Federal Vouchers: Red Carpet for Private Institutions, Roadblocks for Public Schools

How the Fine Print on Trump’s Voucher Program Is a Blueprint for Privatization

The rules are out. And they’re exactly as bad as we feared.

Recent guidelines for the federal voucher program confirm that the so-called “boost” for public schools is less a level playing field and more a maze of barriers. These barriers make meaningful participation, at best, extremely challenging, and at worst, an affront to the principle that all students should have access to a free, high quality public education.

For context: the Trump administration launched what is estimated to be a multi-billion dollar tax credit program to fund school vouchers. It is worth noting that this is the first and only dollar-for-dollar federal tax credit with no total budgetary cap, meaning it will create a significant hole in the federal budget while providing little oversight over how funds are actually used. These funds will be distributed through Scholarship Granting Organizations, or SGOs. Proponents will tell you the program is open to public schools, so it must be fair. Don't be fooled.

A Windfall for SGOs That Can Reject Public School Students 

Proposed regulations prohibit states from regulating SGOs more stringently than the federal government requires, while explicitly granting SGOs the authority to restrict who can and cannot receive a voucher. SGOs can limit vouchers to specific schools, religions, or student populations, or simply exclude public school students altogether. They don’t even have to be locally based, as we have already seen in Nevada. States cannot require SGOs to serve students with disabilities or ensure that funded programs provide high-quality learning environments. 

SGOs will essentially police themselves, and Nevadans have already seen what happens when SGOs are left to their own devices. With our state’s more limited voucher scheme, SGOs were caught hoarding and investing funds rather than serving students, while failing to comply with even the most minimal of reporting requirements. Lawmakers have attempted to rein in SGOs with recent legislation, but under Trump’s voucher plan, the state will be stripped of that authority. 

And with the federal voucher scheme enabling SGOs to pocket 10% of the taxpayer funds flowing through their organizations and to fund for-profit education services, it’s no wonder several newly created SGOs have the backing of billionaires and private equity firms looking for their next big payday.

The regulations also authorize the use of third-party “digital wallets” to track qualified expenses. Arizona currently uses a similar system, one where vouchers have reportedly been used to purchase toys, jewelry, appliances, and vacations. We’ve also seen problems with digital wallet vendors price gouging states while providing little oversight on the service they offer.  If the goal was to inspire confidence, this misses the mark entirely.

Public and Private Schools Are Not Playing by the Same Rules

Private schools face almost no restrictions on how they use these funds. Public schools face a long list of them. A private school can use vouchers for tuition, to hire teachers, reduce class sizes, or purchase necessary school supplies. Public schools cannot. Public schools must remain free and open to all students and therefore cannot (and should not) charge for things like instruction or essential educational resources and services. A voucher for a public school student will not be able to reduce that child’s class size, pay for a teacher or other paraprofessional, support required special education services, or account for chronically underfunded necessities. The game is rigged against public schools.

Public School Vouchers Will Likely Fuel Further Privatization

For public schools to use these funds at all, they must create a new, fee-based program or service and hope that enough students at that school receive vouchers to sustain it. Public schools cannot apply voucher funds to services they already provide for free. In practice, these limited public school vouchers will likely end up flowing to outside vendors, further privatizing resources that should be universally available to all students. 

For example, a school may want to offer a new after school tutoring program, but may struggle to arrange for enough students to apply and receive a voucher to sustain it (especially since SGOs can reject public school students altogether). Instead, students may have to pay a corporate tutoring service to utilize the funds. Rather than tax dollars supporting easy-to-access and widely available tutoring on-site, only the handful of students with the means to travel to an off-site, for-profit company will benefit. This will eventually create a pay-to-access structure for what should be readily available public services. Or worse, would the school districts have to turn free programs into fee-based programs just to participate?

Private School Vouchers Can Double Up

Students can stack Nevada’s existing Opportunity Scholarship with the new federal scheme, meaning private schools can receive more per-pupil funding than public schools or charter schools. Even without stacking this could be possible, given SGOs have no limit on how much they can give to a single student. Maybe this works to serve the well-documented trend of private schools raising tuition beyond even inflation when voucher programs are introduced. 

This also begs the question - why should Nevadans’ tax dollars still fund the Opportunity Scholarship Program? Does our state need duplicate sets of SGOs diverting even more taxpayer dollars to private schools? Shouldn’t those millions of state dollars be instead invested back into our public schools? Due to these limitations, most experts predict the overwhelming majority of vouchers will flow to private schools, and that is by design.

The federal voucher program places significant administrative burdens on public schools while providing virtually no restrictions on private institutions. The rule limiting vouchers to fee-based services at public schools is not an oversight, it is a door deliberately left open to accelerate the privatization of public education. We have seen what unchecked privatization has done to other public sectors. This is one more calculated step in that direction.

All of this is unfolding alongside the Trump Administration’s efforts to cut funding for vulnerable public school students, food assistance, and other resources for economically disadvantaged families. More welfare for the wealthy, while working class families are abandoned.

Experts recently identified vouchers as one of the least effective and most expensive education interventions. We already know vouchers increase segregation, permit discrimination, divert funds away from public education, promote waste and abuse, do not result in better academic outcomes, and even drive up the cost of private education. This new scheme has nothing to do with improving the lives of students or  strengthening our communities. It is yet another example of the billionaire class profiting off a public service that, if not protected, will soon become just another way to squeeze every last drop out of the rest of us.

ENN has long encouraged public school districts to attempt to access these dollars. But it is now clear that while the red carpet has been rolled out for private schools, public schools face a deliberate set of structural barriers designed to limit their participation. That is not a level playing field. It is a policy choice made at the expense of public schools and our most vulnerable students.

What can we do to support our students? 

This election, support candidates that don’t just say they care about education, but commit to protecting it from privatization and profiteers. Vote for candidates that have real solutions to reverse the systemic disinvestment from our public schools. Early voting is underway. Election day is November 3rd. Make your voice heard.