II 

116TH CONGRESS 

1ST SESSION S. 695 

To amend the Elementary and Secondary Education Act of 1965 to allow 

parents of eligible military dependent children to establish Military Education Savings Accounts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 7, 2019 

Mr. SASSE (for himself, Mr. COTTON, and Mr. SCOTT of South Carolina) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Elementary and Secondary Education Act 

of 1965 to allow parents of eligible military dependent 

children to establish Military Education Savings Accounts, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Education Savings Ac5 counts for Military Families Act of 2019’’. 

6 SEC. 2. MILITARY EDUCATION SAVINGS ACCOUNTS. 

7 (a) IN GENERAL.—Title VII of the Elementary and 

8 Secondary Education Act of 1965 (20 U.S.C. 7701 et 


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1 seq.) is amended by inserting after section 7012 the fol2 lowing: 

3 ‘‘SEC. 7012A. MILITARY EDUCATION SAVINGS ACCOUNTS. 

4 ‘‘(a) IN GENERAL.—The Secretary of Education, in 

5 consultation with the Secretary of Defense, shall carry out 

6 a program under which the Secretary of Education shall— 

7 ‘‘(1) at the request of a parent of an eligible 

8 military dependent child, establish an account on be9 half of such child (to be known as a ‘Military Edu10 cation Savings Account’) into which the Secretary 

11 shall deposit funds in an amount determined under 

12 subsection (d); and 

13 ‘‘(2) establish a procedure under which the par14 ent of the child may use funds in the account to pay 

15 for the educational expenses of the child in accord16 ance with this section. 

17 ‘‘(b) APPLICATION.— 

18 ‘‘(1) IN GENERAL.—To be eligible to participate 

19 in the program under this section for a school year, 

20 a parent of an eligible military dependent child shall 

21 submit an application to the Secretary in accordance 

22 with this subsection. 

23 ‘‘(2) APPLICATION PROCESS.—In carrying out 

24 paragraph (1), the Secretary shall— 


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1 ‘‘(A) accept applications on a year-round 

2 basis and establish procedures for approving 

3 applications in an expeditious manner; and 

4 ‘‘(B) create a standardized form that par5 ents can use to apply for the program and en6 sure that such form is readily available in writ7 ten and electronic formats, including on a pub8 licly accessible website. 

9 ‘‘(3) APPROVAL.—Subject to the availability of 

10 funds to carry out this section, the Secretary shall 

11 approve the application of a parent to establish a 

12 Military Education Savings Account if— 

13 ‘‘(A) the application is submitted in ac14 cordance with the application process estab15 lished by the Secretary pursuant to this sub16 section; 

17 ‘‘(B) the application demonstrates that the 

18 child on whose behalf the Military Education 

19 Savings Account is to be established is an eligi20 ble military dependent child; and 

21 ‘‘(C) the parent who submits the applica22 tion enters into a written agreement with the 

23 Secretary under which the parent agrees— 

24 ‘‘(i) to provide the child with instruc25 tion in, at minimum, the fields of reading, 


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1 language, mathematics, science, and social 

2 studies; 

3 ‘‘(ii) to not enroll the child in a public 

4 elementary school or a public secondary 

5 school, on a full-time basis while partici6 pating in the program; 

7 ‘‘(iii) to use funds in the Military 

8 Education Savings Account only for the 

9 purposes authorized under this section; 

10 and 

11 ‘‘(iv) to comply with all other require12 ments of this section. 

13 ‘‘(4) RENEWALS.—The Secretary shall establish 

14 a process for the automatic renewal of a previously 

15 established Military Education Savings Account ex16 cept in cases in which— 

17 ‘‘(A) the parents of the child on whose be18 half the account was established choose not to 

19 renew the account; or 

20 ‘‘(B) the account was used to commit 

21 fraud or was otherwise not used in accordance 

22 with the requirements of this section. 

23 ‘‘(c) PRIORITY IN THE EVENT OF INSUFFICIENT

24 FUNDS.— 


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1 ‘‘(1) IN GENERAL.—If the funds appropriated 

2 to carry out this section are insufficient to enable 

3 the Secretary to establish and fully fund a Military 

4 Education Savings Account for each eligible military 

5 dependent child whose parent has an application ap6 proved under subsection (b) for a school year, the 

7 Secretary shall— 

8 ‘‘(A) first renew and fully fund previously 

9 established Military Education Savings Ac10 counts; and 

11 ‘‘(B) if funds remain available after renew12 ing all accounts under subparagraph (A), con13 duct the lottery described in paragraph (3) to 

14 select the children on whose behalf accounts will 

15 be established using the remaining funds. 

16 ‘‘(2) TRANSFER AUTHORITY.—Notwithstanding 

17 any other provision of law, the Secretary may trans18 fer amounts from any account of the Department of 

19 Education to renew and fully fund previously estab20 lished Military Education Savings Accounts under 

21 paragraph (1)(A). The authority to transfer 

22 amounts under the preceding sentence shall not be 

23 subject to any transfer or reprogramming require24 ments under any other provision of law. 


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1 ‘‘(3) LOTTERY.—The lottery described in this 

2 paragraph is a lottery in which— 

3 ‘‘(A) siblings of children on whose behalf 

4 Military Education Savings Accounts have pre5 viously been established have the highest prob6 ability of selection; 

7 ‘‘(B) children of enlisted members have the 

8 next-highest probability of selection after the 

9 children described in subparagraph (A); 

10 ‘‘(C) children of warrant officers have the 

11 next-highest probability of selection after the 

12 children described in subparagraph (B); and 

13 ‘‘(D) children of commissioned officers 

14 have the lowest probability of selection. 

15 ‘‘(d) AMOUNT OF DEPOSITS.— 

16 ‘‘(1) FIRST YEAR OF PROGRAM.—The amount 

17 of funds deposited into each Military Education Sav18 ings Account for the first school year for which such 

19 accounts are established under this section shall be 

20 $6,000 for each eligible military dependant child 

21 covered by the account. 

22 ‘‘(2) SUBSEQUENT YEARS.—The amount of 

23 funds deposited into each Military Education Sav24 ings Account for any school year after the year de25 scribed in paragraph (1), shall be the amount deterVerDate Sep 11 2014 04:31 Mar 16, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S695.IS S695

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1 mined under this subsection for the previous school 

2 year increased by a percentage equal to the percent3 age increase in the Chained Consumer Price Index 

4 for All Urban Consumers (as published by the Bu5 reau of Labor Statistics of the Department of 

6 Labor) over the period of such previous school year. 

7 ‘‘(e) USE OF FUNDS.—Funds deposited into a Mili8 tary Education Savings Account for a school year may be 

9 used by the parent of an eligible military dependent child 

10 to make payments to a qualified educational service pro11 vider that is approved by the Secretary under subsection 

12 (f)(1) for— 

13 ‘‘(1) costs of attendance at a private elementary 

14 school or secondary school recognized by the State, 

15 which may include a private school that has a reli16 gious mission; 

17 ‘‘(2) private online learning programs; 

18 ‘‘(3) private tutoring; 

19 ‘‘(4) services provided by a public elementary 

20 school or secondary school attended by the child on 

21 a less than full-time basis, including individual class22 es and extracurricular activities and programs; 

23 ‘‘(5) textbooks, curriculum programs, or other 

24 instructional materials, including any supplemental 

25 materials required by a curriculum program, private 


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1 school, private online learning program, or a public 

2 school, or any parent directed curriculum associated 

3 with K–12 education; 

4 ‘‘(6) computer hardware or other technological 

5 devices that are used to help meet a child’s edu6 cational needs, except that such hardware or devices 

7 may not be purchased by a parent more than once 

8 in an 18-month period; 

9 ‘‘(7) educational software and applications; 

10 ‘‘(8) uniforms purchased from or through a pri11 vate school recognized by the State; 

12 ‘‘(9) fees for nationally standardized assessment 

13 exams, advanced placement exams, any exams re14 lated to college or university admission, or tuition or 

15 fees for preparatory courses for such exams; 

16 ‘‘(10) fees for summer education programs and 

17 specialized after-school education programs (but not 

18 including after-school childcare); 

19 ‘‘(11) educational services and therapies, in20 cluding occupational, behavioral, physical, speech21 language, and audiology therapies; 

22 ‘‘(12) fees for transportation paid to a fee-for23 service transportation provider for the child to travel 

24 to and from the facilities of a qualified educational 

25 service provider; 


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1 ‘‘(13) costs of attendance at an institution of 

2 higher education; 

3 ‘‘(14) costs associated with an apprenticeship or 

4 other vocational training program; 

5 ‘‘(15) fees for state-recognized industry certifi6 cation exams, and tuition or fees for preparatory 

7 courses for such exams; 

8 ‘‘(16) contributions to a college savings ac9 count, which may include contributions to a qualified 

10 tuition program (as defined in section 529(b)(1)(A) 

11 of the Internal Revenue Code of 1986) or other pre12 paid tuition plan offered by a State; or 

13 ‘‘(17) any other educational expenses approved 

14 by the Secretary. 

15 ‘‘(f) REQUIREMENTS FOR QUALIFIED EDUCATIONAL

16 SERVICE PROVIDERS.— 

17 ‘‘(1) REGISTRATION AND APPROVAL.—The Sec18 retary shall establish and maintain a registry of 

19 qualified educational service providers that are ap20 proved to receive payments from a Military Edu21 cation Savings Account. The Secretary shall approve 

22 a qualified educational service provider to receive 

23 such payments if the provider demonstrates to the 

24 Secretary that it is licensed in the State in which it 


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1 operates to provide one or more of the services for 

2 which funds may be expended under subsection (e). 

3 ‘‘(2) PARTICIPATION IN ONLINE MARKET4 PLACE.—As a condition of receiving funds from a 

5 Military Education Savings Account, a qualified edu6 cational service provider shall make its services 

7 available for purchase through the online market8 place described in subsection (g). 

9 ‘‘(3) SURETY BOND.— 

10 ‘‘(A) IN GENERAL.—The Secretary shall 

11 require each qualified educational service pro12 vider that receives $100,000 or more in funds 

13 from Military Education Savings Accounts in a 

14 school year to post a surety bond, in an amount 

15 determined by the Secretary, for such school 

16 year. 

17 ‘‘(B) RETENTION.—The Secretary shall 

18 prescribe the circumstances under which a sur19 ety bond under subparagraph (A) may be re20 tained by the Secretary. 

21 ‘‘(g) ONLINE MARKETPLACE.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall seek to 

23 enter into a contract with a private-sector entity 

24 under which the entity shall— 


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1 ‘‘(A) establish and operate an online mar2 ketplace that enables the holder of a Military 

3 Education Savings Account to make direct pur4 chases from qualified educational service pro5 viders using funds from such account; 

6 ‘‘(B) ensure that each qualified educational 

7 service provider on the registry maintained by 

8 the Secretary under subsection (f)(1) has made 

9 its services available for purchase through the 

10 online marketplace; 

11 ‘‘(C) ensure that all purchases made 

12 through the online marketplace are for services 

13 that are allowable uses of funds under sub14 section (e); and 

15 ‘‘(D) develop and make available a stand16 ardized expense report form, in electronic and 

17 hard copy formats, to be used by parents for re18 porting expenses in accordance with subsection 

19 (h)(3). 

20 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

21 this subsection shall be construed to require the 

22 holder of a Military Education Savings Account to 

23 make purchases using the online marketplace de24 scribed in paragraph (1). 

25 ‘‘(h) TRANSFER SCHEDULE.— 


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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

2 the Secretary shall make quarterly transfers of the 

3 amount calculated pursuant to subsection (d) for de4 posit into the account of each eligible military de5 pendent child, except that the Secretary may make 

6 transfers according to another transfer schedule if 

7 the Secretary determines that a transfer schedule 

8 other than quarterly transfers is necessary for the 

9 operation of the education savings account. 

10 ‘‘(2) CHOICE OF SCHEDULE.—The Secretary 

11 shall establish a process under which the parent of 

12 a child on whose behalf a Military Education Sav13 ings Account is established may choose a transfer 

14 schedule other than a transfer schedule determined 

15 under paragraph (1). 

16 ‘‘(3) EXPENSE REPORTS.— 

17 ‘‘(A) SUBMISSION REQUIRED.—Before re18 ceiving a transfer under paragraph (1) or (2), 

19 the parent of an eligible military dependent 

20 child on whose behalf a Military Education Sav21 ings Account is established shall submit to the 

22 Secretary an expense report demonstrating how 

23 funds from the most recent transfer were ex24 pended. 


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1 ‘‘(B) FORMAT.—Each such expense report 

2 shall be submitted using the standardized ex3 pense report form developed under subsection 

4 (g)(1)(D). 

5 ‘‘(i) ROLLOVER.—Amounts remaining in the Military 

6 Education Savings Account of an eligible military depend7 ent child at the end of a school year shall remain available 

8 for use in accordance with subsection (e) until the date 

9 on which such account terminates under subsection (j). 

10 ‘‘(j) TERMINATION AND RETURN OF FUNDS.— 

11 ‘‘(1) TERMINATION.—The Military Education 

12 Savings Account of an eligible military dependent 

13 child shall terminate on— 

14 ‘‘(A) the date on which the child enrolls in 

15 a public elementary school or secondary school 

16 on a full-time basis; 

17 ‘‘(B) in the case of a child who is pursuing 

18 postsecondary education, the earlier of— 

19 ‘‘(i) the date on which the child com20 pletes postsecondary education; or 

21 ‘‘(ii) the date on which the child at22 tains the age of 22 years; 

23 ‘‘(C) in the case of a child who is an indi24 vidual with a disability, the date on which the 

25 child attains the age of 26 years; or 


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1 ‘‘(D) in the case of an individual not de2 scribed in subparagraphs (B) or (C), the earlier 

3 of— 

4 ‘‘(i) the date on which the child at5 tains the age of 22 years; or 

6 ‘‘(ii) the expiration of any 2-year pe7 riod during which funds in the account are 

8 not used in accordance with this section. 

9 ‘‘(2) RETURN OF FUNDS.—Any funds remain10 ing in a Military Education Savings Account on the 

11 date such account terminates under paragraph (1) 

12 shall be returned to the Treasury of the United 

13 States and shall be used to carry out the program 

14 under this section. 

15 ‘‘(k) COMPULSORY ATTENDANCE REQUIREMENTS.— 

16 A State that receives funds under this title shall consider 

17 a child with a Military Education Savings Account for a 

18 school year as meeting the State’s compulsory school at19 tendance requirements for such school year. 

20 ‘‘(l) SPECIAL RULE.—In the case of a child with a 

21 Military Education Savings Account who attends a public 

22 school on a less than full-time basis in a school year— 

23 ‘‘(1) the child may not attend the public school 

24 free of charge; and 


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1 ‘‘(2) funds in the account, in an amount deter2 mined pursuant to an agreement between the parent 

3 of the child and the local educational agency con4 cerned, shall be used to pay for the child’s costs of 

5 attendance at such school. 

6 ‘‘(m) TAX TREATMENT OF ACCOUNTS.— 

7 ‘‘(1) IN GENERAL.—A Military Education Sav8 ings Account is exempt from taxation under subtitle 

9 A of the Internal Revenue Code of 1986. 

10 ‘‘(2) CONTRIBUTIONS AND DISTRIBUTIONS.— 

11 For purposes of subtitle A of the Internal Revenue 

12 Code of 1986— 

13 ‘‘(A) any contribution to a military edu14 cation savings account by the Secretary under 

15 this Act shall not be includible in the gross in16 come of the individual for whose benefit such 

17 account is maintained or the parent of such in18 dividual; and 

19 ‘‘(B) any distribution from a military edu20 cation savings account which is permitted under 

21 this Act shall not be includible in the gross in22 come of the individual for whose benefit such 

23 account is maintained or the parent of such in24 dividual. 


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1 ‘‘(n) FRAUD PREVENTION AND REPORTING.—The 

2 Secretary shall establish a website and a telephone hotline 

3 that enable individuals to anonymously report suspected 

4 fraud in the program under this section. The Secretary 

5 also shall conduct or contract for random, quarterly, or 

6 annual audits of accounts as needed to ensure compliance 

7 with this section. 

8 ‘‘(o) CONTRACT AUTHORITY.—The Secretary may 

9 enter into one or more contracts for the purpose of car10 rying out the responsibilities of the Secretary under this 

11 section. 

12 ‘‘(p) REFUNDS.—The Secretary shall establish a 

13 process under which payments from a Military Education 

14 Savings Accounts to a qualified educational service pro15 vider shall be refunded to the account in the event of fraud 

16 or nonperformance by the provider. 

17 ‘‘(q) RULES OF CONSTRUCTION.— 

18 ‘‘(1) NONAGENCY.—A qualified educational 

19 service provider that receives a payment from a Mili20 tary Education Savings Account pursuant to this 

21 section shall not be considered an agent of the State 

22 or the Federal Government solely because the pro23 vider received such payment. 

24 ‘‘(2) FEDERAL OR STATE SUPERVISION.—Noth25 ing in this section shall be construed to allow any 


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1 agency of a State or the Federal Government to ex2 ercise control or supervision over any qualified edu3 cational service provider. 

4 ‘‘(3) IMPOSITION OF ADDITIONAL REQUIRE5 MENTS.—No Federal requirements shall apply to a 

6 qualified educational service provider other than the 

7 requirements specifically set forth in this section. 

8 Nothing in this section shall be construed to require 

9 a qualified educational service provider to alter its 

10 creed, practices, admissions policy, or curriculum in 

11 order to be eligible to receive payments from a Mili12 tary Education Savings Account. 

13 ‘‘(4) TREATMENT OF ASSISTANCE.—For pur14 poses of any Federal law, assistance provided under 

15 this section shall be considered assistance to the eli16 gible military dependent child or to the parents of a 

17 child on whose behalf a Military Education Savings 

18 Account is established and shall not be considered 

19 assistance to the qualified educational service pro20 vider that uses or receives funds from a Military 

21 Education Savings Account. 

22 ‘‘(r) LEGAL PROCEEDINGS.— 

23 ‘‘(1) BURDEN.—In any legal proceeding in 

24 which a qualified educational service provider chal25 lenges a requirement imposed by the Department of 


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1 Education on the provider, the Department shall 

2 have the burden of establishing that the requirement 

3 is necessary and does not impose any undue burden 

4 on the provider. 

5 ‘‘(2) LIMITATION ON LIABILITY.— 

6 ‘‘(A) IN GENERAL.—No liability shall arise 

7 on the part of an entity described in subpara8 graph (B) solely because such entity awards, 

9 uses, or receives funds from a Military Edu10 cation Savings Account. 

11 ‘‘(B) ENTITY DESCRIBED.—The entities 

12 described in this subparagraph are the fol13 lowing: 

14 ‘‘(i) The Department of Education. 

15 ‘‘(ii) An entity that enters into a con16 tract with the Secretary pursuant to sub17 section (g) or subsection (o). 

18 ‘‘(iii) A qualified educational service 

19 provider. 

20 ‘‘(3) INTERVENTION.— 

21 ‘‘(A) IN GENERAL.—Except as provided in 

22 subparagraph (B), a parent of an eligible mili23 tary dependent child or a parent of a child on 

24 whose behalf a Military Education Savings Ac25 count is established may intervene in any legal 


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1 proceeding in which the constitutionality of the 

2 program under this section is challenged under 

3 a State constitution or the United States Con4 stitution. 

5 ‘‘(B) EXCEPTION.—For purposes of judi6 cial administration, a court may— 

7 ‘‘(i) limit the number of parents al8 lowed to intervene in a proceeding under 

9 subparagraph (A); or 

10 ‘‘(ii) require all parents who have in11 tervened in a proceeding under subpara12 graph (A) to file a joint brief, except that 

13 no parent shall be required to join any 

14 brief filed on behalf of a State that is a de15 fendant in the proceeding. 

16 ‘‘(s) ADMINISTRATIVE EXPENSES.—The Secretary 

17 may use not more than 5 percent of the funds made avail18 able to carry out this section for the direct costs of admin19 istering Military Education Savings Accounts. 

20 ‘‘(t) DEFINITIONS.—In this section: 

21 ‘‘(1) The terms ‘commissioned officer’, ‘enlisted 

22 member’, and ‘warrant officer’ have the meanings 

23 given those terms in section 101(b) of title 10, 

24 United States Code. 


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1 ‘‘(2) The term ‘eligible military dependent child’ 

2 means a child who— 

3 ‘‘(A) has a parent on active duty in the 

4 uniformed services (as that term is defined in 

5 section 101 of title 37, United States Code, ex6 cept that such term does not include an officer 

7 in the National Guard who has been activated); 

8 and 

9 ‘‘(B) in the case of a child seeking to es10 tablish a Military Education Savings account 

11 for the first time, was enrolled in a public ele12 mentary school or a public secondary school for 

13 not less than 100 consecutive days in the pre14 ceding school year. 

15 ‘‘(3) The term ‘institution of higher education’ 

16 has the meaning given the term in section 102 of the 

17 Higher Education Act of 1965 (20 U.S.C. 1002). 

18 ‘‘(4) The term ‘qualified educational service 

19 provider’ means an entity or person that is licensed 

20 by a State to provide one or more of the educational 

21 services for which funds may be expended under 

22 subsection (e), including— 

23 ‘‘(A) a private school; 

24 ‘‘(B) a non-public online learning program 

25 or course provider; 


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1 ‘‘(C) an institution of higher education, 

2 which may include a community college or a 

3 technical college; 

4 ‘‘(D) a public school; 

5 ‘‘(E) a private tutor or entity that operates 

6 a tutoring facility; 

7 ‘‘(F) a provider of educational materials or 

8 curriculum; 

9 ‘‘(G) a provider of education-related thera10 pies or services; or 

11 ‘‘(H) any other provider of educational 

12 services licensed by a State to provide such 

13 services.’’. 

14 (b) TABLE OF CONTENTS.—The table of contents in 

15 section 2 of the Elementary and Secondary Education Act 

16 is amended by inserting after the item relating to section 

17 7012 the following: 

‘‘Sec. 7012A. Military education savings accounts.’’. 

18 SEC. 3. AUTHORIZATION OF APPROPRIATIONS. 

19 Section 7014 of the Elementary and Secondary Edu20 cation Act of 1965 (20 U.S.C. 7714) is amended by add21 ing at the end the following: 

22 ‘‘(f) MILITARY EDUCATION SAVINGS ACCOUNTS.— 

23 For the purpose of carrying out section 7012A— 

24 ‘‘(1) there are authorized to be appropriated 

25 $1,200,000,000 for fiscal year 2020; and 


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1 ‘‘(2) for each fiscal year beginning after fiscal 

2 year 2020, the amount authorized to be appro3 priated shall be the amount authorized to be appro4 priated for the previous fiscal year increased by the 

5 percentage increase in the Chained Consumer Price 

6 Index for All Urban Consumers (as published by the 

7 Bureau of Labor Statistics of the Department of 

8 Labor) over the period of such previous fiscal year.’’. 

Æ 


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