^{The Bottom Line} A School Choice Breakthrough That Costs Taxpayers Nothing

What if you could help a child receive a better education at no cost to yourself?

Beginning in 2027, Americans will be able to do exactly that. Under the Education Freedom Tax Credit, taxpayers can contribute up to $1,700 annually to approved scholarship-granting organizations and, in return, receive a dollar-for-dollar federal tax credit. Every dollar donated will be offset against the taxpayer’s debt to the federal government.

Enacted as part of the One Big Beautiful Bill signed into law on Independence Day last year, the policy establishes the first federal tax-credit scholarship program in U.S. history. Many states already have successful state-level tax-credit scholarship programs that can serve as a proof of concept.

Nonprofit scholarship-granting organizations such as ACE Scholarships, which has provided education scholarships since 2000, will award funds to eligible K-12 students from households earning up to 300 percent of the area median income. Awarded scholarship funds may be used for tuition, tutoring, books, transportation, uniforms, special-needs services, and other education expenses.

The program relies on voluntary private contributions rather than new federal spending. There is no national cap on the total that can be donated, and the policy is here to stay, with no sunset clause. Importantly, it imposes no new federal mandates on schools that allow students to use scholarships for attendance expenses.

The Education Freedom Tax Credit allows families — particularly low- and middle-income households — to access educational options that have long been available only to the affluent. This is a timely opportunity for Americans to help change the course of education in our country. The Nation’s Report Card reveals that roughly seven in 10 public school students are not reading or performing math at grade level, despite decades of ever-increasing per-student public education spending.

The notion that more money is the solution has consistently failed to produce the results taxpayers are promised. The Education Freedom Tax Credit empowers parents to choose a school or education provider for their child rather than being bound to their residentially-assigned district public school. A child’s future should not be determined based on ZIP code or family income.

This parental empowerment approach creates competition in the education sector, breaking down the ineffective near-monopoly, which does not give public schools an incentive to improve. Competition fuels innovation, improves quality, and drives down costs, all of which have been largely missing from K-12 education. When families are restricted to a school based solely on their address, institutions have little reason to improve poor academic results or respond to parent concerns.

Critics of school choice often claim that giving families options will hurt public schools and the students who remain in them. The opposite is true. Competition is a powerful incentive. This is not theory; it is a proven reality across multiple sectors, and it is no different in education. When parents are able to choose the education environment for their children, schools innovate, improve, and better meet students’ needs. Accountability flows from families having options and making informed decisions.

Importantly, this federal credit does not create a new Washington bureaucracy as the funds never pass through a federal agency. Instead, taxpayers redirect a portion of their tax liability to nonprofit scholarship organizations, which, in turn, provide education scholarships to families. Each fully refundable, dollar-for-dollar contribution goes directly toward funding a child’s scholarship.

The Education Freedom Tax Credit won’t solve every challenge in American education, but it does what matters most: it returns power to parents.

Starting in 2027, Americans will face a choice: continue sending all their tax dollars to Washington, with no control over how they’re spent, or direct up to $1,700 toward a scholarship that gives a child access to a quality education at no net cost to themselves.

Contributing to the Education Freedom Tax Credit isn’t just a tax move; it’s a statement. It affirms that parents should decide how and where their children learn.

By participating, each of us can help chart a new course for K-12 education in America marked by opportunity, choice, and accountability.