Trump administration launches school choice program via tax credit

The Treasury Department and the Internal Revenue Service unveiled a proposal on Thursday to establish the nation’s first school choice program with a new federal tax credit. The credit carried out the Trump administration’s policies of supporting parental rights, expanding educational freedom, and returning power to individual states, according to a Thursday statement.

The Education Freedom Tax Credit would apply to individuals making nonprofit donations to support K-12 scholarships. Single filers may receive a credit matching their contribution amount up to $1,700, and married couples filing jointly may receive up to $3,400. The credit marked a new chapter in educational freedom and opportunity, according to a Thursday statement from Treasury Secretary Scott Bessent.

Education Secretary Linda McMahon characterized the credit as a win-win in a Thursday video, adding that the credit served more purposes than a simple school choice voucher. Parents who receive money from private scholarship organizations can use that money toward tutoring, after-school activities, school uniforms, or equipment for special needs students, she said. This is all-around private money that is donated to private scholarship granting organizations, or SGOs, and no state or taxpayer resources are being depleted, she added.

When will the program actually begin? The Treasury Department aimed to formally launch the credit this January. A total of 30 states opted into the program, though all 50 should participate for the benefit of all students and families, Bessent said.

What do critics of school choice initiatives have to say? Groups like the left-leaning Center for American Progress have historically argued that efforts to divert public funding to private or religious schools threaten the viability of public education. The organization says such efforts increase the likelihood of segregated schools and create a system where schools prioritize profit over education.

Dig deeper: Read Lauren Smyth’s report about the long-term value advocates see in school choice programs.