On the Education Exchange podcast this summer, I told Paul Peterson that Congress swung for the fences on school choice in the One Big Beautiful Bill Act, but only hit a single. If we’re not careful, that single could lead to the education equivalent of a rally-killing double play.
The final version of the act contains compromises that undermine the tax credit provision from the first pitch. The first and largest is the cap on individual taxpayer credits at $1,700. If we do some back-of-the-napkin math, assuming an average scholarship of $7,500, that means for every 1,000 scholarships, a scholarship-granting organization (SGO) would need 4,412 donors contributing $1,700 each. As someone who has done his fair share of fundraising, I know that the effort to identify, contact, follow up with, track, and do all the other administrative work for that many people will be enormous.
The second compromise made the program opt-in for states. For a program heralded as one that could bypass the special interests that have blocked school choice in dozens of states, especially blue states, it put the ball back firmly in their glove. The argument is that states won’t want to turn down “free” federal money, but states do that for ideological reasons all the time. This also opens the program up to bureaucratic micromanaging, potentially allowing states to condition their participation on whether they can apply their preferred regulations.
So, what do we do now? Proponents claim these compromises can easily be fixed in the rulemaking process or in future reconciliation bills. That may be true, but as the old saying goes, when you are at bat and the bases are loaded, don’t get caught looking.
The Treasury Department should establish three rules to ensure that doesn’t happen.
Prohibit states from adding their own regulations or creating their own new rules for the program. Several blue states have demonstrated that they want more control over private and home schooling. New York’s long-running desire to make private schools offer a “substantially equivalent” education led to a set of invasive regulations published in 2022 and a host of court and political battles since then. In Illinois, a bill to regulate homeschooling was beaten back by advocates this past legislative session.
If Treasury allows states to add their own regulations, the federal government could hand these governors and their functionaries a huge tool to exert influence over private schools. The carrot of millions of scholarship dollars could accomplish what the stick of regulations, court cases, and legislation could not.
