Creates a federal grant program to pay students training to become school psychologists and the institutions that train them. Eligible trainees may receive up to $8,000 per year while enrolled in approved programs; in return they must work full time as a school psychologist in a qualifying K–12 school for at least four academic years within eight years after finishing their studies.

The Assistant Secretary administers the program, issues application and payment rules, can convert unpaid grants into loans if service obligations aren’t met, and must report on program results every two years.