Liberals see promise in tax-credit scholarships; conservatives see dangers

New York will opt in to the federal scholarship tax credit program (FSTC) , says Gov. Kathy Hochul. So will Colorado. Oregon will not participate. Gov. Tina Kotek "cannot trust that any education policy coming from Trump’s White House is in the best interest of Oregon’s kids and our public education system." Minnesota and Wisconsin also are out.

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FSTC "offers taxpayers dollar-for-dollar tax credits of up to $1,700 for donations to organizations that award K-12 scholarships," reports EdWeek's Matthew Stone. In addition to paying for private school tuition and home-school costs in some states, the money could for tutoring, technology and other needs for public-school students. But only if the state's governor decides to let scholarship-granting organizations give out awards to students in their states. Thirty-one states have opted in.

Public schools and public-school students will be able to use the scholarships to pay for after-school tutoring, special education services, and other supports, says the Treasury Department, which is drafting regulations.

"If policymakers are making their decision strictly on the merits, they will see it's a no-brainer," says Jorge Elorza, CEO of Democrats for Education Reform.

"Students will be eligible for scholarships as long as their family income is 300% of their area’s median income or lower," writes Stone. "That threshold encompasses most U.S. students, including families earning more than $500,000 in Westchester County, N.Y., on the high end and $114,000 in Wolfe County, Ky., on the low end."

Tax-credit scholarships could create a "slush fund for public schools" and a way for government regulators to control private schools, warns Daniel Buck of the conservative American Enterprise Institute. It "could be an utter disaster."

"Ideally, this program will create a funding stream to allow struggling Catholic and Lutheran schools to prosper, homeschools and microschools to flourish, and public schools to offer a litany of new, supplemental services," he writes.

More likely, he predicts, school districts could send out mass emails to encourage donations to their preferred SGO, one that would fund the district but not homeschooling co-ops."

"In time this program will become a stick that the federal government can wield to thwack private schools into submission," he writes. Once their budgets become dependent on federal scholarships, they'll lose their academic independence. Administrations change.

"Administrations have leveraged grants and Title IV funds to force universities into compliance — from eradicating DEI to Title IX compliance," Buck writes. "Any time an institution accepts public monies, it invites regulation."

Buck wants private schools to be able to compete for students with tuition-free public schools. He wants new educational models to flourish. But he's worried.