Education Next | Op-Ed: Rulemaking Must Resolve Ambiguities in Federal School Choice Law—and Fast

Congress has given the U.S. Treasury Department responsibility for the success or failure of a mechanism that could generate scholarships for millions of K–12 students. Treasury’s rules for the new federal scholarship tax credit will determine whether that mechanism works effectively to transform elementary and secondary education in America.

The new tax credit is a remarkable legislative achievement. Now embedded in the federal tax code—with no aggregate cap or expiration date—is a one-for-one, nonrefundable credit to encourage charitable donations to K–12 scholarship-granting organizations (SGOs). Students attending traditional public, public charter, private, and religious schools are all eligible for various types of scholarships.

Yet hasty, last-minute redrafting of key provisions created some ambiguities that only Treasury rulemaking can resolve. As a longtime advocate of school choice and education reform, I offer the following advice.

Act quickly. The credit isn’t available until January 1, 2027, but for the measure to succeed in helping students, a lot needs to happen before then. If not expedited, the formal rulemaking process could take a year or more—not accounting for inevitable lawsuits from teachers unions trying to disrupt implementation. Governors need time to determine which SGOs will satisfy federal requirements, and the SGOs need time to design their scholarship programs and identify potential donors, scholarship recipients, and quality education providers. The sooner we have rules, the more likely it is that implementation will succeed.

To read the article by DFI’s Jim Blew published in Education Next, click here.