Illinois’
comeback
story
starts here.
Policy Analyst
The Educational Choice for Children Act continues to progress after it was included in the budget reconciliation bill passed by the U.S. House on May 22. It is cause for hope for 15,000 low-income Illinois students who lost their private-school scholarships in 2023.
Illinois students are closer to benefitting from a federal school choice program after it was included in the U.S. House budget reconciliation bill passed May 22 and now on the U.S. Senate floor.
If passed by the Senate and signed by President Trump, the Educational Choice for Children Act would benefit low-income families across the nation. It would provide K-12 scholarships to attend private schools or pay for other education expenses for children remaining in public schools.
The bill is cause for hope for the 15,000 low-income Illinois students whose private school scholarships were taken away when teachers unions pressured state lawmakers in 2023 to kill the Invest in Kids program. That made Illinois the only state that year to move opposite the national movement toward letting parents choose their children’s schooling.
What is the Educational Choice for Children Act?
The Educational Choice for Children Act is a federal tax-credit scholarship program which would provide K-12 scholarships to eligible students across the country. Taxpayers would receive a dollar-for-dollar federal tax credit up to the greater of $5,000 or 10% of their income each year for donations to non-profit scholarship granting organizations, or tax-exempt organizations providing scholarships to students.
In other words, no federal money would be directed toward scholarships, but private individuals would be granted tax credits for donating. The program would be limited to $5 billion in tax credits from 2026 to 2029, with $10 million being allocated specifically to each state and the rest allocated on a first-come, first-served basis. However, the $5 billion volume cap would increase by 5% for the following year if 90% or more of the $5 billion cap is used in a year.
Who can receive federal tax credits for donating to a scholarship program?
Any taxpayer can receive federal tax credits for making qualified contributions to a scholarship granting organization, which is a tax-exempt organization providing scholarships to students. Taxpayers would receive a dollar-for-dollar federal tax credit up to the greater of $5,000 or 10% of their income each year for donations to non-profit scholarship granting organizations.
Who can apply to receive a tax-credit scholarship?
Recipients of the scholarship funds would be limited to low-income students whose family household incomes were at or below 300% of the median income level in their area. The program’s goal is to “expand educational freedom and parent choice to families unable to afford alternative schooling options.”
What can scholarship recipients do with their scholarship funds?
Scholarship recipients can be enrolled in either public, private, religious or home schools. They can use the funds for expenses including tuition, curriculum or books, online educational materials, tutoring or additional educational classes, fees for advanced placement exams or college admission exams, fees for dual enrollment or educational therapies for students with disabilities.
Why are teachers unions opposed to the federal school choice program?
As they did in Illinois, teachers unions are trying to push the narrative that a donation-driven program somehow takes money from public education. The National Education Association has actively opposed the bill, claiming education choice for children is bad and locking them into lackluster public schools is good.
Illinois bucked national trends in November 2023 when lawmakers made Illinois the only state to roll back the state’s tax-credit scholarship program. But if the federal tax-credit scholarship program is enacted, low-income Illinois students could once again benefit from tax-credit scholarships to attend private schools or access additional educational support.
What’s next for the federal school choice program?
The U.S. House passed the budget reconciliation bill, including the Educational Choice for Children Act, on May 22. Now, the budget reconciliation bill will be considered by the U.S. Senate.
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Illinois’ comeback story starts here
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