H.R. 2691 — To abolish the Department of Education and to provide funding directly to States for elementary and secondary education, and for other purposes.

This section abolishes the Department of Education and terminates all programs under its administrative responsibility (i.e., applicable programs) effective 30 days after enactment, excluding (1) the Federal Pell Grant program, which provides need-based grant aid to low-income undergraduate students; and (2) the William D. Ford Federal Direct Loan Program, which makes federal student loans directly to borrowers. It transfers authority to administer those two programs to the Secretary of the Treasury. (Thus, student financial aid continues uninterrupted under Treasury oversight, while all other Department of Education functions and programs, such as K-12 support and higher education policy initiatives, end.)

This section states the sense of Congress that states should distribute nonfederal funds for elementary and secondary education to promote competition and parental choice and that parents have a fundamental right to determine their children's education. The section further establishes a program under which the Secretary of the Treasury allocates to each state an amount of funds proportional to the federal individual income taxes paid by its residents (relative to such taxes paid nationwide, as determined after consultation with the Commissioner of Internal Revenue) and directs states to use the funds to support elementary and secondary education.