On this episode of EdChoice Chats, Brian Ledtke talks with John Schilling, president and founder of 2020 Strategies and former president of American Federation for Children, and Lauren May, director of advocacy at Step Up for Students, about the Education Choice for Children Act.
They explore the implications of the federal scholarship tax credit, its impact on public schools, and the importance of state participation. The discussion emphasizes the empowerment of parents in choosing educational options for their children and addresses common misconceptions surrounding the bill.
Brian Ledtke: Hello and welcome back to another edition of EdChoice Chats. I’m Brian Ledtke and I’m on the communications team at EdChoice and we’re in Rome today at the International School Choice and Reform Conference and today I’m joined by John Schilling and Lauren May and we’re talking about the Education Choice for Children Act but before we get to that I want you guys to both introduce yourselves and also say how you got involved in the school choice movement.
John Schilling: Sure, well Brian, first thanks for having us. We really appreciate it. It’s a great opportunity to share what we know about this federal scholarship tax credit.
So I’m John Schilling. I’ve been in the school choice movement since I feel like since the beginning of time, since the late 90s. I previously ran the American Federation for Children for many years.
I’m now a federal lobbyist and have been focused on trying to get this federal scholarship tax credit over the finish line for the last eight years. Really happy we finally did it. Lots of work ahead but it’s going to be a really really great victory and great opportunity for parents and kids throughout the country.
Lauren May: And I’m Lauren. Thanks again Brian for having us. It’s really great to be here.
I work in Florida at Step Up for Students and I am the vice president of the federal scholarship tax credit. So what we’re doing in Florida is thinking about how we can use this scholarship to help the families we currently serve and the families who have kids that attend public school in our state. So we’re really excited about that.
I love being able to see students thrive and I think this scholarship is going to give many families across the nation new opportunities for educational options. And so it’s really exciting and I’m really thankful for John and his team’s great work in DC to get us where we are today.
Brian Ledtke: Well thank you both for joining us. So this is a big topic to impact in a short amount of time. But for a first question for people who haven’t heard about it or hearing about this or maybe just seen it mentioned in the news before.
What is the Educational Choice for Children’s Act?
John Schilling: Well so let me let me first start right there. So the original bill was the Educational Choice for Children Act that was introduced back in June of 2022. As we went through the process what we ultimately ended up with and the bill itself it’s a federal scholarship tax credit.
The name of the bill was the Educational Choice for Children Act. As we went through the process and we went through the House and the Senate through this process that we call reconciliation which is a very it was a very bizarre process. But the short way to explain this is when one party has control of the White House the House and the Senate they can do reconciliation bills.
They can do two each year and it allows it allows you to avoid the 60 vote threshold in the Senate. For your listeners who may be familiar with the dysfunction of Washington D.C. we cannot get anything done. We can’t pass appropriation bills.
We can’t pass regular bills you know because we have this 60 vote threshold in the Senate. And so when you have this reconciliation process that allows you to pass something with just 51 votes. That was really really important.
But what this bill is it’s a federal scholarship tax credit. It is permanent and uncapped. Individual taxpayers can give up to $7,800 to non-profit scholarship granting organizations around the country.
21 states currently operate tax credit scholarship programs the biggest of which is Step Up for Students in Florida. They’re kind of the model for America because they’ve been around so long and do such amazing work. But taxpayers will be able to contribute $1,700 to these scholarship granting organizations.
States will have to opt in to participate. That in our view was kind of an unfortunate addition to the law. But nonetheless we’re going to work very hard to try to make sure that every state around the country opts in because it’s really important.
Because the taxpayer is going to be able to contribute to a scholarship granting organization whether a state opts in or whether they don’t opt in. And if you’re a governor in a state why would you want taxpayers in your state sending money to scholarship granting organizations in another state? That just doesn’t make any sense.
And at the end of the day the intent of the law is for students in any educational environment to benefit public or private. So we think there’s every incentive for every state to opt in.
Lauren May: And I just want to clarify the $1,700 tax credit to people like me in Florida we don’t have an income tax. So just in case you don’t know what that means you can donate $1,700 to a qualified scholarship granting organization in any state by the way. So if you live in California and your governor does not opt in you can send your money to Step Up for Students in Florida or to any other scholarship granting organization that is participating and approved as an SGO for this bill.
And so what that means is you would give that money and in 2027 so the bill goes into effect on January 1st of 2027 so you can donate in 2027 and then when you submit your 2028 taxes if you owed $1,700 that amount that you owe the government would be brought down to zero because you chose to give it to a scholarship granting organization to create a scholarship instead of sending it directly to the IRS when you have to pay your taxes.
So I’m just explaining that for people that might be listening like me who aren’t tax experts. Another really interesting thing is that each time you get paid if you have a job you send money or money is withheld that is going to go to the IRS when you pay your taxes it’s called your withholdings. So when you’re thinking about how am I going to get $1,700 to donate you can actually change the amount that you give the IRS each month in your paycheck and you can give it to take $1,700 off for the year it’s about $60 a paycheck if anybody’s curious and thinking they might want to do this you would change your withholdings subtracting $60 per paycheck and then that money would go to the scholarship granting organization. So then you give that money to the scholarship granting organization and you actually don’t have to come up with that $1,700 up front because you’re already paying that money to the IRS. You can choose now whether you want to give it to the IRS or give it to a an organization that’s going to use it to create scholarships which will give educational options for kids and families all across the country.
Brian Ledtke: Yeah thanks for explaining that. Is this going to affect the local public school at all if at all?
Lauren May: It will help them greatly because students in public schools are actually eligible for this money. So it’s really exciting when families decide to donate they can donate to their scholarship granting organization of their choice and then if students attend public or private school they’re eligible for a scholarship. So you could be a kid that’s attending public school and use the money for tutoring or extracurricular activities.
So for example if you play on a basketball team or a football team if you are in the band you could use it to buy instruments for the band. So we’re really excited about that because we think that and I know many families in public school who need additional money to pay for especially for tutoring and I think that’s going to make a really big difference for our families that have kids in public school. So if you’re a family that has a kid in public school make sure you share this with your friends make sure you think about which SGO you’re going to donate to now because the biggest and most important part of this bill is that the money has to be raised.
Whatever dollars we raise we can give in scholarships but if we don’t raise the dollars we won’t have the money to give. So it’s going to be really important that everyone in this movement anyone listening to your podcast thinks about who do I know that could donate and spread the word about this great program.
John Schilling: Yeah the eligible the multiple eligible uses is really important. It’s almost like a giant education savings account because there are so many eligible uses for this and that was by design because we wanted to make sure not only when we were moving this bill through congress we wanted to make sure that members from all different parts of the country you know we’re going to be able to we’re going to be that their constituents are going to be able to benefit from this.
So that was really important but you asked a question about how this affects public schools there’s a flip side of this coin. It’s really important to remember because we have opponents out there suggesting that this is going to take money away from public schools that’s completely false. You know the ability of scholarship granting organizations to participate in this it is adding money to the k-12 system.
The only difference is the money is going to be for parents to decide what it is that they want to do with it but it’s additive to the system. It does not affect the amount of money that the federal government or the states are providing for public education. That’s really important.
Are there any other common misconceptions you’ve heard so far from well if you’re Randy Weingarten you’re out there talking about how this is a 50 billion dollar voucher program to privatize education in America. Well the one thing we hope she’s right about is we want this to be a 50 billion dollar effort and look there’s a lot of taxpayers in America who have tax liability and this law very importantly the tax credit is permanent and uncapped. So technically you know any taxpayer in America who has a liability and there’s about what 100 million taxpayers who have liability could contribute.
So we could raise a lot of money for this and and that’s why you know we believe this has the potential to help millions of kids around the country. But as Lauren noted the most important thing is we got to figure out a way to raise money for this because the school choice movement has never dealt with anything like this before. It’s totally new right for us to have to go out and try to raise money in 1700 dollar increments.
It is going to require a marketing effort like nothing we’ve ever done before. It’s not only reaching the public and trying to get the public to donate it’s also reaching CPAs around the country and trying to get them to advise their clients that they should do this. It’s also about making sure there’s a little drop down menu when you’re filing your taxes going to check in the box.
Lauren mentioned withholding of your paycheck and that’s how we’re going to be able to raise money for this.
Lauren May: And I would just say another thing that I’ve heard is oh this is going to hurt public schools and public school teachers will lose their jobs. Actually what we’ve seen in Florida is that our public schools are doing really well since we’ve had scholarships and we now serve over 500,000 kids on a state scholarship program. But our public school teachers are able to benefit from the scholarship because students can use their scholarship dollars to pay those teachers to tutor them.
And so I think it’s going to be a really great way for teachers to make extra money. They can tutor after school on the weekends in the summer. They can make a summer camp a reading summer camp.
So I think there’s a lot of really great opportunities for our public school teachers. And what we’re seeing in the state of Florida which is very unique I don’t think any other state is doing this but our school districts have become providers for the state scholarship program. So a family could say I want my child to go to the algebra class at the public middle school down the street but I don’t want them enrolled full time because I want to homeschool or I want to have my child in private school but the private school doesn’t have an algebra teacher.
They can use their scholarship dollars to pay the public school district for that one class which is really exciting. So we think it’s help districts in our state specifically because they’re already providers for scholarship kids and this will be additional money that those kids can use to retrieve the services that will help them.
Brian Ledtke: So what role then can states and non-profits and school choice organizations play in making sure that families understand and can access the program as we as we get closer to?
Lauren May: Well you want to talk about eligibility John. So there are specific things that you need to do in order to be eligible. So John you want to share?
John Schilling: So you need to be a pretty basic eligibility. It’s 300% of median income by area and you know our analysis of this is this essentially covers about 90% of the K-12 kids in America. So we refer to this as a near universal bill.
Not totally universal but a near universal bill and that’s really important. So you’re going to have so kids all over America are going to have an opportunity to participate in this. But again the most important thing is you got to get your state to opt in.
That’s critically important because if your state does not opt in you’re not going to be able to participate. So that’s critically important.
Lauren May: One thing that I love that EdChoice actually has produced is a map where you can type in your zip code and maybe we can link it to this podcast. It’s awesome. And then it tells you how much money families in that zip code can make based on the federal eligibility.
So basically what you look at is you take the HUD housing number I think or some specific median income number that comes from the government and then you multiply that by three to determine how much money you can make. Well EdChoice did a great job putting a map into place so you can type in your zip code and see how much money you can make based on where you live.
John Schilling: So that’s without having to go to the HUD website. Yours is better. Thank you.
Lauren May: And one thing that is important is that you must live in a state we think you have to live in the state in which a governor opts in. So if you want to have this scholarship for your child, something that you might think about doing is contacting your governor and saying are you aware of the federal scholarship tax credit? The opt-in process is now open.
It just recently opened and we need you to opt in because it will help our child and here’s how. That will make a big difference is to have governors hearing from actual constituents, people that vote for them and from families. I think that’s going to be really important.
Brian Ledtke: So what’s one thing you want every American parent to know about this bill, like the most important takeaway?
John Schilling: It’s a great opportunity for you to have the power to choose the best educational environment for your child. Whether that’s a private school, a charter school, the public school down the street where you may need some tutoring. If you have a special needs child and you don’t feel like you’re getting the kind of special needs services that you need, getting a scholarship for special needs would be incredibly helpful to you.
But this is really about a continuation of the momentum that our movement has created, particularly over the last five or ten years where, you know, school choice in America is now totally mainstream, right? I mean we have 32, 33 states that now have some form of private school choice. I think we have more than 40 states that have charter schools.
Parents in America, K-12 parents in America, they want choices. And this federal scholarship tax credit is going to allow parents in states where we could never pass a private school choice law to actually have this opportunity if we can get their governors to opt in. And as Lauren has noted, this is why you got to accentuate all of the eligible uses for this.
The intent of the law was for a student in any educational environment to benefit. And we want to make sure that all 50 states in the District of Columbia are all opting in to participate in this because it’s an incredible opportunity for parents and kids, not only to, again, not only to send your child to a private school if you want, but to supplement the education that your child is getting with whatever particular need they may have. It’s a great opportunity.
Lauren May: And I would just want to accentuate the opportunity that we have now as taxpayers to help families who need options. And so the way you do that, obviously, is to donate that $1,700 to a scholarship-granting organization in 2027. That’s going to be really important, that you think about, where am I going to give this money and how will I give it?
Am I going to write a check? Am I going to do deductions each month? Am I going to pay $200 or $300 or $400 a month?
How much can I afford? Or would I rather change my withholdings and then use that money to make that donation? So to me, I think it’s really exciting that I can choose, my husband and I can choose, to give that money to a kid whose life could be truly impacted and changed just by making a few changes on our taxes and thinking about how we’re going to allocate that $1,700 when and how we’re going to donate it.
So that would be something I would encourage you all to start thinking about. January 1st of 27 may seem far away, but it’ll be here in the blink of an eye. And we want you all to be ready to make that donation.
Brian Ledtke: Absolutely. Well, there’s a lot to unpack here, obviously, but we just wanted to scratch the surface a little bit, let parents know what’s coming and how they can get ready for it. So you guys definitely covered that for us.
So thank you so much. This is EdChoice Chats. And John and Lauren, thank you so much for joining us today.