Education Freedom Scholarships: 3 Things You Need to Know

Last week, Senator Ted Cruz (R-TX) and Congressman Bradley Byrne (R-AL), in conjunction with the US Department of Education, unveiled the Education Freedom Scholarships and Opportunity Act. According to Education Secretary Betsy DeVos, “Education Freedom Scholarship will finally give students the opportunity to learn in places and grow in ways that have too often been denied to them.”

AFC supports the proposed legislation because it expands education freedom and choice for families. You can read the full statement from John Schilling, AFC’s President, here.

1) What is an Education Freedom Scholarship?

Education Freedom Scholarship (EFS) could be used for a myriad of K-12 education-related purposes. Specifically, each participating state would have the freedom to determine permitted education expenses, as well as eligibility requirements for student participation and education providers.

Families would have autonomy over how they used the funds for their child’s elementary and secondary education. This could include things like concurrent and dual enrollment, career and technical education, tutoring, certifications, private school tuition, and much more.

2) Would it be Mandatory for States to Participate?

No. Participation is entirely voluntary and under the discretion of the states.

With that said, several states already have programs dedicated to empowering students and families, and particularly low-income families, with high-quality school choice options. Specifically, there are:

  • 44 states and DC have Charter Schools
  • 26 states and DC have Private School Choice Programs
  • 18 states with Scholarship Tax Credit Programs
  • 13 states and DC have Voucher Programs
  • 13 states have Special Needs Scholarship Programs
  • 6 states with Educational Savings Account Programs

3) How Would the Scholarships Be Funded?

According to the US Department of Education, EFS would be fully-funded through voluntary contributions—either by an individual or business—to nonprofit, Scholarship Granting Organizations that have been approved by the state. Contributors would then receive a non-refundable, dollar-for-dollar tax credit; meaning their income taxes would be reduced by the amount they donate. However, there are limits. The federal tax credit would be capped at 10 percent of an individual’s gross income and 5 percent of a business’ taxable income.

Importantly, EFS would not rely on or take away any funds that are dedicated to public education nor would it create a new federal education program.

For more information about the scholarships and the proposed bill, go to the EFS website.