Extreme Makeover
Federal Private School Vouchers Add New Wrinkle
Bigger isn't better, and beauty is in the eye of the beholder. If you look beneath the cosmetic facade of Trump's One Big, Beautiful Bill, you're likely to conclude that concealing its flawed features is akin to putting lipstick on a pig.
Public school students in states with Republican governors and legislatures, like Iowa, already are living with the unsightly blemishes of private school choice voucher programs. Now, tummy-tucked within the pages of Trump's One Big, Beautiful Bill is the foundation of a federal private school choice voucher program.
What place does a first-of-its-kind federal school voucher have in this massive reconciliation bill designed for passage without bipartisan support? Hint: It has to do with the federal tax code!
Expanding School Vouchers
The bill would provide $20 billion over four years in the form of tax credits to donors (individuals or corporations) who give money to state-level organizations called Scholarship Granting Organizations (SGOs) created to distribute vouchers to pay for private tuition, books, and homeschooling expenses.
Donations of stock typically trigger capital gains. But donors seeking a tax shelter would be able to give appreciated stock without triggering capital gains taxes. These provisions would constitute a direct federal subsidy to private schools, using wealthy individuals as a pass-through. This unprecedented federal government private school voucher scheme is being promoted at the same time Trump is slashing the Federal Department of Education's support for public schools.
The terms are extraordinary. The IRS doesn't typically offer other dollar-for-dollar tax credits. But if you would donate $10,000 to a scholarship-granting organization, you'd receive a tax credit of $10,000. This is about three times as generous as your gift to a children's hospital, veteran's group, church, or any other type of charity. The tax credit would be capped at $5 billion annually in each of the next four years, through 2029. After 2029, the cap would be lifted.
Subsidy for the Well-Off
It shouldn't be surprising. Shortly after his election, Trump signed an Executive order to "prioritize school choice funding".
Federal law prohibits direct government funding to religious schools. Almost 80% of private school students attend a school with a religious affiliation. Unlike public schools, private schools don't have to accept all students. They don't have to educate students according to the Individuals with Disabilities Education Act or accept LGBTQ students. In fact, parental choice is a false narrative. The schools, not the parents, have the right to choose!
There's also little pretense today of lifting up minority students. These federal vouchers wouldn't impose any income restrictions. Any child in a household with less than 300% of their area's median income would be eligible. The Institute on Taxation and Economic Policy has estimated the federal private voucher program would result in a $2.2 billion loss of capital gains revenue over the next decade.
Research in states with school choice programs, including Iowa, shows that the vouchers tend to go to students already attending private schools. Private schools in Iowa, and other states, also have raised their tuition after voucher programs were enacted.
It's been costly in states like Indiana and Oklahoma, which enacted private school voucher programs in 2017 and 2024. Oklahoma caps annual private voucher expenditures to limit the budget impact. In Arizona, Florida, and Ohio, private school choice costs are close to or above $1 billion annually, leading to budget shortfalls.
Beginning this fall in Iowa, income restrictions for eligibility will be lifted. New numbers released in Governor Kim Reynolds’ budget indicate that private school vouchers are among the fastest-growing portions of the state budget. It's expected to cost Iowa over $1 billion annually within four years. There's also little accountability for how public funds are spent.
Perhaps most importantly, research shows that when private schools open vouchers to all students regardless of income, students experience zero to negative academic improvement. Could this be because private schools, unlike public schools, are not held accountable to taxpayers?
This federal voucher measure still may violate the principles of the budget reconciliation progress, which specifies that reconciliation is limited to budget and spending. The Byrd Rule in the Senate decrees that “extraneous” matters may not be included in a budget bill. (It's also known as the "Byrd Bath" rule.) But it could become law with only 51 votes in the Senate, instead of the usual 60. Republicans hold 53 seats.
Playing Zero Sum Game
The U.S. system of public education helped to create a strong middle class. Educated citizens form the bedrock of our democratic republic. Public schools are the brick and mortar binding our communities together and bridging the divides in our country.
As a former school board president from 1996 to 2005, I can testify that parents freely exercised their choices to open-enroll their children, primarily for reasons of convenience –not academic quality. They also didn't hesitate to home-school. High school students could enroll in dual credits through local community colleges, or complete online AP classes. There was plenty of choice then – and now.
According to an analysis of 2022 Census data, about 12% of K-12 students in the U.S. attend private schools, while the majority, 84%, attend traditional public or charter schools. This Republican proposal to use a fire hose to pour about $20 billion into Federal private school vouchers is an insult to public schools that must educate all students, regardless of their physical or intellectual needs.
After decades of resistance, Republican Governor Greg Abbott finally forced his will on families in Texas by signing a $1 billion school voucher bill. The program allows for spending public funds on private schools, including religious schools, and homeschooling. Democrats and rural Republicans fought it tooth and nail. Abbott took a page out of Iowa's governor Kim Reynolds' book to throw his support behind candidates who agreed with him.
Iowans regard private school vouchers as a zero sum game. A total of 41% of Iowa counties have no private schools. A March 2023 poll showed 62% of Iowans opposed private school vouchers. It made no difference to Gov. Reynolds, who used the hardball tactics of endorsing primary opponents of legislators who opposed her push.
For years, private school enrollment decreased statewide in Iowa. Since Education Savings Accounts have been allowed, that trend has reversed. Not only has enrollment increased, but more private schools have been opening (in urban areas).
Nothing Conservative about Public Funding for Private Schools
The double-speak promoting this push for funding K-12 private schools with public funds is blatantly apparent. Whatever happened to Republican support of local control? Or small government? How many times have we heard that education is a state responsibility? This is a clear power grab by the federal government. And it's happening at the same time Trump has shut down the Federal Dept. of Education on the pretense of "returning education to the states". . . where it's always been!
Other states have turned down public funding for private school vouchers. Nebraskans won a ballot measure to overturn a 2024 Nebraska law providing taxpayer money for private school tuition. Kansas, Mississippi, Kentucky, and South Dakota have turned it down. North Dakota's Republican governor recently vetoed a private school voucher bill due to a lack of equitable treatment for the public school sector. Not surprisingly, these are rural states where public school support is strong, and often the only option. Private school choice vouchers aren't a conservative cause in rural America.
In fact it seems un-American to allow wealthy individuals and corporations to fund vouchers for private secular or religious school students, and especially in states where voters would reject such a top-down mandate. This federal private school voucher program would leave them with no choice. It would further erode the concept of public education as a common good.
Josh Cowen, Michigan State University education policy professor, is author of The Privateers: How Billionaires Created a Culture War and Sold School Vouchers. He points out:
"One thing is certain: the case for vouchers, whether by scholars, writers, lawyers, lobbyists, or billionaire heirs has always been a deliberate construction,' he writes. "It is the architecture of an assault on public education as a defining American institution. This is no movement, it is rather more a coup, and it has been a rightwing political operation from the start."
It also seems to be an obvious strategy to allow private business access to new sources of revenue streams. At the same time, the coffers of federal government – and states that tax capital gains – would be drained, and the future of public school students diminished.
The Senate still must vote on this One Big, Beautiful Bill. It's likely to apply some beauty hacks of its own as it deliberates. But there's not enough lipstick to make this pork-barrel private school choice voucher program look good. We need to call it out for what it is: A pig in a poke. Oink! Oink!
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Thank you, so insightful!
Thank you, Cheryl. Larry and I and our sons were educated in excellent public school systems back in the day when education was seen as a public good. We were taught by educators who understood the influence of their work. We learned the importance of critical thinking, the importance of a civil government, the value of language and the arts, and how history, on every level, would give us the tolerance, understanding, and empathy to become good citizens. It breaks my heart to watch the destruction of public education because billionaires do not want students in their work places who are taught to think instead of just swallow whatever they are fed.