Tennessee Schools Face Funding Cuts Due to Changes in Federal Food Aid Programs

Lawmakers push to expand eligibility for state 'economic disadvantage' funding to include Medicaid enrollment

Apr. 15, 2026 at 2:34am

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Tennessee schools could lose tens of millions in funding for low-income students due to new federal restrictions on SNAP and TANF eligibility. State lawmakers are considering a bill to use Medicaid enrollment to identify economically disadvantaged students and qualify them for supplemental state funding, which could provide an additional $83.7 million per year to school districts.

Why it matters

The changes to federal food aid programs have caused hundreds of Tennessee children to no longer automatically qualify for state 'economic disadvantage' funding, resulting in budget cuts of over $1 million for some rural school districts. This disproportionately impacts low-income and marginalized communities that rely on this funding to provide essential resources and support for students.

The details

Tennessee funds public schools by providing base funding plus additional 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.' However, the state only considers students 'economically disadvantaged' if they are actively participating in federal food aid programs like SNAP and TANF, which have new, stricter eligibility requirements. Unlike many other states, Tennessee does not use Medicaid enrollment to qualify a student for this economic disadvantage funding, even though the income requirements are the same.

  • In 2026, Gov. Bill Lee's budget included 'hold harmless' funding to continue stable funding levels as school districts navigated drops in 'economically disadvantaged' students.
  • As of July, there were about 630,522 children ages 5 to 18 enrolled in TennCare, Tennessee's Medicaid program.

The players

Manny Moore

Director of Schools for Cocke County, which lost supplemental funding for more than 340 students this year, resulting in a budget cut of over $500,000.

Rep. Gloria Johnson

A Democratic state representative and veteran school teacher who said the students who no longer qualified for economic disadvantage funding were "devastated" even though their income did not change.

Rep. Kirk Haston

A Republican state representative sponsoring a bill to add Medicaid participation as a qualifier for Tennessee's K-12 funding formula so that all students who financially qualify can receive the economic disadvantage funding.

Rep. Ryan Williams

The Republican chair of the House Finance Committee, who noted that Haston's proposal to use Medicaid enrollment is "super expensive."

Rep. Lee Reeves

A Republican state representative who voted against Haston's bill in the House Education Committee.

Rep. Gino Bulso

A Republican state representative who voted against Haston's bill in the House Education Committee, saying Tennessee's K-12 funding structure already has "some unfairness."

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What they’re saying

“That's a pretty big loss for our rural distressed district of 4,000 students.”

— Manny Moore, Director of Schools, Cocke County

“These kiddos were devastated that they no longer qualified, but their income did not change.”

— Rep. Gloria Johnson, State Representative

“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.”

— Rep. Kirk Haston, State Representative

“Without this change each one of us has a school system in our district that would lose about $2 million.”

— Rep. Kirk Haston, State Representative

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

— Rep. Gino Bulso, State Representative

What’s next

House Bill 2485, which would add Medicaid participation as a qualifier for Tennessee's K-12 funding formula, is currently stuck behind the state budget. If the bill does not pass, school districts across the state could see significant funding losses as soon as this year.

The takeaway

The changes to federal food aid programs have had a disproportionate impact on low-income and marginalized communities in Tennessee, threatening to deprive many students of essential educational resources and support. Expanding the eligibility criteria for state 'economic disadvantage' funding to include Medicaid enrollment could help ensure that all students who financially qualify can receive the funding they need to succeed.