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Forbes
09-07-2025
- Business
- Forbes
Trump's Big Beautiful Bill Adds Private School Tax Credit—Here's How It Works
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. A provision in the One Big Beautiful Bill Act, recently signed into law by President Trump, will create the country's first federal tax credit for donations to private schools. It aims to give families more choice in their child's education, but critics warn it could divert much-needed funds from public schools and widen inequalities. Benefits will come in the form of a tax credit, but the exact procedure is a little convoluted, considering the program was formed as a way to encourage donations to education non-profits. Eligible American taxpayers who earn up to 300% of their area's median income can donate up to $1,700 to an eligible educational non-profit and receive a dollar-for-dollar tax credit. The donation would be awarded in the form of a scholarship by private schools to fund tuition, boarding, books, and other expenses for students. States must opt in to the tax credit, so it may not be available everywhere. Whether or not these types of programs are helpful is up for debate. Advocates for the program, such as the American Federation for Children , argue it will grant parents more freedom to pick a school that fits their child's needs and provide a higher quality education. In an October 2023 statement—released years ahead of the bill's approval—the National Education Association explained that vouchers and voucher-based programs 'erode' public education by detracting already-limited resources from public schools open to all to private schools that 'can pick and choose their students.' According to 2021 Census data, public school enrollment totaled 65.1 million students while private school enrollment clocked in at 14.4 million. Education Week, a nonpartisan education news organization, estimates that the new tax credit scholarship program would disproportionately invest more money in private schools than public schools. It states the new program would invest five times more money than annual funding in the consolidated K-12 grant program for public schools, and at least 20 times more than the country puts towards the largest current school choice investment in charter schools. The Urban Institute, a nonpartisan non-profit research organization, estimates the reconciliation bill would divert up to $5 billion in tax dollars to support up to 1 million students in private schools. Experts like Randi Weingarten, president of the American Federation of Teachers, worry that the cost to taxpayers could balloon over $50 billion, seeing as the tax credit is uncapped. '[That's] nearly double what the federal government spends on helping poor kids and kids with disabilities,' Weingarten said to The New York Times . Whether private schools outperform public schools has long been debated. Landmark research, including the 1966 Coleman report, suggests that differences in school funding don't explain achievement gaps. Instead, these gaps come down to family socioeconomic background and the overall income diversity of a school. The Coleman analysis of more than 4,000 schools was reinforced by researchers at John Hopkins University. Recent data continues to question the long-term advantages of private schools. One study published in the Educational Researcher journal found there are no academic benefits of attending private school in the long run. Similarly, an analysis of research by Chalkbeat finds that after four years in a voucher program, children attending private schools in Louisiana saw a decline in standardized test scores in math, English, and science. Another subset of kids in D.C recovered in the third year after declining test scores, but the study noted that overall, 'vouchers had no clear effect on test scores.' Currently, the Trump administration has frozen nearly $7 billion in funding for public schools, stating the funds were 'under review,' including support for teacher training, after-school and summer programs, English-learning programs, and more.
Fox News
09-07-2025
- Business
- Fox News
How Trump's 'big, beautiful bill' will impact K-12 education
President Donald Trump's "big, beautiful bill" will have a huge impact on education in the country, considered "the biggest piece of legislation that's ever passed in school choice history" by establishing a federal tax-credit scholarship program. American Federation for Children President Tommy Schultz told Fox News Digital that he has been working on the legislation for 10 years. "Every state essentially will have the opportunity to potentially have school choice thanks to this tax-credit scholarship, which will allow any individual in America to donate $1,700 to a local scholarship group, and they can get a full 100% tax-credit, dollar-for-dollar tax-credit. And at the end of the day, this could help millions of families get access to the school of their choice," Schultz said. The American Federation for Children is a pro-school choice group, pushing to allow parents to send their kids to schools outside their neighborhood or opt out of going to public school. Trump signed the $3.3 trillion bill last week, including key provisions that would permanently establish individual and business tax breaks included in Trump's 2017 Tax Cuts and Jobs Act, and incorporate new tax deductions to cut duties on tips and overtime pay. The bill instituted a federal tax-credit scholarship, seeking to expand education opportunities in all 50 states. "Tax credits are a funding mechanism for private school choice programs. Whereas in the states, you have scholarship programs – those are direct appropriations from the state government coffers," Schultz said. Schultz added that the federal tax-credit scholarship program allows taxpayers to reduce their tax bill, the same type of mechanism on the state level. "This one in particular allows individuals to invest in K through 12 educational opportunities for kids and particularly lower-income kids. This is just an unmitigated win for the school choice movement and for families all across the country," Schultz said. Tax-credit scholarships, usually operated at the state level, are a form of school choice that allows individuals or businesses to receive full (100%) or partial credits when they contribute to a nonprofit that provides private school scholarships. The tax code change is permanent because there is no expiration date in the law. "It can't be politically changed with a new administration in the way that if it was like many of what you see, the appropriate funds that come out of the Department of Education, which often have nefarious strings attached with local schools," Schultz said. "This is a perfect model to bring to the federal government because it still respects the ability for states to operate their school choice programs, their public schools, and it's also just a simple tax code change that allows you to pass this under the budget reconciliation rules." In order to be eligible for the federal tax-credit scholarship program, recipients must be under 300% of their area's median income, based on the Department of Housing and Urban Development formula, covering 85-90% of families. State governments will designate which scholarship groups can receive funds. When Fox News Digital reached out to the Department of Education for comment on Schultz's remarks, a spokesperson referred to Secretary Linda McMahon's post on X, claiming that the bill "includes massive expansion in school choice." The federal government's involvement in school choice indicates the growing momentum of the policy sweeping the country after several states passed universal school choice legislation, with New Hampshire being the most recent. Schultz argued that it was necessary for the federal government to get involved because the policy allows taxpayers to circumvent anti-school choice policies and provides them an opportunity to support school choice in states that do not have it. "Look, our education system is in freefall. As you saw with the latest national report card data that came out, especially COVID, we're down to 30 and 40-year lows in our educational outcomes," he said. School choice policies typically face hurdles in blue states and where teachers' unions have significant influence. Left-leaning teachers' unions usually reject school choice measures since they claim it debilitates public school funding and resources. No Democratic-controlled state has passed school choice legislation. "Every kid in America deserves the chance to get access to the best school of their choice," Schultz said. "And if the political power of the unions is stopping states from building out robust options for their kids, and they're trapping kids in the district schools that they don't want to go to, but are forced to go to, is all the more reason that a simple tax code change would allow for a huge revolution in the ability for families all across the country to choose the best schools for their sons and daughters, especially for lower-income families that are desperately seeking these options."
Forbes
17-06-2025
- Politics
- Forbes
Who Benefits From School Vouchers?
Some education choices come with money attached School vouchers were sold by supporters as a way for students from low-income families to escape under-performing schools. Pro-voucher groups like the Devos-funded American Federation for Children have called school choice the civil rights issue of our time. But investigations continue to show that voucher programs actually serve a different group. Craig Harris reported on an investigation by the 12News I-Team looking at the results of Arizona's universal voucher program. 12News found that the billion-dollar taxpayer-funded voucher program which supported students who had never been in public school to begin with and which hurt high-performing public and charter schools. Arizona's taxpayer-funded school voucher program was made universal in 2022, meaning that the vouchers were then available to all students with no restrictions or requirements. In that year, the state department of education said that 75% of new voucher applicants had never attended a public school. 12News also found that rather than escaping failing schools, thousands of students were leaving some of the highest-rated districts in the state, leading to funding losses for those schools. Four of the top five losing districts (Deer Valley, Chandler, Peoria and Scottsdale) are A-rated schools the fifth, Mesa, is B-rated). Vouchers are also costing charter schools students and dollars. For example, 12News found that the highly-rated Basis Peoria charter school campus has lost more than 400 students. Other states report similar findings. A new report from the Department of Public Instruction in North Carolina finds that over 85% of new school voucher recipients were not previously in public school. Kris Nordstrom, senior policy analyst at the Education and Law Project, reports that the North Carolina Education Assistance Authority found that 20% of new voucher recipients are families in the highest income bracket. Central Florida Public Media reported that in 2023, 69% of new voucher recipients already attended private school. In 2024, Iowa Starting Line reported that two thirds of Iowa students receiving taxpayer-funded vouchers already attended private school. Nor is the trend a new one. Back in 2014, 75% of students applying for taxpayer-funded vouchers in Wisconsin were not leaving public schools, as reported by Edgar Mendez od the Milwaukee Journal Sentinel. Only a small number of voucher students are actually leaving low-performing schools. One might ask, if vouchers are not solving the issue of low-income students being trapped in low-performing schools, what is Plan B? At the same time, taxpayer-funded vouchers for students who have never attended public schools adds to the total number of students that state taxpayers are funding. In other words, the money cannot follow the child from the public school because it was never there. In some states, that means school funding is reduced even though the school expenses are not. As the U.S. Congress considers the creation of federal vouchers via the Big Beautiful Bill, legislators may want to consider how existing taxpayer-funded school vouchers are currently being used.
New York Times
23-05-2025
- Politics
- New York Times
Religious Education Lost at the Supreme Court. But It's Winning Everywhere Else.
A surprise Supreme Court ruling on Thursday prevented the nation's first religious charter school from opening in Oklahoma, in a 4-to-4 vote that seemed to put the brakes on a conservative movement to expand government funding for religious education. But the ruling may prove to be only a speed bump for the conservative education agenda. Conservatives are poised to get much of what they want, and more, through a powerful school voucher movement that has raced through Republican state legislatures and is on the precipice of coming to all 50 states. On the same day that the Supreme Court rejected government support for religious education in charter schools, the House narrowly passed an all-encompassing piece of domestic policy legislation that creates, for the first time, a federal school voucher program. The bill sets aside $5 billion to fund vouchers for families, who can use the money to pay for K-12 private school tuition, home-schooling or virtual learning. It would bring vouchers even to liberal states like New York and California that have long resisted the concept, and is expected to reach as many as 1 million students nationwide with much of the money going to pay for religious education. Nearly 80 percent of private school students attend a religiously affiliated school. 'On balance, this is a massive day of victory,' said Tommy Schultz, chief executive of the American Federation for Children, which supports the school voucher movement. Despite the Supreme Court ruling, he predicted 'growth in religious school choice in America,' driven by increased political support for vouchers. More than 1 million American students already use taxpayer dollars to pay for private education or home-schooling costs, double the number from 2019. Last month, Texas became the last large Republican-leaning state to pass private-school choice legislation, and advocates quickly shifted their attention to Washington. The program that passed the House is structured as a $5 billion tax credit. It amounts to a dollar-for-dollar tax write-off, for every dollar in cash or stock donated to certain nonprofits that then grant private-education scholarships to students. A vast majority of American households with children would be eligible to receive a scholarship, as long as they do not earn more than 300 percent of their area's median income, which is equal to over $300,000 in some parts of the country. The option to fund the scholarships is expected to be popular with wealthy taxpayers. It offers a much larger tax break than donations to other charities, including churches and community nonprofits. 'It's unprecedented,' said Carl Davis, research director at the Institute on Taxation and Economic Policy, a liberal think tank. He said many donations could come in the form of stock, potentially allowing donors to avoid paying capital gains taxes. The plan now heads to the Senate, where Republicans are generally supportive, though they may still adjust some of the program's details. Some Republican senators, like Ted Cruz of Texas, support a larger program of $10 billion, with no income constraints on who can use vouchers. Because the bill would be passed using a special budget process, it can become law with only 51 votes in the Senate. Republicans hold 53 seats. While voucher advocates once focused on providing more options to low-income students, students with disabilities and other disadvantaged groups, they are now pushing vouchers for most everyone. The movement is backed by powerful conservative donors, like the billionaire Jeff Yass, who have funded the political campaigns of Republican voucher supporters. They have overcome resistance from some conservatives who — like many liberals — long worried that vouchers would harm public schools, by decreasing enrollment and funding levels. Becky Pringle, president of the National Education Association, the nation's largest teachers' union, said the bill would 'siphon crucial funding from public schools — serving 90 percent of students — and redirect it to private institutions with no accountability.' Riding a wave of pandemic dissatisfaction with public education, 10 states now operate private-school choice programs that are available to all or nearly all students, up from just two states in the 2022-23 school year. Five more states — Alabama, Idaho, Louisiana, Tennessee and Wyoming — are set to begin similar programs next school year, according to FutureEd, an education think tank at Georgetown University that has tracked legislation. In many cases, early reports show that expansive voucher programs often subsidize fairly affluent families whose children were already enrolled in private school. The Supreme Court allowed school vouchers to be used for religious education in 2002. The court said that vouchers do not violate the establishment clause of the First Amendment, which prohibits the government from establishing religion, because parents act as intermediaries and can choose from an array of school options, both secular and religious. The case in Oklahoma sought to take government funding of religious education a step further, with direct public funding of a religious charter school. Across the country, charter schools are public, nonsectarian and funded with taxpayer dollars, similar to traditional district schools. But they are run independently, often by nonprofits, and are meant to offer alternatives to families, who can attend regardless of ZIP code. In Oklahoma, an online Catholic school proposed by the Archdiocese of Oklahoma City and the Diocese of Tulsa sought to open as a charter. It would have been fully funded by taxpayer dollars, but its curriculum would have incorporated Catholic doctrine. Supporters of the school, St. Isidore of Seville Catholic Virtual School, challenged charter schools' status as public schools, arguing that they are in practice more like private schools in contract with the government, not public entities. The Supreme Court rejected that plan without explanation, in a 4-to-4 vote that was possible because Justice Amy Coney Barrett recused herself. The tied vote sets no national precedent, leaving open the possibility that the court, which has expanded the role of religion in other cases, could take up the issue again later with its full conservative majority. The Oklahoma case was championed by supporters of religious freedom, who argue that barring religious groups from operating charter schools, when other groups are free to do so, is religious discrimination. Some school choice advocates celebrated the court's ruling and the House bill as the best of both worlds, noting that it avoids the complicated legal battle and upending of the education landscape that could have resulted from redefining charter schools as private. 'It's really a win for the school choice movement on both counts,' said Michael J. Petrilli, president of the Thomas B. Fordham Institute, a center-right think tank, who supports school choice and was among those who worried that allowing religious charters would have posed problems for charter schools in blue states. 'It preserves charters as a strong option in the public school system,' he said. 'But it opens the door to private school choice everywhere.' A federal voucher program could be a boon to Catholic schools in particular, which make up the largest share of private school enrollment, at 35 percent. 'We've been supporting it all along,' said Sister Dale McDonald, vice president of public policy for the National Catholic Educational Association, which represents Catholic school educators. The federal bill was in many ways 'more significant' than the Oklahoma case would have been, she said, because if it passes, families across the nation will be able to use it to help pay for tuition at existing schools. Even in Oklahoma, the spread of vouchers means that St. Isidore may still be able to use public money to support its goal of offering online Catholic education to students in rural parts of the state. Around the same time St. Isidore was initially approved as a charter, Oklahoma passed legislation giving parents up to $7,500 per child for private school tuition. After the Supreme Court ruling on Thursday, the board for St. Isidore said in a statement that it was 'exploring other options' for offering virtual Catholic education statewide.
New York Times
13-05-2025
- Business
- New York Times
Federal School Voucher Proposal Advances, a Milestone for Conservatives
Advocates for private-school choice celebrated this week as a federal schools voucher bill moved closer to becoming law, a major milestone that eluded their movement during President Trump's first term. The House Republican budget proposal that advanced on Monday would devote $5 billion to federal vouchers for private-school tuition, home-schooling materials and for-profit virtual learning. The program in the budget bill could bring vouchers to all 50 states for the first time, including Democratic-leaning ones that have long rejected the idea. Supporters hailed the proposal as 'historic' and a 'huge win,' but some cautioned that there was still much legislative haggling ahead. 'Ultimately, every child, especially from lower-income families, should have access to the school of their choice, and this legislation is the only way to make that happen,' said Tommy Shultz, chief executive of the American Federation for Children, a private-school choice advocacy group. Opponents of the proposal were stunned at its sweeping implications. While it is in line with President Trump's agenda, it had been considered somewhat of a long shot to make it out of the House Ways and Means Committee, because of its cost. The program is structured as a $5 billion tax credit, allowing donors to reduce their tax bill by $1 for every $1 they give to nonprofits that grant scholarships — up to 10 percent of the donor's income. The option to donate is expected to be popular with wealthy taxpayers. The resulting scholarships could be worth $5,000 per child, reaching one million students. Any family who earns less than 300 percent of their area's median income — which equals over $300,000 in some parts of the country — could use the funds, meaning a vast majority of families would be eligible. The proposal could pass through the budget reconciliation process, and could become law with only 51 votes in a Senate where Republicans hold 53 seats. In the wake of the Covid-19 pandemic, many Republican-led states passed new private-school choice laws, overcoming decades of resistance from teachers' unions, Democrats and rural conservatives. Opponents have long argued that vouchers hurt traditional public schools, by decreasing enrollment and funding levels. And they have pointed out that lower-income neighborhoods and rural areas often have few private schools, making it difficult for many families to use vouchers. 'We are against giving people tax breaks to defund public schools,' said Randi Weingarten, president of the American Federation of Teachers, the nation's second-largest education union. She pointed out that while Mr. Trump and congressional Republicans have said they want to invest in work force education, artificial intelligence education and other priorities for student learning, they have consistently proposed cutting funding to public schools, which educate nearly 90 percent of American students. 'They don't believe in public schooling,' she said. 'What you're seeing here is the fragmentation of American education.' A boom in new private-education options, like virtual learning and microschools, has already changed the landscape — as has an influx of campaign spending from conservative donors, like the financier Jeff Yass, intended to build support for private-school choice. Last month, Texas became the last major Republican-led state to pass such legislation. Advocates quickly shifted their focus to Congress and the opportunity to push a federal voucher bill. Senator Bill Cassidy, Republican of Louisiana, is the sponsor of a Senate bill similar to the House proposal, and celebrated its inclusion in the budget package. 'Expanding President Trump's tax cuts is about preserving the American dream,' he said in a written statement. 'Giving parents the ability to choose the best education for their child makes the dream possible.' But the proposal will still have to overcome opposition, on both the left and the right. Advocates for public schools have said that the new generation of vouchers and education savings accounts, which are often available to relatively affluent families, are a subsidy to parents who can already afford private education. In Florida, which has more children using vouchers than any other state in the nation, some public-school districts have experienced enrollment declines and are considering shutting down schools or cutting teaching positions. Even some conservative parental-rights activists oppose the creation of a federal program, which they worry could create a regulatory pathway that could eventually be used to impose government requirements on home-schooling parents or private schools — for example, by requiring standardized testing, which is not mentioned in the current proposal. 'The federal government should extricate itself from K-12 education to the fullest extent possible,' said Christopher Rufo, a leading crusader against diversity programs in schools, and a supporter of school choice. 'It's best left to the states.'
