What a federal school choice bill would mean for Minnesota

A federal scholarship tax credit bill that would expand educational freedom to all 50 states has passed the U.S. House Ways & Means Committee and is headed to the U.S. House floor.

Through privately funded scholarships, the Educational Choice for Children Act (ECCA) would give families the opportunity to access the learning environment that best fits their children’s needs.

As a tax credit, the education scholarship bill requires no new federal money. It also has no role for the U.S. Department of Education, imposes no federal mandates, and has safeguard language that protects religious liberty and private school autonomy.

Tax credit scholarships are funded through private contributions made to approved non-profit scholarship granting organizations with 501(c)(3) status. Those nonprofit organizations then distribute the scholarships to eligible students. Courts across the nation, including the U.S. Supreme Court, have “concluded that funds donated to private charities are private funds, regardless of whether the donation makes the taxpayer eligible for a tax deduction or a tax credit,” explains the Institute for Justice.

To be eligible for the scholarship, recipients must be eligible to enroll in a public elementary or secondary school and be a member of a household whose family income is not greater than 300 percent of the area median gross income.

Education expenses the scholarship can be used toward include tuition, curriculum and curricular materials, books or other instructional materials, online educational materials, tuition for tutoring or educational classes outside of the home, fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or other exams related to college or university admission, fees for dual enrollment, and educational therapies (occupational, behavioral, physical, speech-language) for students with disabilities provided by a licensed or accredited practitioner or provider.

Because the ECCA would expand parental choice in education to all 50 states, financial barriers keeping certain Minnesota families from accessing alternative education paths would be removed. (Minnesota has had several opportunities to pass tax credit scholarships and join the 20 states that already have such a program in place, but Democrats and the teachers’ union opposed those legislative efforts.) In states with existing school choice laws, the ECCA would be an additional option and not interfere with state level initiatives.

Tax credit scholarships are popular — according to a May 2022 Education Next survey, Democrat (64 percent) and Republican (59 percent) respondents voiced support for the scholarships. EdChoice’s 2024 Schooling in America survey found that more than two-thirds of Americans support tax credit scholarships. Favorability increased three points from last year.

Check out the short video below from EdChoice to see how tax credit scholarships work.