, textbooks, therapy materials, test fees, apprenticeship and college costs, and contributions to college savings plans. The Department would keep a registry of approved providers and may approve providers that show relevant state licensing. The Secretary could require providers who get $100,000 or more in a year to post a surety bond, run audits, and refund payments if a provider commits fraud. A provider would not automatically become a government agent just by receiving MESA payments, and the Secretary could not exclude providers for their religious character. Parents could be required to limit hardware purchases to one device per child every 18 months.
Account timing, reporting, and end rules
If enacted, the Secretary would by default deposit MESA money quarterly, and parents could choose a different schedule. Before getting the next transfer, parents must report how they spent the last transfer. Accounts would renew automatically unless the parent opts out or the account was misused. Accounts end when the child enrolls full-time in public school, completes postsecondary school or turns 22 (26 if the child has a disability), or after two years of nonuse. Any leftover funds at termination would go back to the U.S. Treasury. The Secretary could use up to 5% of program funds to run the program.
Priority and lottery when money is limited
If enacted, when appropriated funds are not enough the Secretary would first renew and fully fund existing MESAs. If money remains, new accounts would be awarded by lottery. The lottery would give highest priority to siblings of current MESA children, then children of enlisted members, then warrant officers, and finally commissioned officers. The Secretary could transfer Department funds to renew prior accounts and would not be subject to other transfer rules.
Who can apply and parental commitments
If enacted, parents could apply year-round for a MESA for an eligible military dependent child. To qualify the child must have a parent on active duty in the uniformed services (excluding an activated National Guard officer). First-time applicants must show the child was enrolled in public school at least 100 straight days last year. Parents must sign an agreement to teach core subjects, use funds only for allowed purposes, and not enroll the child full-time in public school while using MESA. If a child attends public school part-time, MESA funds must be used as agreed with the local school to pay attendance costs. States that take program funds would have to count MESA students toward compulsory attendance.
Sponsors & CoSponsors
Sponsor
Cruz, Ted [R-TX]
TX • R
Cosponsors
Sen. Banks, Jim [R-IN]
IN • R
Sponsored 4/1/2025
Sen. Budd, Ted [R-NC]
NC • R
Sponsored 7/15/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov