The new federal tax-credit scholarship is being hailed as a breakthrough for school choice: more options, more opportunity, more innovation. But history offers a warning. Even though these tax-credit funds never technically enter federal coffers, once Washington confers a benefit, its influence tends to follow. Over time, reporting requirements and red tape accumulate, reshaping how private schools operate and subtly nudging them to look and act more like the public institutions they were meant to stand apart from. Look no further than higher education, where decades of federal diktats—particularly around Title IX and gender identity—have tied colleges in bureaucratic knots, creating a system the Trump administration felt it had no choice but to try and blow up. Could a small Catholic or classical school face the same constraints in the coming decades, compromising the independence that makes these schools unique?
Charter schools offer a clear, closer-to-home example. I’ve visited hundreds of classrooms across the country and would be hard pressed to guess which were in charter schools and which were in district-operated schools without knowing beforehand. Curricula, professional development, pedagogy, and even classroom routines often converge, not because educators want to copy each other, but because incentives and ideology nudge them toward the same practices. This is why, for instance, charters and magnets are often confused and explainers are written to spell out distinctions that have become increasingly academic rather than real.
This phenomenon has a wonky name in organizational theory: institutional isomorphism. It describes how institutions—even those founded to be distinct—gradually start to resemble one another under common external pressures. Political pundit Jonah Goldberg recently illustrated the concept using familiar examples:
Fast food chains that once had a very specific niche now routinely expand their offerings to capture market share out of their lane. These days you can get espresso with your breakfast wrap from Dunkin’ and get doughnuts from Starbucks. The History Channel, A&E, and MTV once had very specific programming, now they all peddle reality shows and generic entertainment.
The system steers them toward the same offerings, regardless of their original brand identity. Whether that sameness stems from regulatory pressure, professional groupthink, or the public’s appetite for predictable experiences, the effect is the same: distinctiveness gives way to conformity.
The same could happen with Uncle Sam’s tax-credit scholarship. Gallons of digital ink have already been spilled on what the feds need to do vis-à-vis the forthcoming regulations from the Department of the Treasury, along with sanguine predictions about blue and red governors alike not being able to resist the allure of “free” federal money. But it’s worth remembering that the calculus is never fixed: Future administrations could alter the tax credit in ways with potentially profound effects.
Indeed, if Trump’s federal school choice regulations are good for the goose, AOC’s will be even better for the gander. The next time Democrats are at the switch, they could try and add requirements to scholarship granting organizations (SGOs) or, what’s more likely, they could allow states to add their own requirements. From non-discrimination rules and teacher certification mandates to detailed curricular standards and compliance audits, each additional layer of regulation exerts subtle pressure for schools to adopt the same administrative and instructional practices. Even measures reformers often prescribe, like standardized testing or financial transparency, could gradually guide schools toward uniformity, diluting the very distinctiveness that private choice was meant to protect.
These aren’t abstract concerns. Consider the downstream effects of technocratic strictures requiring all participating schools to accept special education students—and for issue-oriented watchdogs to follow with reports cataloguing their failings. Individualized Education Programs are often complex and bureaucratic, specifying services and accommodations that may not always align with student outcomes. Or imagine guidance—such as those derived from restorative justice—that could limit a school’s ability to enforce discipline according to its own standards. Over time, the stakes for receiving federal benefits could push school leaders to adjust their practices less out of pedagogical preference and more out of necessity, rewiring the incentives that define how these schools operate.
Even before the regulations are finalized, the effects could be far-reaching. Federal involvement, even when well-intentioned, has a way of standardizing institutions—making them more alike than different. Nor is it likely to go away. As Milton Friedman famously quipped, “Nothing is so permanent as a temporary government program.”
Proponents may be touting the new federal windfall as a fast lane for private school choice, especially in blue states, but early indications suggest Democratic governors are already hitting the brakes. In an era of negative polarization, there’s little to incentivize either party to move an inch toward the other. And knowing that Trump will eventually exit stage right, the real question is whether participating schools can navigate the inevitable swings of federal policy that come with our fractious politics—and how much of their distinctive character will be pulled, piece by piece, toward the same routines, rules, and structures that define the broader system.
