Congress diverts $10B in tax revenue to private schools, defunding public education
S. 1810 — Universal School Choice Act · Filed by Ted Cruz (R-TX) · 1 cosponsor · Introduced May 20, 2025 · Referred to committee
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What it does
This bill creates a federal tax credit allowing individuals and corporations to deduct donations to nonprofit scholarship organizations that fund private and religious school tuition and education expenses for K–12 students. The credit is capped at $10 billion annually nationwide, allocated by state based on school-age population and poverty rates. Scholarship organizations must distribute funds within two years, undergo annual audits, and avoid earmarking donations for specific students, but the bill explicitly prohibits government control over how these organizations or private schools operate.
Why we flagged it
The bill's core mechanism is a federal tax credit for donations to scholarship organizations funding private K–12 education. While framed as 'school choice,' it functions as a $10 billion annual tax expenditure redirecting public revenue to private and religious schools.
What the text implies
- The $10 billion annual cap is indexed to grow 5% annually if 90% of the cap is claimed, creating an open-ended entitlement that could exceed initial projections.
- Scholarship organizations may retain up to 10% of donations for administrative costs without restriction, creating a potential intermediary profit center.
The full analysis lists 5 implications of this text.
Who stands to gain
private K–12 schools; religious schools; scholarship granting organizations (intermediaries)