Every year, the Children’s Scholarship Fund gives children scholarships to attend the school of their parents’ choice. Unfortunately, not every family is as lucky as Janet’s. Millions of children who would benefit from a scholarship still wait, trapped in dead‐end schools. As a parent of another fortunate scholarship recipient put it: “Many parents, like myself, can’t live with just allowing our kids to be guinea pigs for an insufficient education system as it ‘works through’ its problems.”
The Children’s Scholarship Fund is a purely private effort launched by financier Ted Forstmann and Wal‐Mart heir John Walton. Is there anything government can do to encourage more scholarships for low‐income children? There is: a federal education tax credit.
If individuals were allowed to subtract $500 from their tax bills and put the money toward scholarships, we estimate that $6 billion would be raised. That’s enough money to give 3 million students scholarships worth $2,000 each. For those who would “leave no child behind,” scholarships are a good place to start.
Under the plan, any taxpayer who donates money to a non‐profit scholarship fund would receive a dollar‐for‐dollar reduction in his federal income‐tax liability, up to $500. The scholarship fund pools the donations, awarding grants to needy children. We know this can work: It’s modeled after a highly successful scholarship program in Arizona, where citizens raised more than $14 million for scholarships in just one year.
Why would individuals donate money for scholarships? The better question is, why wouldn’t they? For one, tax credits give people control over how their tax dollars are spent. People who believe the current education system is failing and want to give low‐income children an alternative would be able to do so. A scholarship credit can also save taxpayers money. Each student who attends a private school is one less student who has to be educated at public expense. If 3 million children use their scholarship funds to transfer from public schools to private schools, the potential savings to taxpayers would be nearly $12 billion.
Giving parents the financial reins is the key to accountability in education. For too long, the establishment has passed the buck when students fail, and generations of children have paid the price. Since 1970, student achievement has stagnated or declined, despite a two‐fold increase in spending, smaller class sizes and improved teacher salaries. The U.S. Department of Education finds that less than a third of the nation’s fourth‐graders are proficient at reading.
Parental choice makes educators accountable now, not in another five, 10, or 20 years. When parents have the ability to choose schools, bad schools must improve or shut down, and good schools where children excel will expand and flourish.
Of course, choice should not be limited to families of a certain income level. Side by side with the scholarship credit, policymakers should consider adopting a parental choice credit in an equal amount, which could be used for private‐school tuition.
Education tax credits could represent a new era of bipartisanship in education policy. Many prominent Democrats and Republicans support scholarship organizations. For instance, Senate Minority Leader Tom Daschle (D., S.D.) and Rep. Charlie Rangel (D., N.Y.) sit on the Children’s Scholarship Fund’s Board of Advisors, as do Senate Majority Leader Trent Lott (R‐Miss.) and former First Lady Barbara Bush.
House Minority Leader Dick Gephardt (D., Mo.) recently said, “There should be no partisanship about children and education.” With improving education at the top of the public’s priority list, Republicans and Democrats should embrace a federal education tax credit as the best opportunity to demonstrate that the “change in tone” in Washington is yielding real results.