Federal Voucher Scheme Uses Misleading Information to Lure States into Defunding Public Schools
- Marianne Burke, PhD
- 5 hours ago
- 6 min read
States are Enticed by Disinformation to Opt-in to the Federal Voucher Program
The Trump Administration and allies are doing what they can to entice states to opt into the Education Freedom Tax Credit (EFTC) program. This program was signed into law in July 2025 as part of HR1, or the One Big Beautiful Bill Act (OBBBA). Now it is up to the Governor of each state to decide whether they want to “opt into” the program before Jan 1, 2027.
There is much confusion about the program, particularly since this confusion is purposefully fueled by massive amounts of inaccurate claims about the benefits of the EFTC program. Two of the most egregious claims are that: 1) public schools will benefit from the program, and 2) public school systems will not be economically impacted. The administration is using those misleading claims along with other misinformation about the need for school choice and constant efforts to vilify public education to entice participation in the voucher program.
This article will evaluate some of the most common and meritless claims being used to entice governors and the families in their states to join the EFTC program. In fact, so much misinformation is circulating about the program, the Education Law Center recently presented and publicly posted a recording of “What almost everybody gets wrong about the Federal Voucher scheme.” 4 Public Education will use this recording as a reference in this document. For example, when the Education Law Center recording explains that misinformation is used by the EFTC to give democratic governors cover for opting into the program and also to fool the general public into thinking the program is beneficial, 4 Public Education will cite that timestamp as “12:14” (i.e., 12 minutes and 14 seconds into the recording) and link to the recording at that timestamp.
False Claim: The EFTC will benefit public schools
It is unlikely that public schools and public school students will derive significant benefit from Trump’s voucher scheme. Technically, the regulations will provide a way for public school students to apply for and accept vouchers, but experts warn that public school students will receive only “crumbs” relative to private schools and their students. Also, experts warn that the voucher scheme is all risk and no reward. In fact Jessica Levin, education litigator with the Education Law Center, warned that the benefit to public schools would be like paying $5 for a benefit of $1 (timestamp 26:26).
The discrepancy between what is technically feasible versus what is probable is related to the fact that Scholarship Granting Organizations (SGOs) have the freedom to grant vouchers to whomever they want and for the amount they want. States cannot require SGOs to offer scholarships to public school students (timestamp 12:00). Most SGOs have specific organizational goals, such as support for religious affiliated schools, thus those goals may override other factors in granting vouchers to public school students.
SGOs will focus the tax credit resources on private schools both because public schools can not accept vouchers and privatization of public education is a well known intent of the program. One has only to review Project 2025, the Conservative Promise and the Administration’s attempts to vilify public schools as dens of indoctrination and immorality to understand the pressure that will be placed on SGOs to focus on private schools. To date, there is nothing in the proposed regulations that seems beneficial to public schools, public school students, or the larger community (timestamp 13:49).
False Claim: The EFTC does not impact public school finances.
School choice advocates love to claim that vouchers will not impact public school budgets, but experts warn that vouchers are likely to shrink public school budgets. Vouchers usually allow taxpayer funds to “follow” students out of public school systems and into private schools–in other words, vouchers provide taxpayer funds to private entities at the expense of public schools.
Unless school districts can find ways to replace the funding lost to private schools, public schools may be forced to cut services to students, including popular and/or necessary programs like advanced academic coursework, special education programs for students with disabilities, and/or programming for English language learners.
Declining enrollment and funding will destabilize most school districts, which is of particular concern in rural areas where there are few private school alternatives. And, unlike federal budgets, states cannot run a budget deficit because states can not borrow money to cover overspending, so school districts are highly vulnerable to funding loss. As a result they must make cuts commensurate with the funding loss. Thus, if funding is pulled from public schools for private vouchers, it can mean fewer staff and teachers, larger classrooms, less student services, cuts to afterschool programming, and older, less well-maintained school buildings, and even schools closing.
Some “school choice” advocates try to minimize the potential impact of students leaving public schools by claiming that public schools would just have fewer students to teach, so what is the problem? Others minimize potential economic impacts by only considering the per pupil allocation and enrollment. However, school district budgets are much more complicated than school privatizers let on, and declining budgets could have devastating impacts on public schools. Fixed costs such as heating, cooling, support staff wages and transportation, will not change even if enrollment and funding drop. Those monthly bills still come due.
Perhaps the biggest impact on public school budgets is that states opting into the EFTC are then responsible for funding oversight of their voucher program, including tracking donations and voucher recipients, and preventing waste, fraud and abuse in the program. None of that comes cheap, and it requires developing an entirely new bureaucracy within the state government.
Some states with existing voucher programs have learned the painful lesson about those hidden oversight costs. Arizona, Iowa, Oklahoma, and West Virginia saw their state budgets balloon well over the original estimates as a result of unexpected costs related to their voucher programs. Also, states with voucher programs often suffer from wasteful spending and fraud (eg. Arizona) due to typically poor oversight of voucher programs. Obviously, because private schools have fewer requirements for transparency and accountability than public schools, there is a need for well structured oversight for voucher programs in states that opt in. The costs of a well structured state oversight program can be substantial.
Governors and policy makers don’t have to be kept in the dark about the true cost of the voucher program to their state and its public school districts. The Economic Policy Institute created a tool for calculating the costs to each school district before states opt into the program. This author encourages those who are considering opting into the federal voucher program to first determine what it will actually cost their state.
False Claim: Many states have already opted into the program
There are reports that about half of the states have “opted into” the EFTC, but that is not true. For example, former Virginia Governor Youngkin claimed, as one of his last actions as governor, that Virginia had opted into the program. Governor Polis of Colorado made similar claims. However, no state has been able to do more than indicate an interest in opting into the program, since joining will not be possible until after the Treasury publishes the final version of the regulations. The release of those regulations is scheduled for September 2026. Before the regulations are finalized, draft regulations will be shared and the public will have an opportunity to comment on them.
False Claim: The ELCT is inevitable in each state
Historically, school vouchers programs have been unpopular and referendums for initiating voucher programs tend to be defeated when put to a vote. But privatizing public education and returning control of public education to the states are major conservative goals and getting the ELCT statute on the books was a celebrated step in realizing those goals.
The ELCT is an unpopular part of the OBBBA. To help this part of the bill pass, it was decided that Governors in each state would be able to decide for their own state whether they would participate by opting into the program. That is why the administration and privatization advocates are trying so hard to entice states to opt in.
Even with each state able to make their own choice about opting in, quite a few members of Congress want to rescind the part of the OBBBA that is the EFTC. Recently, bills have been introduced in both the Senate and the House of Representatives that would, if they pass, strike section 25F, the code for the EFTC, from the OBBBA. Numerous democratic co-sponsors have signed onto each bill - about 30 in the Senate and more than 80 in the House at last count
Although it is unlikely that the EFTC part of the OBBBA will be rescinded while republicans hold a federal government trifecta, efforts to rescind the EFTC have helped stimulate a national conversation about the harmful aspects of the federal privatizing voucher program. Hopefully, this will encourage those thinking about opting into the program to more carefully consider that decision. Also, when a more public education friendly government returns to Washington, DC the truth about the EFTC will already be known and that part of the OBBBA may be rescinded.
