• Tennessee schools could lose tens of millions in funding for low income students due to new federal SNAP requirements.
• State lawmakers are considering a bill to use Medicaid enrollment to identify economically disadvantaged for certain state school funding.
• Without a legislative change, some rural school districts could see budget cuts of over $1 million this year.
• Counting all low-income students who meet income limits for K-12 “economic disadvantage” funding would give $83.7 million more per year.

If lawmakers don’t update how the state determines children to be low-income, Tennessee school districts could see tens of millions less K-12 funding because of new restrictions on federal food programs in President Donald Trump’s Big Beautiful Bill.

New, stricter eligibility requirements for SNAP and TANF implemented in the Trump Administration’s landmark budget bill have caused hundreds of Tennessee children to no longer automatically qualify for state “economic disadvantage” funding for K-12 schools.

Cocke County in upper East Tennessee lost the supplemental funding for more than 340 students this year, Director of Schools Manny Moore told a House committee last month.

That will mean a budget cut of more than $500,000 for the Cocke County Schools this year. 

“That’s a pretty big loss for our rural distressed district of 4,000 students,” Moore told lawmakers.

Tennessee funds public schools by providing $7,295 in base funding for each K-12 student and adding more funding for certain learning needs, including for low-income students. Schools receive $1,824 each year from the state for each student determined “economically disadvantaged.”

The state considers students “economically disadvantaged” only if they are actively participating in federal food aid programs like SNAP and TANF. Tennnessee has some of the strictest restrictions around SNAP in the country.

Unlike many other states, Tennessee does not use Medicaid enrollment to qualify a student for economic disadvantage funding, even though income requirements are the same as for the federal feeding programs that do qualify students.

Because of new federal restrictions and Tenessee’s uncommonly narrow qualifyers, thouands of students who are income-eligible for supplemental K-12 funding do not recieve it.

“These kiddos were devastated that they no longer qualified, but their income did not change,” said Rep. Gloria Johnson, D-Knoxville, a veteran school teacher. 

Funding all low-income children that qualify for the supplemental dollars would cost the state an estimated $83.7 million, according to fiscal analysts.

Gov. Bill Lee’s last two budgets have included “hold harmless” funding to continue stable funding levels as school districts navigate drops in “economically disadvantaged” students because of expiring federal pandemic-era waivers. The state funded 75% of the funding lost because of drops in economic disadvantage qualification in 2026, and Lee is proposing a 100% continuation of that funding this year.

“The Lee Administration is committed to ensuring Tennessee students, especially those in our most vulnerable communities, have access to a quality education,” said Lee spokesperson Elizabeth Johnson.

“The Governor welcomes the General Assembly’s partnership in identifying long-term solutions to ensure every Tennessee student continues to receive the resources they need to succeed,” she added.

A legislative fix?

Two Republicans are working to add Medicaid participation as a qualifier for Tennessee’s K-12 funding formula so that all students who financially qualify for state “economic disadvantage” funding can actually receive it.

While income limits are the same for the state’s Medicaid program, TennCare, participation in TennCare doesn’t automatically qualify a student for that extra K-12 funding. 

House Bill 2485 would change that.

“We’re missing a lot of kids who should qualify but don’t actually participate in SNAP and TANF, many of them however do participate in Medicaid,” said sponsor Rep. Kirk Haston, R-Lobelville.

There were about 630,522 children ages 5 to 18 enrolled in TennCare as of July, according to state fiscal analysts. 

Right now, the bill is stuck behind the state budget.

Not making the change could take a financial toll on school districts as soon as this year.

“Without this change each one of us has a school system in our district that would lose about $2 million,” Haston told the House Finance Committee last week.

In Hancock County, for example, 43% of the county’s 842 students are considered economically disadvantaged, but 76% are enrolled in TennCare. Were the state to certify students’ incomes by TennCare enrollment, the district could qualify for $1.1 million in “economic disadvantage” funding. The district received $711,379 last fiscal year, according to an analysis by EdTrust.

Schools in Sevier, Bedford and Roane counties could each see losses of more than $1 million this year. Meigs County is projected to lose $420,000, while Obion and Wayne counties are set to lose $300,000 each.

Tennessee’s distressed counties could see a combined loss of about $3.3 million, according to an analysis by EdTrust.

“These schools are not looking for additional funding. They’re just looking for the funding that they were promised at the very beginning that was already there, that is leaving,” Haston said. “This is a make-whole bill in my opinion.” 

House Finance Chair Ryan Williams, R-Cookeville, noted this month that Haston’s proposal “is super expensive.”

But much of it is funding the state was already required to spend based on the TISA formula before the federal changes disqualified participants.

Do Republicans support the measure?

Not all Republicans are on board. Reps. Lee Reeves, R-Franklin, and Gino Bulso, R-Brentwood, voted against the measure in the House Education Committee. 

Bulso said Tennessee’s K-12 funding structure, the Tennessee Investment in Student Achievement formula, already has “some unfairness.” 

“The area that I represent is perhaps the leading LEA in terms of being disadvantaged by the allocation of TISA funding,” Bulso said. 

Middle TN districts could see some of the biggest losses

According to a database created by EdTrust, Middle Tennessee districts would be some of the most impacted. Here’s what each district is projected to gain if TennCare enrollment is added as a financial qualifier for “economic disadvantage” funding: