A new proposal advanced by House Republicans would create the first-ever federal tax credit program to support Scholarship Granting Organizations (SGOs) benefiting elementary or secondary public, private, or religious schools. The plan, part of a larger tax package, sets aside $20 billion over four years. [USA Today]
Why it matters: If passed, the proposal would give individuals a dollar-for-dollar federal tax credit for donations to SGOs, which would provide funds to families for approved education expenses. See section 25F of the House bill. [The New York Times, subscription model]
How it Works
- Individuals could contribute to SGOs and receive a federal tax credit equal to their donation, capped at $5 billion annually.
- Funds could be used for tuition, books, homeschooling materials, tutoring, and other qualified expenses.
- Families earning up to 300% of area median income would be eligible—meaning a broad share of U.S. households could participate.
The impact: Supporters say the proposal would expand access to educational options, especially in states without existing scholarship infrastructure. Some projections suggest it could double the number of students receiving private education scholarships nationwide. [NPR, K-12 Dive]
The debate: Backers frame the plan as a win for families seeking flexibility and alternatives to their local public schools. Critics argue it could divert tax dollars from public systems, lacks federal protections for students with disabilities, and may disproportionately benefit higher-income families and those in urban areas. [The 74]
What’s next: The measure has cleared the House Ways and Means Committee and is expected to move to a full House vote. Under reconciliation rules, it could pass the Senate with a simple majority.
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