Provide universal school choice

President Donald Trump's expansive tax and spending law includes the first-ever federal tax credit specifically for people who donate to support private school vouchers.

The new legislation adds a new option for people to support school choice programs, but does not guarantee what Trump describes as "universal school choice."

The term "school choice" generally pertains to policy or program initiatives that use public money to support families' alternatives to traditional local public schools. It includes public charter schools, private school voucher programs, online schools and homeschooling. 

Trump has promised to expand programs supporting school choice to all states and give homeschooling families access to the same financial resources available to families of students who attend traditional K-12 schools. His tax and spending law included provisions that broadened how families can use 529 investment plans to cover homeschooling expenses, such as curricular materials and online education.

According to EducationWeek, a nonprofit, nonpartisan news organization that covers K-12 education, 30 states and Washington, D.C., already offered financial assistance to families for private schools, including vouchers and tax credits as of June 2025. Extending these programs to every state could increase students' educational options, but analysts warn that, even then, the Trump voucher program's reach is limited.

Critics argue that such policies increase education inequalities and erode public school resources and tend to benefit wealthier households.

"So-called school choice is really a policy shift to subsidizing private education with public tax revenues. A tax credit for tuition paid to private schooling — some of it religious education — takes money away from public education," Martin Carnoy, labor economist and professor at Stanford's graduate school of education, said.

Tax credit scholarships provide taxpayers with full or partial credits when they donate to designated nonprofits that dole out private school scholarships. Before the Educational Choice for Children Act, signed into law by Trump on July 4 within the larger spending package, these tax credit scholarships were state-based. 

Trump promised in September 2023 to collaborate with states and Congress to ensure universal school choice for all American families. On Jan. 29, he signed an executive order directing the Education Department to guide states on how to use federal funding to back K-12 scholarship programs. 

The July law introduces a permanent tax credit that allows people to donate up to $1,700 to a designated scholarship-granting organization. Donors are eligible for a 100% federal income tax credit — a discount on their tax bills. This means that a taxpayer who owes $10,000 to the IRS could donate $1,700 to a scholarship fund, reducing the tax payment to $8,300. 

"At its core, this is an unprecedented use of public federal taxpayer dollars to pay for private and religious schools," Jon Whiten, deputy director of the Institute on Taxation and Economic Policy, a left-leaning think tank, said. 

The program is scheduled to take effect Jan. 1, 2027. Congress' nonpartisan Joint Committee on Taxation estimated the program could cost the federal government $3 billion to $4 billion per year.

The law includes no program spending cap. 

"We think that removing this important guardrail could balloon the overall cost of this new tax break by billions of dollars each year," Whiten said. 

To comply with the law, states must create lists of tax program-eligible scholarship-granting organizations. Those organizations will have discretion over how the funds are distributed.

Families under 300% of their residential area's median gross income are eligible for the tax credit. That means that households making more than $300,000 annually — which is over three times the national median household income — could receive scholarships. 

The Institute on Taxation and Economic Policy estimated more than 138 million people could be eligible for the tax credit. 

"Every state will have school choice soon," Tommy Schultz, CEO of the American Federation for Children, a universal school choice advocacy group, said in a statement celebrating the policy's passage. "For a generation, our movement has fought to give all families, especially lower-income families, the freedom to choose the best K-12 education for their sons and daughters, and now President Trump has signed into law the single biggest advancement of that goal." 

However, experts say that voucher programs often favor wealthier families in urban and suburban areas. A May analysis by the Brookings Institution, a nonpartisan think tank, also found that rural families are less likely to benefit from either the tax credit or the scholarships because they tend to have both lower incomes and less private school access than families in urban and suburban communities. 

"It's a simple matter of access," Whiten said. 

States must opt in to the federal tax credit program and are not required to participate. If a state chooses not to opt in, its residents cannot take part in the program. 

The Educational Choice for Children Act marks a step toward implementing school choice across states, but does not guarantee Trump's promised universal school choice. The tax credit program does not begin until 2027, and the impacts of the legislation are yet to be seen. Trump has years to make more headway on this promise. For now, we rate it In the Works.

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President Donald Trump instructed federal officials to find money for K-12 school choice.

The Jan. 29 executive order aligns with a 2024 campaign promise to work with states and Congress "to provide for universal school choice for every American family."

PolitiFact is tracking 75 of Trump's campaign promises on the MAGA-Meter. Over the next four years, we will periodically evaluate the new administration's progress on Trump's 2024 campaign promises, just as we did with Barack Obama, Trump during his first term and Joe Biden. 

Trump's executive order directs the Education Department secretary to issue guidance regarding how states can use federal dollars to "support K-12 educational choice initiatives." (Trump nominated former Small Business Administration Administrator Linda McMahon to fill the secretary role.) He provided a 60-day deadline. 

Within 90 days, federal officials must submit a plan to recommend how to use grants for school choice, including for low-income students, military families and Native American children. 

In 2016, Trump promised that he would add $20 billion in federal money to school choice, but it didn't happen.

"School choice" is a broad term that can include public school magnet programs, programs that direct public money to charter schools and private school scholarships. (Magnet programs that emphasize specific study areas or teaching methods to serve students from different backgrounds.)

"School choice" supporters say these programs give parents more free or low-cost options for their children, especially if those children are zoned for poorly performing schools. Critics say the money should be directed instead toward improving local public schools and that some programs provide less transparency than government-run school districts.

It is unlikely that we'll see a large-scale federal choice program that would provide government funding to all or nearly all families to pay for private school or other education services, said Jon Valant, director of the Brown Center on Education Policy at the Brookings Institution, a think tank.

"Doing that at the federal level would be extraordinarily expensive and controversial," Valant said.

It would be controversial with Democrats and also with many rural Republicans who have resisted state-level private school choice programs because there aren't many private schools in their areas, Valant said.

"Other conservatives might like the idea of private school choice programs — even in their own communities — but dislike the idea that the federal government would impose that decision on communities nationwide," Valant said. "There are real political obstacles to creating that type of program at the federal level." 

The majority of education policy is set at the state and local level, and the federal government provides about 10% of public education money, said Derrell Bradford, president of 50Can, an education advocacy organization that supports school choice.

"So it would be difficult for the President and the US Department of Education to 'order' school choice nationally," Bradford said, though the president could use the bully pulpit to influence state policies.

The Education Department's charter school programs, which Congress funds, could be expanded and made more flexible to offer more choice.

Republican senators in January introduced the Educational Choice for Children Act, which provides a charitable donation incentive for people and businesses to fund scholarship awards for students to cover expenses related to K-12 public and private education. A similar bill in 2023 did not advance to a vote.

We will monitor the Trump administration's progress on "universal" school choice. For now, we rate this promise In the Works.