The Century Foundation published an analysis of Trump’s federal voucher program, which explains why it is a hoax and a fraud. The authors are Kayla Patrick and Loredana Valtierra.

The promise it makes is that families and students will choose schools that are just right for them, but the reality is that schools choose the students they want.

The promise is that school choice will benefit black and brown children, as well as children with disabilities, but children abandon all civil rights protections when they enroll in private schools.

The promise is that schools of choice will produce better academic outcomes but typically they produce worse outcomes (see Josh Cowen, The Privateers).

The promise is that school choice represents accountability but it usually means no accountability at all, because nonpublic schools don’t take national or state tests.

Kayla Patrick and Loredana Valtierra write:

Modern school voucher programs are often framed as a response to declining academic achievement and a way to expand “parent choice” by enabling private educators to operate within the public system. But in practice, vouchers operate quite differently than advertised. It’s the private schools, not families, who ultimately decide who enrolls, and they do so outside the accountability systems that govern public education and public dollars and ensure every student has equal opportunity to learn.

The Federal Tax Credit Scholarship Program (FTCS), passed as part of the Republican Party’s “One Big Beautiful Bill” (OBBBA), scales this model for camouflaged privatization to the national level. Though branded as a tax incentive, it functions as a nationwide voucher system that diverts public dollars to private schools while allowing those schools to play by different rules than public providers—evading civil rights protections, academic oversight, and any requirement to provide meaningful evidence to the public of their students’ outcomes.

A National Voucher Program Disguised as a Tax Credit

The FTCS nationalizes a model that at least twenty states and counting –including Arizona, Georgia, Louisiana, and Pennsylvania – have already adopted, one which functions by siphoning public dollars through scholarship granting organizations (SGOs). Under this law, individual taxpayers can donate up to $1,700 annually to SGOs in exchange for a 100 percent federal tax credit, effectively turning private donations into reimbursed public expenditures.

SGOs then will distribute “scholarships” to K–12 students to use toward private school tuition, books, curriculum materials, tutoring or other educational classes, and educational therapies provided by licensed providers. While the program is optional for states, at least twenty-seven have already signaled their intent to participate.

[To see which states have expressed their intent to participate, open the link.]

Despite its branding, this design drains public revenue that would otherwise support public schools—which still educate roughly 90 percent of American students—and redirects it to private, religious, and largely unregulated providers. 

The program model also ignores what parents time and again have told us they want for their children. When given a direct choice at the ballot box, voters have repeatedly rejected school vouchers and related private-school subsidy measures. In the 2024 election, proposals to authorize or expand voucher-style programs in Colorado, Kentucky, and Nebraska were defeated, and historical ballot measure data show that voters have rejected every statewide private voucher or education tax credit initiative placed before them since 1970. This opposition is reflected in polling that shows nearly 70 percent of voters say they would rather increase federal funding for public schools than expand government-funded vouchers, including majorities across party lines.

[Open the link to see which states have held referenda on vouchers.]

Broad Eligibility, Few Quality Controls, and Limited Public Benefit

Even measured against its stated goal of affordability, the FTCS program misses the mark. But if the goal is to make education more affordable for families under real financial strain, this program is also ineffective. Private K–12 tuition averages nearly $13,000 per year nationwide, placing private schooling out of reach for many families even with a modest subsidy. Yet the tax credit is not targeted to families facing affordability pressures. It allows households earning up to 300 percent of area median income to qualify, a threshold that would make roughly 90 percent of U.S. households eligible. In high-income regions, families earning as much as $500,000 per year could receive publicly subsidized support for private education, while in a city like New York—where median income is about $81,000—families earning nearly $244,000 would qualify. At a time when families are struggling to afford groceries, housing, and child care, this program directs public dollars toward a limited use—private education subsidies for households that largely do not need the financial help—rather than toward measures that would help most families, like lowering child care or housing costs.

At a time when families are struggling to afford groceries, housing, and child care, this program directs public dollars toward a limited use—private education subsidies for households that largely do not need the financial help—rather than toward measures that would help most families, like lowering child care or housing costs.

At the same time, the program imposes no meaningful accountability requirements on participating schools. There are no academic performance standards, no transparency obligations, and no requirement to evaluate outcomes. In contrast to nearly every other federal program serving children, from Title I to Head Start, this is public spending without public oversight. Federal programs historically are monitored for fiscal, quality, and sometimes for safety compliance by the agency with charge over the program. In this case, U.S Department of Education (ED) expertise plays no role in oversight of new national policy for education.¹

What State Leaders Can and Cannot Control

FTCS offers a tempting hook for well-intentioned state policymakers as well: Some governors and state legislatures may view the tax credit as a way to unlock new resources for priorities like tutoring or after-school programs. In practice, however, it offers no new, flexible funding for states and gives them little control over how public dollars are used. The law defines “scholarship-granting organizations” so broadly that states cannot meaningfully restrict eligibility, set standards, or influence whether funds flow primarily to high-cost private schools rather than unmet public needs.

Once a state opts in, its role is largely administrative and unfunded. States receive no resources to carry out oversight, cannot impose safeguards, and must submit eligible organizations to the U.S. Treasury without authority to shape program design or accountability. Far from being additional education funding that states need, opting in requires that states absorb the fiscal, administrative, and equity consequences of a federal program they are unable to direct or correct. It is not “free money” for states. The opt-in decision is therefore the only meaningful leverage states have—and governors should use their right to refuse to play along in order to protect their public education systems.

Why Oversight and Accountability Matters

Public funding should never function on a good-faith system. It’s very simple: in good policymaking, whenever taxpayer dollars are allocated, oversight measures are put in place to make sure those dollars are spent in the way intended. We already know from numerous examples in the school choice policy space itself that no accountability means that those who need the help the least receive the most benefit.

Eighteen states have a universal private school choice program. Unfortunately, states that have expanded vouchers or education savings accounts with minimal oversight have already seen waste, fraud, and abuse. Arizona’s universal Empowerment Scholarship Account (ESA) program, for instance, has minimal controls, audit practices that automatically approve reimbursements, and has been linked to purchases of non-educational items like diamond rings, televisions, and even lingerie with taxpayer funds, prompting investigations by the state attorney general. Rather than lowering costs for families, the program has generated ballooning expenses for the state and contributed to a growing budget crisis—with no measurable benefit to students at all.

Similarly, the federal Charter Schools Program has repeatedly been shown to lack meaningful accountability, with investigations and audits documenting hundreds of millions of dollars wasted on schools that never opened or closed prematurely, and charter networks facing conservatorship over financial mismanagement and self-dealing. These outcomes are the predictable result of public dollars flowing to private operators without meaningful oversight.

Decades of research on voucher programs show mixed or negative academic outcomes, particularly in math and reading, and no evidence that vouchers close opportunity gaps. In Louisiana, Indiana, and Ohio, studies found declines in student achievement following expansions in voucher programs. Students in Louisiana’s voucher program experienced drops in both math and reading in their first two years, while voucher students in Indiana and Ohio performed worse than comparable peers who remained in public schools. 

The program nationalizes an unproven experiment while insulating it from the very safeguards that exist to protect students and taxpayers alike.

Taken together, these examples underscore why oversight and accountability are not optional when public dollars are at stake. The FTCS program includes no meaningful accountability, evaluation, or research requirements to justify an estimated $26 billion cost to taxpayers. Without data on student learning, fiscal integrity, or long-term outcomes, the public has no way to assess whether this investment is helping students or simply reshuffling them across systems while diverting resources away from the public schools that serve most children and toward unknown corporate interests.² In effect, the program nationalizes an unproven experiment while insulating it from the very safeguards that exist to protect students and taxpayers alike.

Who Profits When Public Dollars Become Private Subsidies?

Another consequence of turning public education dollars into private subsidies is that it creates a lucrative marketplace for the companies that manage these voucher systems. A handful of firms have seized on state voucher expansions to secure multimillion-dollar contracts, turning what was pitched as a cost-saving policy into a business opportunity for tech and finance intermediaries. These companies often have limited experience running education programs, and in some states have faced scrutiny over operational problems, questionable spending controls, and high administrative costs. 

This track record raises questions about whether families truly benefit from FTCS’s model. It would seem the opposite: it diverts taxpayer dollars into private profit streams instead of lowering education costs for struggling families. Instead of more wasteful government contracts, these dollars should be used to improve neighborhood schools by hiring high-quality educators, increasing after school programs, expanding pre-K, and hiring mental health professionals.

A Tax Policy Not Designed to Support Education

Congress gave sole interpretive authority for this program to the U.S. Treasury Department, deliberately excluding the U.S. Department of Education and its education-specific expertise. As a result, a major national education policy will be implemented through the tax code, with limited attention to accountability, equity, or educational impact. While advocates have urged the Treasury Department to include stronger transparency, safeguards, and state authority, it is unlikely those measures will be adopted to address the program’s core design flaws.

This use of the tax code stands in sharp contrast to prior policies that successfully supported children and families. The 2021 expanded Federal Child Tax Credit helped to lift more than 2 million childrenout of poverty and reduced the country’s child poverty level to a historic low of 5.2 percent. This program will likely do the opposite. Research shows that private school voucher programs disproportionately benefit wealthy families. Consistent with many other provisions in the law, Congressional Republicans have chosen to prioritize a tax break that disproportionately benefits the wealthy, over nearly every other form of charitable giving, such as donations to food pantries, hospitals, or community services.

By incentivizing families to exit public schools, the voucher tax credit also undermines the financial stability of those schools, particularly in rural and high-need communities. Because education funding is largely enrollment-based, even modest shifts can lead to school closures, consolidations, and reduced services. This leaves behind those families who don’t have the time or resources to navigate private systems, and asks taxpayers to reimburse private donations on top of existing public education costs.

Civil Rights Protections Are Excluded

Public schools that receive federal funding are required to comply with federal civil rights laws, including Title VI and Title IX of the Civil Rights Act, the Individuals with Disabilities Education Act (IDEA), and Section 504 of the Rehabilitation Act. In 2024, ED received 22,687 civil rights complaints, including about 8,400 related to disability discrimination, reflecting just how often students and families rely on these protections. 

These laws require schools to take corrective action to prevent and respond to discrimination, provide accommodations and services to students, investigate complaints, and offer families meaningful avenues for recourse. This is what public accountability looks like in practice, and its success depends on ED’s legal authority and the staff capacity to respond when families ask for help.

By contrast, the OBBA does not require scholarship-granting organizations or the private schools and programs they fund to comply with these federal civil rights protections, even though they benefit from publicly subsidized dollars. This means that if a student experiences harassment or discrimination based on race, national origin, sex, religion, or disability, families may have little or no ability to hold private schools accountable or seek remedies comparable to those guaranteed in public schools.

Evidence from state voucher programs shows why this gap matters. An investigation in North Carolina found that voucher funds flowed to private schools that were significantly whiter than the communities they serve, reinforcing racial segregation rather than expanding opportunity. In the absence of enforceable civil rights guardrails, public funding supports exclusionary practices that would be unlawful in public schools.

The Cost to Public Schools and Communities

Ultimately, this voucher/tax credit perpetuates a broader pattern of states, in addition to the federal government, stepping back from their responsibility to fully fund and strengthen public schools. Rather than address the systemic problems that perpetuate low-performing schools, it treats educational inequity as a series of individual problems to be solved by sending public dollars to private education. No matter how the administration spins it, these programs fail to prioritize students from lower-income families while simultaneously subsidizing private education for higher-income families. It invites taxpayers to feel as though they are helping children access opportunity, while leaving the underlying inequities in public education unresolved and, in many cases, deepened.

[Open the link to see data on source of insurance.]

This tax credit is projected to cost $26 billion, which is a high price tag that instead could be doing real good in public schools. If Congress instead invested this through Title I, that money would amount to roughly $1,238 per student in schools serving low-income communities. Research shows that investments of this size improve reading and math outcomes. In other words, we know how to use public dollars to help students succeed. This policy chooses not to.

Imagine putting that $26 billion, the lowest estimated cost of the tax credit over ten years, toward Title I, the federal program that benefits most public schools. That would more than double Title I’s current funding at $18.4 billion. Title I’s flexibility allows schools to meet their specific needs to improve student achievement: more teachers, aides, professional development, wraparound services, and more. 

IDEA is supposed to fund 40 percent of each student’s special education each year, but the federal government has never met that promise. Current funding at $14.2 billion amounts to less than 12 percent of the promise. However, adding $26 billion to IDEA would almost triple current funding and completely close the gap. 

We know that the unprecedented funding from the American Rescue Plan and other COVID relief packages will make a major return on investment: every $1,000 invested per student will be worth $1,238 in future earnings. That funding also required states to at least maintain their education budgets at prior funding so that the federal investment would not replace their responsibility and effort, but work together. The FTCS model completely disregards these precedents, and their values.

The Federal Tax Credit Scholarship Is a Heist Taken Straight from the Right’s Privatization Playbook

The Federal Tax Credit Scholarship program follows a familiar privatization strategy. It routes public dollars to private actors while stripping away the oversight, transparency, and civil rights protections that normally accompany public investment. Framed as generosity and choice, it instead creates a system in which taxpayers assume the cost while private schools and intermediaries operate largely beyond public accountability.

The program recreates many risks at a national scale. The schools and organizations receiving these publicly subsidized funds are not required to demonstrate academic results, comply with federal civil rights law, or provide transparency about how dollars are spent. Families are left without protections, taxpayers without accountability, and policymakers without evidence that the investment is improving student outcomes.

When public dollars are transformed into lightly regulated private subsidies, they invite exploitation. The Federal Tax Credit Scholarship is not an isolated policy choice: it follows a pattern of policies that weaken, and normalize weakening, public education while insulating private actors from responsibility. History shows where this path leads: higher costs, weaker safeguards, and fewer assurances that public investments serve the public good.

Notes

1. The Trump administration has taken multiple actions to reduce the role of the U.S. Department of Education, including firing staff and reassigning education programs and staff to other agencies through interagency agreements (IAAs) without congressional authorization. Such actions raise legal and governance concerns and further erode the education-specific expertise, oversight, and accountability that Congress has historically vested in ED.
2. Under the OBBA, the federal tax credit for contributions to SGOs applies to individual taxpayers. The law does not provide separate federal tax credit rules for corporate contributions; whether and how corporations might participate or benefit may depend on future Treasury and IRS regulations and state tax policies. Many states currently allow corporate contributions to SGOs.

Kayla Patrick, Contributor

Loredana Valtierra, Contributor