How much money will flow to public school students from the new federal tax-credit scholarship program? And who is most likely to benefit?
These are important considerations as states mull whether to opt into the program by Jan. 1. But they’re also difficult questions to answer.
Traditionally, tax-credit scholarships and related state-run programs like vouchers give money to private school students. But the new federal program allows public school students to receive scholarships and even spend their money at their public schools. (How that will work is a separate question and debate. More on that here.)
Josh Cowen, a professor of education policy at Michigan State University, has been closely following the federal tax-credit scholarship program’s development, and he recently released a working brief on his Substack channel on how much money public school students stand to gain.
Based on giving patterns for Ohio’s tax-credit scholarship for private school tuition and an Arizona tax credit for public school donations, Cowen estimates that the program could generate $112 per public school student across all 50 states and the District of Columbia in 2030. The Ohio program is the closest model to the federal program based on its structure, with expansive student eligibility, while the Arizona program offers a comparison because it’s administered through the tax code and is targeted to public schools and students.
Cowen is known as a staunch critic of state-level private school choice programs, but he says the federal program could hold opportunity for public schools and public school students.
Education Week spoke with him about his estimates. This interview has been edited for length and clarity.
What are you most confident about in your calculations, and what unknowns might jumble your math?
I’m pretty confident that the money is there. But the question is, will the money show up in the scholarship-granting organizations in a way that the public schools are there to provide services?
Will people give? We’ve seen evidence that they do, at least in the private school world, but even in this tiny Arizona public school tax credit that I used as a benchmark.
The bigger question here is, are the schools themselves and the public school community in particular really going to set themselves up to receive this money?
States that have this kind of culture of giving set up, and got [into the federal program] relatively early—there, there is a lot of attention on how the public schools can compete on this, and that’s where we feel stronger [about the estimates].
Ohio seems to be able to generate this amount of revenue for a small population of private school students. If you scale that up to something like public school enrollment, then you start to talk about the magnitude of the dollars involved.
Which kids are most likely to benefit from this program? Critics have said that it will likely be wealthier students.
The concern from them, and it’s the same one that I raised about classic vouchers, is that it’s going to be wealthier people handling private school tuition. That still holds true in the federal tax credit when it comes to the private school sector side. The extent that this is disproportionately directed toward private schools is also the extent to which it’s going be disproportionately favoring wealthier students.
In Arizona, that small tax credit I mentioned still heavily favors the 10 wealthiest, large regions in Arizona, is my understanding. That’s a concern because tax-based giving in general seems to follow that pattern, whether we’re talking about schools or anything else.
There’s things that could make this a little bit more equitable. A lot of the scholarship-granting organizations out there thinking about the public school space are deliberately focused on the equity piece. They really see it as their mission to go and contribute in communities that are lower-income, specifically where there’s not a community-based foundation setting itself up to do the same.
I do think that wealthier communities will stand up their own SGOs. There’s going to be a lot more capacity to do that in a wealthier community.
Where you’ve got these national or statewide affiliates coming in and helping schools stand up services and the revenue streams, I think that’s the approach that’s going to be followed in the lower-income and historically marginalized communities. The extent to which this does have potential for lower-income families, I think, is going to be partly a function of how successful those thematic national and statewide SGOs are that are really trying to serve across the board.
If I were to be asked, what types of areas geographically are you most worried about, I would say the rural communities. And that’s true with vouchers, too.
One of my major critiques of vouchers is that they don’t solve fundamental problems related to economic inequality, race-based inequality, geographic inequality. Pretending that the market’s just going to take care of itself is foolish and empirically incorrect. And that applies here, too.
It’s going to take intentionality. If we’re intentional and serious about it, the equity issues will be weakened. If we aren’t and we just walk away, then they will be heightened.
If there’s all this money that could go to public schools and students, why aren’t public school advocates and Democratic politicians jumping in?
[There’s a] culture of compliance with public schools.
If [the rules] don’t say you can, public schools interpret that as, you can’t. In the business world, in the private school world, if it doesn’t say you can’t, they say, all systems go. And a good example of what I mean here is payroll deduction [for contributions to scholarship-granting organizations].
Up to days before the U.S. Department of the Treasury released its regulations where they specifically said payroll deductions are allowed, I could not tell you how many times I was hearing from public schools, “who knows we can? It doesn’t say we can.” Whereas, [school choice advocates] were planning payroll deduction a year ago.
And right now, [public school supporters are] deeply suspicious of who’s in charge of the administration.
They need something very affirmative from Treasury that says, you’re not going to put any other conditions that are going to make it harder for public schools to use that money than private schools.
