The Obama administration issued new guidelines to allow students to use the bathroom and other facilities based on the gender they identify with -- not the gender on their birth certificate.
Schools are not legally required to follow the guidelines -- but this letter ties compliance to billions of education dollars.
So how is this new directive playing here in the Omaha area ?
Friday we went in search of reaction from schools to parents.
For schools that aren't sure whether or not transgender students should be allowed to use bathrooms shared among students with the sex they identify with, President Obama released jointly with the Department of Education Friday morning, basically saying 'if you have a question about it, refer to civil rights laws crafted in the early 70s'
Speaking with locals in old market and Council Bluffs, people are equally divided in how they feel about the guidelines.
"It's a very amazing and necessary step and I'm extremely happy that our country is finally making it," said James Johnson, a senior at Abraham Lincoln High School in Council Bluffs.
Johnson says it’s the right time.
“The majority of the community is very accepting of homosexuals, transgender and the LGBT community but I also feel there's always those groups that are unaccepting,” Johnson said.
Jefferson High School Junior Cheyanne Buckles says her experience in Council Bluffs doesn't completely reflect tolerance, and the guidelines are much needed.
“It's a huge step for this school district because in the past we haven't been a very accepting school district and sometimes things get a little weird in the school district.” Buckles said.
On the other side of the bridge, lifelong Omaha resident Ken Budka says the guidelines will do more harm than good.
"Every time the government puts its hands in something, it's something that's simple that's now become complicated,” Budka said.
Despite Budka's views that it's not safe for transgender students to share bathrooms with the sex they identify with he says the issue, being as big as it is, hurts transgender students more than anyone.
"No one's really sitting back and looking at the place they're being put in, people who are having an identity crises, and it's really unfair to them and unacceptable,” he said.
No matter the guidelines, Budka says he doesn't like the federal government making local decisions.
"The bottom line is, let's ask President Obama if he would be comfortable with his daughter being in a bathroom with a young man who thinks he's a woman, let's see if he would accept that, or if his daughters would be OK with it.”
Spokeswoman Diane Ostroswski with council bluffs says their school complies fully with non-discriminatory rules and that gender identity is among the "protected classes" in Iowa.
Monique Farmer with Omaha schools said in an email that the district is reviewing the guidelines released this morning and said Omaha has one of "the most diverse districts in the state."
