Federal tax credit could steer $10 billion to private school scholarships

Nonprofit agencies that give private-school scholarships to low-income families say they expect Congress to pass tax credit legislation handing them $10 billion for another 2 million students.

The Educational Choice for Children Act would allow taxpayers to deduct up to 10% of their adjusted gross income and corporations up to 5% of taxable income as donations to private K-12 scholarship funds. It builds on policies in 21 states, including Pennsylvania, Florida and Arizona, allowing similar deductions on state tax returns.

Agency leaders interviewed by The Washington Times expressed optimism that the act will pass the Senate and House in May’s budget reconciliation process, allowing them to distribute an average of $4,500 per student to a growing list of applicants after President Trump signs it.

“This is an important issue for poor families seeking better options for children who don’t fit into public schools,” said Joshua D. Hale, president and CEO of the Big Shoulders Fund, which helps roughly 5,000 students in the Chicago area pay for Catholic schools that charge $5,500 to $10,000 a year. “A federal tax credit is one more way to help families on the margins meet their child’s needs.”

Mr. Hale, whose privately funded charity primarily serves families of four with annual incomes up to $45,000, said the federal legislation would greatly benefit them because Illinois does not allow state deductions.

In places that have allowed state tax credits over the past 25 years, families can access the money only by applying to approved charities.

Although these scholarship groups do not see federal tax credits as a partisan issue, they acknowledge that Republicans are more likely than Democrats to vote for them.

“The biggest difference is you now have an executive branch committed to school choice, and Congress is listening,” said Norton Rainey, CEO of ACE Scholarships in Colorado.

Founded in 2000, ACE Scholarships has awarded 100,000 grants worth $330 million to children of modest means to attend Catholic, secular and other private schools.

Last year, Mr. Rainey said, the Denver nonprofit distributed $4,000 apiece to almost 25,000 students in 12 states, including Delaware and Utah, to attend private campuses with annual tuitions averaging $8,000 for middle school and $10,000 for high school.

Some school choice advocates estimate that the $10 billion federal tax credit would nearly triple the sum that 1.04 million U.S. students received in 2024 from state-level vouchers, school choice laws and personal income tax or tax credit scholarships.

The 175 organizations supporting a federal tax credit include the Association of Christian Schools International, the U.S. Conference of Catholic Bishops and the California Policy Center.

“The ECCA comports with President Trump’s vision for improving K-12 education outcomes by empowering families and communities,” said Tony de Nicola, board chairman of the Invest in Education Coalition.

Mr. de Nicola’s advocacy group counts nearly 600 school choice scholarship funds nationwide and expects more to appear if the act becomes law. Active groups include most Catholic dioceses and 200 in Pennsylvania alone, which enacted state tax incentives in 2001.

The Children’s Scholarship Fund awarded $84 million in publicly and privately funded grants to 35,138 low-income students in 20 states for the 2024-2025 academic year.

The New York City-based fund primarily serves K-8 students, including more than 200 Catholic, Jewish, Islamic, Eastern Orthodox, secular and homeschooling institutions.

“A federal tax credit would be a game-changer in places like California and New York, where school choice programs are unlikely to pass at the state level,” said Elizabeth Toomey, a spokeswoman for the Children’s Scholarship Fund. “There’s a real need for it because the definition of education has been expanding.”

After the early years of the COVID-19 pandemic, millions of parents pulled their children out of struggling public campuses that imposed virtual learning requirements. Experts later blamed virtual learning for standardized English and math scores falling to historic lows. Most of those families shifted to homeschooling or private schools.

Under the Biden administration, united opposition from the White House and Democratic-controlled Senate blocked the Educational Choice for Children Act from advancing when Republicans introduced it in 2022 and 2023.

The nation’s largest teachers unions, which have long supported the Democratic Party, argue that school choice laws favor wealthy campuses and siphon tax dollars away from the 90% of U.S. students who attend public institutions.

“We won’t be silent as anti-public education politicians try to steal opportunities from our students, our families and our communities to pay for tax cuts for billionaires,” Becky Pringle, president of the National Education Association, said in a March 20 statement. “Together with parents and allies, we will continue to organize, advocate, and mobilize so that all students have well-resourced schools that allow every student to grow into their full brilliance.”

Dozens of Republican lawmakers, led by Sen. Bill Cassidy of Louisiana and Rep. Adrian Smith of Nebraska, reintroduced the Educational Choice for Children Act in the Senate and House at the end of January.

“When you give parents a choice, you give kids a better chance at achieving their dreams,” said Sen. Tim Scott of South Carolina, a co-sponsor of the Senate bill.

That same day, Mr. Trump signed an executive order directing the Education Department to make federal dollars available for parents to spend on the schools of their choice, bolstering expectations that the Educational Choice for Children Act will become law this year.

“The Trump administration is committed to expanding education options for parents in their children’s education,” Education Secretary Linda McMahon said Monday, commenting on new guidelines for states to use federal grants for that purpose.

Sen. Bill Cassidy, Louisiana Republican and lead sponsor of the Senate ECCA bill, pledged Tuesday to push for its inclusion in May’s reconciliation process.

“School Choice is part of the Trump agenda Republicans were elected to pass,” Mr. Cassidy told The Washington Times. “Including ECCA helps create a reconciliation bill that reflects the president’s entire agenda,”

Correction: The original version of this story misidentified some states with tax credits.