US Department of Ed Unveils “Education Freedom Scholarships” Proposal for School Choice

From the March 2019 CAPE Outlook

At an event at the US Department of Education (USDE) on February 28, Education Secretary Betsy DeVos, joined by US Senator Ted Cruz (TX) and US Representative Bradley Byrne (AL), announced legislation that would establish a federal tax credit to encourage donations to scholarship granting organizations (SGO).

The “Education Freedom Scholarships and Opportunity Act” would authorize up to $5 billion per year for the tax credits, but would not, according to the bill’s supporters, establish a federal program. Rather, the proposal would leave participation up to the states, and participating states would set the rules for how their programs would operate. The legislation would allow states to use scholarships for private education, but it would not require that approach.

According to Secretary DeVos, “Education Freedom Scholarships will give hundreds of thousands of students across the country the power to find the right fit for their education. Our bold proposal will offer a dollar-for-dollar federal income tax credit for contributions to 501(c)(3) non-profit organizations that provide scholarships to students. And the biggest winners will be America’s forgotten children who will finally have choices previously available only for the rich, the powerful, and the well-connected.”

In an impassioned plea, Senator Ted Cruz, who sponsored the Senate version of the legislation, declared, “I believe that school choice is the civil rights issue of the twentieth century. I believe that every child in America has a right to have access to excellent education.”

The bill’s House sponsor, Congressman Byrne, is a former member of the Alabama State Board of Education and former chancellor of the Alabama Department of Postsecondary Education. In a statement, he said, “Every student in America should have the opportunity to receive a high quality education, and we can help accomplish that goal through a new federal tax credit. This model has succeeded at creating opportunity for students in Alabama, and I am hopeful through this legislation we can create similar opportunities for students around the country.”

Information posted on the USDE website explains that under the bill, individual and business taxpayers nationwide would be able to contribute to state-identified SGOs, and such contributions would be eligible to receive a non-refundable federal tax credit. No contributor would be allowed a total tax benefit greater than the amount of their contribution.

According to USDE, the proposal “would most benefit our vulnerable students, who would finally have opportunities to pursue the best education for them in ways rich, powerful, and connected families always have. The scholarships are 100% privately funded by donations and do not take one cent from local public school students or public school teachers.” USDE set up a special page to highlight the proposal: ed.gov/freedom.

In his remarks, Senator Cruz observed that “This legislation that we are introducing today, it is big and it is bold.” He was adamant that “there are ironclad protections in this legislation that the federal government can’t stick its fingers into curriculum and change what schools are teaching, that’s a state and local question,” and that “this legislation doesn’t take one penny from any public school in America.”

The House bill, H.R. 1434, was introduced with thirty-nine cosponsors while the Senate bill, S. 634, was introduced with five, including the chairman of the Senate’s education committee, Lamar Alexander (TN). The bills were referred to their respective chambers’ tax committees, however, because it is tax credit legislation.

“A great education shouldn’t be determined by luck or by address or by family income,” said DeVos. “And education shouldn’t be an old-school, one-size-fits-all approach. Every student is unique and every one learns differently. The freedom to do that is why I took this job. And it’s why we’re here this morning. Because what’s missing in education today is at the core of what makes America truly great: freedom…freedom is never a threat.”