Starting on January 1, 2027, the federal government will sponsor its own voucher program. In this post, Peter Greene explains how the new program will work. You can be sure that every dollar spent on charter schools and vouchers will be taken away from public schools.

Peter Greene writes:

Since Congress passed President Donald Trump’s One Big Beautiful Bill with its federal school voucher, questions have abounded about the exact form that the tax credit program would take. Today the Treasury Department released proposed rules for the voucher program, and some of those questions are being answered

One of the persistent questions has been how much flexibility will states have in how the program is administered. The answer that came today is “Not very much.”

The basic structure of the tax credit voucher program works like this: a taxpayer redirects $1,700 to a scholarship granting organization (SGO) and receives a dollar-for-dollar tax credit. The SGO uses that money (minus an up-to-10% administrative fee) to grant scholarships to students, who may then use the money for educational expenses. 

While the state must require SGOs to meet the state’s requirements for charitable organizations, the state may not put restrictions on how the SGO operates “such as by limiting the type of school that scholarship recipients may attend or the types of qualified elementary or secondary education expenses for which scholarship funds may be used.” 

This restriction on restrictions dovetails with the voucher movement’s push to render legal the use of redirected taxpayer dollars to fund religious schools without setting limits on how those schools can discriminate.

The rules appear to solidify the idea that an SGO cannot be removed by the state for reasons other than failure to comply with the law’s SGO requirements. These requirements simply require an SGHO to serve at least ten eligible students and spend the appropriate amount of money on the vouchers. Nothing in the law requires SGOs to monitor or assess the educational quality of the vendors who receive the money.

The rules issued do indicate that an SGO can choose to limit its scholarships “to specific subject matter” or to students whose household income is less than 80% of the area median gross income, but it appears that those limits would be placed at the SGO’s discretion and not the state’s.

The federal voucher program caps eligibility at 300% of area median gross income, a generous cap that would make the vast majority of American families eligible for the voucher. 

The rules published today show that if a state wanted to, for instance, add restrictions that directed vouchers only to low-income students or students in particular communities, they could not do so. Nor could they impose any restrictions that would keep the voucher dollars from going to religious schools. 

In short, any governors who expected to use these redirected taxpayer dollars in ways that aligned with their own policy goals may need to reconsider. If they opt in, their hands are tied.

There are other details to be dug out and discussed, but one rule guarantees that these discussions may go on forever. While some “stakeholders” recommended restricting state’s ability to opt out after opting in, the rules indicate that a governor will opt in for just one year at a time.