Federal tax credit scholarships


NICK EICHER, HOST: It’s Thursday the 28th of March, 2019. Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. First up: school choice.

When President Trump appointed longtime school-choice crusader Betsy DeVos to head the Education Department, her opponents warned she would dismantle the U.S. education system. That hasn’t happened. In fact, DeVos has done little to advance public school alternatives beyond encouraging states to adopt their own school choice programs.

EICHER: But that changed earlier this month when DeVos unveiled the Trump administration’s first major federal school choice plan. It would create a tax credit scholarship program to help low-income students with education expenses. It also would allow funding for higher education and workforce training programs.

State tax credit scholarships are generally popular with school choice advocates. But this federal proposal has divided conservatives.

WORLD Radio’s Leigh Jones is here to explain why.

LEIGH JONES, REPORTER: Eighteen states have tax credit programs that provide scholarships for low-income students to attend whatever schools they want. But Education Secretary Betsy DeVos says too many students aren’t lucky enough to live in those states.

DEVOS: A great education shouldn’t be determined by luck, or by address, or by family income.

For the last two years, DeVos has encouraged more states to adopt school choice offerings. But her advocacy has had little effect. Now she’s sweetening the appeal with a financial incentive.

The Education Freedom Scholarship program would offer dollar-for-dollar federal income and corporate tax credits for donations to scholarship funds. The organizations handing out the federal money would be authorized and regulated by state lawmakers. And states can choose to participate in the program or not.

DEVOS: I firmly believe every state should embrace education freedom. But those decisions are ones families and communities must make. This is not another mandate. We know gaining this freedom will require more work in some states than others. But as more states offer more options to families, demand will rise and pressure will mount on those who have not yet embraced the opportunity.

DeVos worked with two Republican lawmakers to create the program: Congressman Bradley Byrne of Alabama and Senator Ted Cruz of Texas. Byrne described it as the way Washington should get involved in education matters by giving states the resources they need to help students succeed.

BYRNE: The “haves” in America have a good education. The “have-nots” do not have a good education. And that’s not American, to have anyone who’s forced into being a “have-not.”

That would usually be a rallying cry all conservatives could get behind. But not this time.

The Heritage Foundation is actually leading opposition to the effort. Adam Michel is a Heritage tax policy analyst.

MICHEL: At the core of this issue, school choice is just not a federal issue. Education is not an enumerated power of the federal government. It’s not in the U.S. Constitution. There’s no constitutional warrant for the creation of any new federal education spending, including this new scholarship tax credit program.

Not only are the tax credits bad education policy, Michel says they’re bad tax policy, too.

MICHEL: Conservatives for a long time have been for removing subsidies from the tax code. Removing these tax credits is a step towards a fairer, less complicated tax code. And even the things that we like, like education choice, don’t deserve their own special tax credit for the same reasons we don’t like all of the other tax credits that are in the federal tax code.

And Michel fears federal funds will eventually lead to federal interference.

MICHEL: The proposal that’s out there right now actually has some very strong language in it. But what we know from history is even with this what looks like iron clad language, it doesn’t ultimately stop the federal government from overreaching.

Nat Malkus is with the American Enterprise Institute. He says the bill’s authors are also conservatives who are equally concerned about government overreach. He believes they’ve structured the bill to prevent that.

MALKUS: One of the things that they’ve done is they’ve made this a change to the tax code. It is not a program from the Department of Education. And they are leaving regulations for the programs to be the freedom and the responsibility of states that choose to participate.

Although 18 states currently have tax credit scholarship programs, Malkus says they’re not equally successful. Many of them could use the infusion of additional funds a federal tax credit would provide.

MALKUS: A lot of these programs are funded at such a low level. We’re talking $2,500 per student, $3,000 per student, that it’s really laughable to think that they can help low-income students find high-quality schools.

The Home School Legal Defense Association, better known a HSLDA, also supports the proposal. The association believes it includes the necessary safeguards against government interference. Maggie McKneely, the group’s federal relations liaison, hopes the program will encourage states to offer scholarships to homeschoolers. That’s an option only available now in New Hampshire.

MCKNEELY: We really favor parents being able to pick whichever educational model best serves their students, whether that’s public school or private school or charter schools or homeschooling.

Although AEI’s Nat Malkus likes the proposal, he’s realistic about its chances in a divided Congress.

MALKUS: Almost everyone will tell you that this is dead on arrival.

But if the bill’s authors can convince Democrats that scholarships could fund initiatives they support, like preschool access for low-income families, it might have a chance.

MALKUS: It’s not impossible that they could build a coalition now or in the next several years to get a bill like this across. In the narrow way it’s being marketed now, it’s very unlikely to make any progress.

Reporting for WORLD Radio, I’m Leigh Jones.


(AP Photo/Andrew Harnik) Education Secretary Betsy DeVos speaks during a House Appropriations subcommittee hearing on budget on Capitol Hill in Washington, Tuesday, March 26, 2019. 

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.

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