Parents as Curators of Their Children’s Education: Opportunities & Implications of a New Federal Education Tax Credit

During the webinar, Derrell Bradford with 50 CAN: The 50-State Campaign for Achievement Now moderated a conversation exploring the opportunities and implications of the new federal scholarship tax credit, and how people can get involved. This webinar was the fifth in a series exploring the emerging reality that more parents are actively curating the educational experiences of their children. 

Scott Palmer of EducationCounsel provided an overview of the new tax credit, which allows individuals to donate up to $1,700 per year and then receive a credit for contributions to scholarship-granting organizations (SGOs) that fund qualified elementary and secondary education expenses for eligible students. Palmer noted that as these contributions grow, this tax credit could become the largest federal investment in education, far more than Title I or other federal funds. He also described two potential pathways that states that opt in could take with it, with the “narrow” pathway involving investments in private and religious school choice, and the “broad” pathway involving investments in an ecosystem to expand access to more families for various resources, including tutoring programs, after school and summer learning, and other opportunities.  

Rachel Canter of the Progressive Policy Institute outlined her concerns with the tax credit, especially as it stands now without insight into the forthcoming regulations and guidance that will shape it. Canter stated that she believes the tax credit is unlikely to create major educational opportunities for low-income students and for public school students more broadly. Instead, she believes that the way the program is designed makes it more accessible for private and religious schools to leverage. Canter described the challenges in forming a scholarship-granting organization that can receive and distribute scholarships to eligible students, and the considerations nonprofits will need to weigh related to mission and budget as they determine whether to become SGOs.

Ben DeGrow of ExcelinEd stressed that these scholarship funds will be additive for education and not take away from any federal education funds that public schools already receive. DeGrow noted that this program already has precedent among the 20 states that have tax credit scholarship programs with this tax credit offering an opportunity for states and communities to shape it to align with their priorities:  “I do think ultimately the benefit of these types of programs is that they tap into local knowledge, local awareness of communities, individual donors, philanthropy, parents. Rather than trying to impose down a one-size-fits-all solution.” DeGrow noted that advocacy groups and state leaders could, for example, direct SGOs in their state to target support for higher-need students by expanding access to private school choice and other opportunities these students and their families cannot currently access.

Augustus Mays of The Education Trust highlighted concerns about the new tax credit related to funding, access, effectiveness, and accountability. Mays cautioned that this program could accelerate public school enrollment declines along with potential funding cuts, school closures, larger class sizes, and fewer services to students who most need them. He also expressed concern that, based on precedent of current state voucher programs, most families that receive these scholarships will be affluent families or families who already attend private schools, not lower-income families who most need them. Mays noted the lack of effectiveness of voucher-type programs in states including Florida and Indiana. He said they show little to no improvement in academic outcomes on average and urged investment in evidence-based strategies. Mays also highlighted the need for strong accountability and civil rights data, including “equity guardrails” such as protections and services for students with disabilities among other student populations. He suggested that states that opt in provide guidance and frameworks on how public district schools can access these resources along with the types of services and programs they should offer to help the highest-need students.

Karen Pittman of Knowledge to Power Catalysts said she is “cautiously optimistic” about the new tax credit as “a chance for us to actually reinvigorate the idea of public education by giving parents the flexibility that they want.” Pittman suggested that this tax credit could be a way to put back into parents’ pockets the $230 billion per year they are already spending on supplemental learning activities for their children, and it could be a way to make more equitable the significant difference between what affluent parents and low-income parents spend on supplemental activities like after-school programs. 

Pittman described schools’ current role as “multiservice agencies” in providing core academics, enrichment, remediation, and more, and said the tax credit could support schools to do many of these functions more effectively and equitably. She also underscored the need for advocates to ensure that core federal education funding like Title I funds for low-income students do not decrease in the wake of this new tax credit and to use these funds to meet the full range of a community’s needs: “I think we need to do it in a sense of saying if we’re going to rebuild and use these flexible dollars, let’s think about year-round community-wide services for young people and let’s think about the population….We can do this in an equitable way and I think we should.”

Panelists also discussed their priorities for the federal regulations, the hurdles around awareness, access, and infrastructure that need to be addressed, and their plans and advice for how to get involved in influencing the design and implementation of the tax credit in the coming months. 

They noted that the U.S Department of the Treasury and the Internal Revenue Service issued a call for public comments on the implementation of this new tax credit with a deadline of Friday, December 26.

If you were able to attend the session, we would love to hear your feedback! We appreciate your help in filling out the following form as we seek to learn and understand the perspectives, ideas, critiques and recommendations that better inform our key audiences.