American education policy is littered with hypotheticals. If we allocated even more money, we could improve outcomes. If we found the latest ed-tech gadget, we could unlock individualized learning within a one-size-fits-all system. It reminds me of the saying, “If ‘ifs’ and ‘buts’ were candies and nuts, we’d all have a Merry Christmas.” Jon Valant, writing for the Brookings Institution, must think it’s Christmas in June. He imagines that giving parents choices will lead to hypothetical rich villains committing hypothetical fraud and abuse.
America’s students have been through a lot of very real challenges, particularly over the last several years. As Congress considers a once-in-a-lifetime chance to pass school choice in every state, it is essential to weigh evidence from the real world—not hypothetical scenarios—that overwhelmingly supports the value of school choice tax credits.
The School Choice Tax Credit Opportunity
This year we have what might be a once-in-a-generation opportunity to capitalize on what has been a real movement at the state level. Congress can supercharge educational choice in every state in our nation through a school choice tax credit. The reconciliation package approved by the House contains a version of the Educational Choice for Children Act (ECCA) and, as the Senate now formulates its tax and spending plan, signs point to the inclusion of a school-choice tax credit in its version.
The beauty of the plan is how it will unlock school choice for families who might not otherwise have a chance at educational freedom. Even families in blue states such as California and New York, with legislatures that won’t pass any form of school choice, will be one step closer to accessing the schools in which their children will thrive. This will be a game changer for those families and a powerful complement for families in states that have embraced school choice.
Though some details are not yet settled, we know generally how this program will operate when passed. Taxpayers across the country will be able to contribute a percentage of their income to a Scholarship Granting Organization (SGO). Those contributions will count against their federal income tax liability. Next, the SGO gives scholarships to students. And those scholarships can be used to pay for a range of educational needs including tuition, tutoring, on-line courses, etc.
Valant’s Parade of Horrible Hypotheticals
Really great, yes? Well, not according to the Brooking Institution’s Jon Valant, who’s done some good work over the years, but this time is dead wrong. His critique of the pending tax credit consists almost entirely of horrible hypotheticals rather than anything resembling analysis or reasoned disputation. He outlines some supposedly sketchy tax dodges and discriminatory policies of the nonprofit SGOs that would fundraise and administer the school choice scholarships at the state level. These are familiar arguments against school choice but they’ve been rebutted and rebutted and rebutted—time and time again.
But, in good faith, it’s worth a further discussion for those who might wonder if the hypotheticals could come to pass. It is true that SGOs can, and likely will, be mission-driven organizations seeking to support students in specific ways. For instance, an SGO could form with the express goal of providing K–12 scholarships to students in Detroit, MI, the second-lowest performing urban district in the country according to the National Assessment of Educational Progress, so that city’s children can get supplemental tutoring and access better technology. The group might decide that $3,000 scholarships satisfy this need. Michigan does not offer a state-level tuition tax credit scholarship and the federal bill would be a boon for Wolverine families. Perhaps Valant worries that such a mission is too narrow, yet opposing the tax credit program effectively stifles a real need at the local level. Moreover, every SGO bears the burden of convincing donors that its mission is worthy of financial support. Poorly run organizations or disreputable actors are not likely to be supported by discerning donors.
Another Valant worry is around testing. Setting aside the logistical and political impracticality of requiring and administering a nation-wide test, there will be so many programmatic differences in the emphases and uses of the scholarship funds that it’s naïve to think that any single test would even be relevant, much less any comparisons based on it. Mandating a test also assumes that parents aren’t already well-positioned to determine whether the needs of their children are being met. In the time it would take to satisfy those who seek some sort of universal testing, we will lose another generation of students to schools that, by multiple measures, are not serving them well.
Proven Models in the States
Far from opening the floodgates to fraud, as Valant frets, school choice tax credit programs have demonstrated success across the country: a record of fiscal success and—most importantly—a record of lives changed. In Florida, for instance, more than a million students have benefited from the Florida Tax Credit Scholarship Program since its inception in 2001, with studies showing improved college enrollment rates, particularly among low-income and minority students.
Valant seems eager to dismiss this wealth of relevant data, suggesting that there is little comparison between “small” tax credit programs in the states and a federal program that he says could become “one of America’s costliest, most significant federal education programs.”
Yet there’s very little difference between the federal program being considered and existing scholarship programs in 19 states.
State-level tax credit programs are not only producing positive academic outcomes, they’re doing so with strong public accountability—which a federal school choice tax credit would also have. Participating nonprofits are subject to annual audits and must adhere to transparent reporting rules. They must also distribute 90 percent of their funds for scholarships, else they cannot participate, and safeguards are tied to existing federal law providing eligible uses for 529 plans, ensuring that scholarships can only be used for legitimate education-related expenses.
Critics like Valant are quick to point to isolated examples of waste being caught and addressed but are more hesitant to discuss the massive scope of fraud and waste documented and often unaddressed in the public education system—or the fact that public schools caught up in this type of waste often just keep getting more taxpayer dollars.
The U.S. Department of Education’s Office of Inspector General has uncovered hundreds of millions of dollars in misallocated or misspent federal education funds over the last decade. According to a 2022 Government Accountability Office (GAO) report, lapses in oversight have led to persistent misuse of federal Title I dollars. No educational sector is immune to bad actors, but the evidence shows that school choice tax credit programs are no more vulnerable—and often, in fact, are better policed—than their traditional public counterparts.
A school choice tax credit of $10 billion would represent a fraction of total federal education spending, which exceeds $80 billion annually. To put that in context: the federal government spent over $30 billion in 2023 on Title I alone. Title I has mixed results, to put it gently. By contrast, a modest investment in school choice has the potential to change lives, improve the public education system through injecting competition, and unlock a tested model for improving long-term achievement.
From Hypotheticals to Hope
When the goal is improving educational outcomes, the question we should ask is not “what might go wrong?” but “what is working, and how can we extend it?” A school choice tax credit would offer a chance to build on the lessons of successful state programs and expand opportunity to students nationwide. It deserves a fair hearing, grounded in facts—not fear.
Shaka Mitchell is a senior fellow at the American Federation for Children.
