A new federal tax credit scholarship program championed under the Trump administration is raising alarm bells for public school employees and advocates of fully-funded public education. While marketed as an education choice initiative, this program could quietly siphon billions in federal dollars away from public schools and funnel them into private and religious institutions.
The proposal, HR 1 or The Big Beautiful Bill, passed Congress on July 4 and allows individuals to donate up to $1,700 to nonprofit organizations known as Scholarship Granting Organizations (SGOs) in exchange for a dollar-for-dollar federal tax credit. These SGOs would then provide scholarships to families who could use the funds to send their children to private or religious schools. Though the money bypasses state treasuries, it ultimately reduces the amount of federal funding available for other public services, most notably, public education.
Critics are clear: this isn’t “free money.”
David Knight, an education finance expert at the University of Washington, points out that the program simply diverts federal tax dollars that could have gone to support public schools.
“Every public dollar that gets spent is a dollar that could’ve been spent elsewhere,” he told The Seattle Times. “This is a handout to wealthier families already using private education.”
The eligibility for scholarships—families earning up to 300% of the area median income—means that in places like Seattle, families making as much as $360,000 would qualify. This raises real concerns about equity. Highline Education Association President Jeb Binns said, “This is about privatizing education and making the rich richer. Low-income students and students with disabilities will be left behind.”
Superintendent Chris Reykdal strongly opposes the program. He says that public education is meant to serve every child, not just those who can afford tuition even with a partial scholarship.
“Privatization drives more segregation by religion, income, race, and disability,” he said. “I am unequivocally opposed to using public funds to illegally fund privately operated schools that are not accountable to voters.”
Washington Gov. Bob Ferguson is also skeptical. He has ordered his team to investigate whether the funds could benefit public school students.
For public school districts, the stakes are high. Public schools receive funding based on enrollment. If students leave for private schools, districts could see short-term budget cuts that threaten jobs, programs, and services—especially those that support our most vulnerable students.
School employee unions and public education advocates must remain vigilant. While the program may sound harmless on the surface, it is yet another step in a broader national effort to defund, delegitimize, and ultimately privatize public education.
This is not about choice—it’s about consequences. And the cost may be nothing less than the future of our public school system.