Even as President Donald Trump’s so-called “One Big Beautiful Bill” reduced funds for public schools, it also introduced a tax credit scholarship program that could potentially bring billions into the nation's K-12 schools, albeit primarily through private schools.
The program would allow individual Americans to donate up to $1,700 to nonprofits and get a dollar-to-dollar tax break on their federal income taxes. The nonprofit would then dole out the money it raised in the form of scholarships to students attending private or religious schools. The funds also could go toward a program run by a public school.
This sea change in school choice history could hit soon, as states decide to opt in or out of a program historically championed by red states.
Calling education "our paramount duty,” Gov. Bob Ferguson said in a statement that “I'm deeply skeptical of voucher programs that could harm our public school system. I've directed my team to analyze whether we can use these funds in a way that benefits public school students.
Superintendent of Public Instruction Chris Reykdal believes the program violates Washington state law that prohibits public tax dollars from funding religious private schools. In a statement released Monday, he called on the state Legislature to weigh in during the upcoming legislative session and not default to letting the governor decide.
“The power of public education is that we serve any and every student who walks through the door. Students benefit from diverse schools, and all of that is at risk with privatization that tends to drive more segregation by religion, income, race, and disability,” Reykdal said in a statement to The Seattle Times. “I am unequivocally opposed to using public funds to illegally fund privately operated schools that are not accountable to voters and are not required to accept, educate, and uplift all students.”
State law doesn’t apply because it is a federal program and it isn’t funded by state money, according to Preston Green, an urban education and educational leadership and law professor at the University of Connecticut. Even if state funds were used, three recent Supreme Court cases dating to 2017 ruled that if a state has a private voucher program, it can't exclude religious schools from that program.
Bruce Baker, a national education finance expert at the University of Miami, believes that even though the Supreme Court cases have specifically addressed state-funded programs, they would still be broadly applicable to any government-financed system.
Sen. Lisa Wellman, D-Mercer Island, who chairs the Early Learning and K-12 Education Committee, is among education leaders in the state House and the Senate who oppose the program.
“The public school system is the bedrock of democracy, providing education for each and every child regardless of their needs,” Wellman said. “I think I speak for my party that we would not be in favor of moving this forward. Nor do I believe that the governor would urge us to do that.”
Even the state’s private schools are unsure how this will advance.
“A state like Washington that has been very, very union-based and loud against any kind of school choice ever, ever, I think is going to have a harder time deciding if they are going to opt in,” said Suzie Hanson, the executive director of the Washington Federation of Independent Schools.
How would the program work?
Individual Americans could choose to donate up to $1,700 to nonprofits, called scholarship granting organizations, and get a complete dollar-to-dollar tax break on their federal income taxes. In turn, their tax money will go to a nonprofit instead of going to the federal government.
Then those SGOs will collect the money and, depending on how much money they raise, will decide how many students and what types of kids they’ll support with scholarships, said Marguerite Roza, director of the Edunomics Lab at Georgetown University.
There’s no guarantee of size of the scholarship doled out to each student and whether it would even be enough to cover private school tuition. The average annual cost of private school in the United States is $13,000. Religious schools tend to cost less than private schools, so the scholarship could make a bigger splash for students attending religious schools.
Some states already have similar programs. In those states, research shows that often the scholarship is around $3,000, much lower than a typical private school’s annual tuition. This means low-income families wouldn’t actually have a choice because they wouldn’t be able to afford a private school even with the scholarship, said David Knight, an associate professor of education finance and policy at the University of Washington College of Education.
Starting Jan. 1, 2027, families can pick a school that will accept the scholarship and then apply to that school. The nonprofit would give the scholarship money directly to that school for that particular student.
A family must make no more than 300% of their area median income to receive the scholarship money. Depending on where a family lives in the country, that could include families that make between $300,000 and $500,000 a year.
Seattle’s area median income is $120,600, meaning families making up to $360,000 a year would be eligible.
“It is almost a universal program,” Knight said. “Universal school voucher programs and policies have been widely criticized for just representing taxpayer-funded handouts to wealthier households that are already sending their kids to private schools.”
The scholarships “are just going to end up being free money to parents who already send their kids to private schools,” Knight added.
SGOs must donate 90% of the donation to the scholarship. They keep 10% of the donations for administrative costs.
It is unclear who will create these SGOs or whether existing nonprofits can create a separate arm of their group that is financially independent to operate an SGO.
An SGO could be dedicated to scholarships for one type of student, such as low-income students, but it can’t be dedicated to support only one school, said Georgetown's Roza.
The Alliance for Education, a nonprofit that supports Seattle Public School initiatives, didn’t answer a question about whether it would create an SGO, but provided a statement exalting public school education.
“Public schools are a founding cornerstone of strong, thriving communities. They serve the vast majority of students — regardless of income, language, background, or ability — and remain one of the most inclusive and accessible public institutions we have to drive economic prosperity and community well-being,” the statement read. “Our focus and vision remains strong that when public education is resourced and supported, our students thrive.”
Teacher unions are also opposed.
“This program is not about supporting students, this is about privatizing education and making the rich richer,” said Jeb Binns, the president of the Highline Education Association. “I believe that this scheme will hurt low-income students and students with disabilities the most. Private and charter schools almost never provide the kind of comprehensive support that students need, be that a nutritious breakfast, translation services, or learning for students with autism.”
Could public schools benefit?
Money could go to programs run by public schools, depending on how regulations are written and whether a state creates restrictions on the program.
For example, Roza said, if an SGO is dedicated to providing additional science education to students and a public school is offering a science camp, then the public school could receive these scholarship funds.
“There are a lot of questions here that are still going to have to be worked out,” said Roza. “If that actually opens up, we could really see a much more multidimensional education experience for kids.”
Public school families might also benefit if the money is used for things like tutoring or extracurricular programs.
“I’m not sure that state officials would come out against this right off the bat,” Knight added. “I wonder if they might look at it and think about how the state could potentially benefit from it and help citizens of Washington pay less in their federal income taxes.”
Is it free money?
Roza at the Edunomics Lab said the scholarship money is “new money” because it is a new source of revenue, from people’s income taxes. Knight argues that this isn’t just free or new money — it is still federal dollars taken away from some other federal program and instead going mostly to private schools.
“Of course it is taking money from something,” Knight said. “The federal government and every state government has a general fund and it is like a checking account and they can spend the money however they want. They spend it on the priorities that matter most to the citizens and that reflects our values in a democracy. So every public dollar that gets spent is a dollar that could’ve been spent elsewhere.”
If the tax scholarship program took effect and actually shifted public school students away from the public system and into private schools, it would create a short-term financial stress on school districts because the money they receive from the state is linked to enrollment.
However, in the long run, it could mean that there are fewer students in Washington for education, so less of a burden on the state to fund education, Knight said.
The total amount of money this program could introduce into the nation’s schools is unclear. Roza estimates it at around $28 billion.
“We are really all just guessing,” said Roza. “It could, depending on how it plays out, explode to a really large amount.”
Will private schools even participate?
Even if Washington does opt in, Hanson, of the Federation of Independent Schools, isn’t sure how it would be received by Washington’s private schools.
“I think if it provides access to students who don’t have access to private schools there's some interest in that, but not for all schools,” Hanson said. “And that’s not because all schools don’t want students to have access, but not all schools want to get entangled with the government around money.”
Hanson said if more students can pay for private education with this money, it might mean new private schools need to be created, because there wouldn’t be enough spots in the current private schools.
“Schools take a very long time to develop and stabilize so new schools cropping up for something that may only last three years is interesting,” Hanson said. “It may not serve a family well.”
“People are a little bit over the map about if this is a good thing,” Hanson said.
Green, the University of Connecticut law professor, thinks blue states will consider opting in.
“The argument is ‘Hey, it’s not state money, it's federal money,' ” Green said. “I think that’s basically the pressure, it’s hard to pass that money up.”
Hanson and Roza both noted that if Washington doesn’t participate, Washingtonians could potentially choose to send their money to a different state.
“That would be a missed opportunity for Washington to benefit from education funding that could help both private and public school students,” Hanson said.
Bruce Baker, the national education expert at the University of Miami, wonders if staying committed to public dollars funding public education could create a new opportunity.
“There could be a long-run economic opportunity for Washington and others to be the education states, to find ways to do it on their own, to develop statewide endowment funds to offset the losses of federal money and invest above and beyond that,” Baker said.
Baker still has an ethical concern. “When we start allocating the taxpayer dollar out to these religious schools and when we acknowledge we are also going to lose the opportunity to regulate them, then we lose this ability to promote a common good, to keep schools from using taxpayer dollars in discriminatory ways, including racial discrimination,” Baker said.
Baker predicted that the choice to opt in by states will reflect a political split.
“Sadly, we are in this kind of education civil war era,” Baker said.
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