Education for Sale: How the ECCA Empowers Corporations and Weakens Public Schools
A Closer Look at the Federal Voucher Scheme Undermining Equity and Public Education
The proposed Educational Choice for Children Act (ECCA) represents a profound shift in the landscape of American education. At its core, the ECCA proposes a federal school voucher programme that operates through Education Savings Accounts (ESAs), funded by tax-deductible contributions routed through Scholarship Granting Organisations (SGOs). These vouchers, intended for educational expenses ranging from private school tuition to homeschooling materials, are funded by donations incentivised with a 100% federal tax credit. This would effectively create a national framework for “school choice” that bypasses state-level decisions, opening the door for a significant reallocation of federal funds towards private education.
For a state like California, which has long prioritised public education and resisted voucher programmes, the implications of the ECCA are stark. By allowing SGOs to operate nationwide, the act undermines California’s protective policies and diverts resources away from its already underfunded public schools. In a state that prides itself on equity and accessibility in education, this federally imposed programme could exacerbate existing inequalities, with public schools struggling to compete against a system that funnels taxpayer money into private hands with little oversight.
As a public school teacher in California, I see this legislation as a direct threat to the values and stability of our educational system. Public schools are the backbone of our communities, serving the majority of children, including those with the greatest needs. The ECCA risks hollowing out these schools, not only by draining resources but also by promoting a narrative that devalues public education in favour of privatisation. My concern lies not only in the immediate financial impact but also in the long-term erosion of public trust in an institution that should be universal and accountable. If passed, this act could reshape the fabric of education in the US, and not for the better.
What is the ECCA?
On the surface, the Educational Choice for Children Act introduces a federal framework designed to fund private and non-traditional education options through a system of Education Savings Account vouchers. These vouchers function as financial tools provided to families, allowing them to pay for a wide range of educational expenses, including private school tuition, homeschooling materials, tutoring, and specialised services. The vouchers are funded through donations made to Scholarship Granting Organizations, which act as intermediaries, collecting contributions from individuals or corporations and distributing the funds as vouchers to eligible families.
The appeal for donors lies in the unprecedented tax incentives offered under the ECCA. Contributions to SGOs are eligible for a 100% federal tax credit, meaning every dollar donated offsets a dollar of federal tax liability. This goes far beyond the traditional tax deductions available for charitable donations, transforming SGOs into highly attractive vehicles for tax relief. Furthermore, donors can contribute up to 10% of their income, creating significant opportunities for high-income individuals and corporations to reduce their tax burdens substantially. The act even allows donations in the form of marketable securities, offering additional benefits such as avoiding capital gains taxes.
Whilst similar models exist at the state level, such as tax credit scholarship programmes in Arizona and Florida, the ECCA’s federal reach represents a significant escalation. State-level programmes are typically governed by local regulations, which may include oversight of SGOs, eligibility requirements for recipients, and limitations on how funds can be used. The ECCA, however, imposes minimal federal oversight, providing no clear vetting process for SGOs or the vendors who ultimately receive the voucher funds. This lack of accountability raises concerns about fraud and misuse, particularly given examples from state-level programmes where funds have been spent on non-educational items like theme park tickets and cosmetics.
The scope of the ECCA is also far broader than most state programmes. Eligibility extends to families earning up to 300% of the area median income, encompassing many middle- and upper-middle-class households. Additionally, students already attending private or home schools are eligible, meaning public funds could effectively subsidise families who have never participated in the public school system. By expanding the reach and reducing the oversight of such programmes, the ECCA as currently proposed sets a troubling precedent for the future of education funding in the United States.
California’s Current Stance on SGOs
California has long resisted the adoption of tax credit scholarship programmes and the associated SGOs that exist in other states. Unlike states such as Florida and Arizona, which have robust SGO frameworks tied to various “school choice” schemes, California has deliberately avoided implementing similar models. This positions it alongside a majority of U.S. states, including New York, Oregon, and Michigan, which also lack state-level SGOs or tax credit scholarship programmes. These states prioritise public education over privatisation, recognising the potential risks posed by diverting funds to less-regulated systems.
The state’s commitment to public education is deeply embedded in its constitution and budget priorities. Article IX of the California Constitution declares public education to be a vital function of the state, ensuring a baseline of funding that prioritises equity and accessibility. Proposition 98, passed in 1988, further enshrines this commitment by guaranteeing a minimum percentage of the state budget for public schools and community colleges. These provisions reflect California’s commitment to a universal, well-funded public education system that serves all students, regardless of their background, income, or citizenship status.
This commitment extends to maintaining high standards for educators. California is one of the most challenging states in which to become a licensed teacher, with stringent requirements for credentials and ongoing professional development. These high standards, whilst a pain in my backside, are intended to ensure that public school teachers are well-prepared to meet the diverse needs of their students, particularly in a state as socioeconomically and linguistically varied as California. The emphasis on “teacher quality” is a cornerstone of the state’s strategy for fostering equitable and effective public education.
In stark contrast, the ECCA undermines these principles by promoting a system that diverts public funds into private and charter schools with minimal oversight. SGOs under the ECCA lack the regulatory scrutiny that characterises California’s public education system, raising concerns about accountability and the equitable use of resources. Furthermore, the act’s emphasis on tax credits disproportionately benefits wealthy individuals and corporations, whose contributions to SGOs would provide them with significant financial returns while reducing federal revenues that could otherwise support public schools.
The values underpinning California’s education system are fundamentally at odds with the objectives of the ECCA. Whilst California prioritises a robust public education system that serves the common good, the ECCA advances a model rooted in privatisation and deregulation, posing a direct challenge to the principles enshrined in the state’s constitution and educational policies. If implemented, the act threatens to destabilise the progress California has made in building an inclusive and accountable public education system (perhaps that’s the point).
How the ECCA Bypasses State Protections
The ECCA represents a direct challenge to California’s long-standing policies designed to protect public education. By introducing a federal framework that allows SGOs to operate in any state, the ECCA effectively overrides a state’s refusal to adopt tax credit scholarship programmes. This means that SGOs could begin funnelling federal funds into states like California, bypassing state-level regulations and priorities. Families might also engage with SGOs based out of state, adding a layer of complexity that could create logistical and financial problems for those attempting to navigate this unregulated system.
The concept of SGOs operating across state lines raises significant concerns, particularly for families who might be lured into working with SGOs based in states with minimal oversight. These families would hand over their money to the SGO, which would then “launder” the funds into voucher credits whilst taking a percentage off the top as a fee. The lack of transparency and accountability in this process leaves families vulnerable to financial mismanagement or outright misuse of their educational funds. Once the SGO collects its fee, families are often left with little recourse if the organisation fails to deliver on its promises or misallocates funds, especially if the SGO is headquartered in another state.
This type of “across state lines commerce” not only undermines California’s ability to regulate education funding within its borders but also creates significant legal and financial barriers for families. Suing an out-of-state SGO would be a daunting and expensive process, requiring families to navigate unfamiliar legal systems and incur substantial costs just to hold the organisation accountable. Many families, particularly those already struggling to afford educational expenses, may lack the resources to pursue legal action, leaving them effectively powerless if things go wrong.
The situation creates a chaotic patchwork of funding that primarily benefits SGOs and their donors whilst leaving families and students to shoulder the risks. SGOs profit handsomely from their fees, with little oversight to ensure that the remaining funds are used appropriately. Donors, meanwhile, reap significant tax benefits, further enriching themselves at the expense of vital public services. In this system, families take on the financial and legal risks, whilst SGOs and donors walk away with the rewards.
Plus, this erosion of California’s sovereignty in educational decision-making threatens the state’s ability to maintain a coherent and equitable public education system. By introducing unregulated, out-of-state actors into the mix, the ECCA creates a marketplace where profit and privatisation take precedence over students’ needs, leaving families and public schools to deal with the fallout.
At its core, the ECCA is a neoliberal privatisation scheme disguised as “school choice.” By redirecting federal tax revenues into private and charter school systems, the act diverts resources away from public schools, destabilising a foundational public good. It promises empowerment for families, but in reality, it creates a “marketplace” for education where the primary beneficiaries are wealthy donors seeking tax shelters. These donors receive significant financial benefits through the ECCA’s 100% federal tax credit whilst public schools are left to contend with further resource depletion and declining enrolments.
California’s education system is built on principles of equity, accessibility, and public accountability. The ECCA’s unregulated voucher system undermines these values, stripping the state of its ability to maintain control over its educational landscape. By bypassing state-level protections and funnelling money into private interests, the act poses a significant threat to California’s commitment to providing a robust public education system for all students, regardless of their circumstances. This federal encroachment on state education policy represents not just an attack on public schools, but also on the very principles of public governance and equity that underpin California’s approach to education.
The Potential Role of Existing 501(c)(3) Organisations
The ECCA introduces a pathway for existing 501(c)(3) non-profits to expand their missions by becoming SGOs or integrating SGO functions into their operations. For organisations already supporting families and students, this could represent an opportunity to increase their reach and impact. For instance, an organisation like Towcester Abbey, which focuses on filling gaps in the rural public schools in my community for autistic students and their families, could use the SGO framework to provide scholarships for private schooling or homeschooling expenses. In an ethically run model, such organisations might be able to leverage the law to address genuine unmet needs, particularly for underserved or marginalised communities.
The ECCA’s generous federal tax credit incentives create an additional benefit for these non-profits, potentially attracting more donations. The 100% credit allows donors to offset their contributions directly against their tax liabilities, making charitable giving more financially appealing. This influx of resources could help organisations expand their programming and serve more families, amplifying their impact in areas where public schools are struggling or unable to meet specific needs.
However, the potential for good is overshadowed by the significant risks and ethical dilemmas these organisations would face. Operating as an SGO under the ECCA requires navigating a system with virtually no accountability. The lack of oversight raises concerns about how funds are allocated and spent, creating potential for misuse or mismanagement, even within well-intentioned organisations. Furthermore, non-profits engaging with this framework risk being seen as complicit in a system that undermines public education. By participating, they may inadvertently contribute to the privatisation and destabilisation of public schools, perpetuating a narrative that education is a commodity rather than a public good.
History is littered with neoliberal schemes like the ECCA, designed to appear beneficial whilst ultimately serving the interests of the wealthy. These programmes consistently reveal themselves to be traps, benefiting donors and private entities far more than the communities they claim to help. Whilst the idea of providing scholarships to underserved students is appealing, it must be viewed critically within the context of a broader effort to erode public education. Non-profits considering involvement must ask themselves whether the short-term gains in resources and reach justify the long-term harm to the very communities they aim to serve.
The ECCA presents an ethical crossroads for organisations like Towcester Abbey. Whilst it may offer a chance to do some good, the overwhelming lack of accountability, the risks to public education, and the historical patterns of such schemes suggest that the cost of participation may far outweigh the benefits. It leaves one wondering whether non-profits should engage at all in a system so clearly designed to benefit the wealthy at the expense of the public good.
Potential for Fraud and Abuse
The ECCA opens the door to significant potential for fraud and abuse, largely due to its glaring lack of oversight (typical for neoliberal schemes). SGOs, which are tasked with collecting donations and distributing “scholarships,” face minimal regulation under the act. There are no clear requirements for how these funds must be distributed, no standard vetting process for vendors receiving voucher funds, and no rigorous auditing mechanisms to ensure compliance. This absence of accountability creates an environment ripe for exploitation, where funds intended to support education could easily be diverted for personal or corporate gain.
State-level programmes that use similar models have already exposed the vulnerabilities inherent in this system. For example, audits of state ESA programmes have uncovered funds spent on non-educational items such as theme park tickets, luxury goods, and even cosmetics. These cases highlight how, without stringent safeguards, the line between educational and non-educational expenses becomes alarmingly easy to blur. Families, schools, and vendors can misinterpret—or deliberately misuse—funds, knowing there is little risk of enforcement or penalties.
The ECCA exacerbates these risks by scaling the SGO model to a federal level without introducing any meaningful oversight. Opportunistic organisations, including some non-profits, may see the ECCA as a lucrative opportunity to capitalise on the system. SGOs are allowed to keep a percentage of donations as “administrative fees,” creating an incentive for organisations more focused on profiting from federal tax credit donations than ensuring the remaining funds are sent to legitimate educational organisations or used for actual education expenses. The lack of oversight means there is little guarantee that the money will reach students in need or be spent on genuinely educational purposes, further undermining the integrity of the system. Without federal requirements for how SGOs must operate or distribute funds, bad actors could siphon off significant resources whilst leaving families and students without the promised educational support.
Moreover, the lack of regulation surrounding education vendors introduces another layer of vulnerability. Vendors need not meet specific qualifications or demonstrate their ability to deliver educational services effectively. This opens the floodgates for fraudulent or unqualified businesses to profit from voucher funds, further undermining the system’s credibility. Families could unknowingly spend their scholarships on ineffective or even illegitimate services, with little recourse if things go wrong.
The ECCA’s failure to address these oversight gaps threatens to replicate and amplify the issues already seen in state-level ESA programmes. By prioritising privatisation and deregulation over accountability, the act creates a system where fraud and abuse are not only possible but likely. In this landscape, the losers are the families and students who place their trust in SGOs, only to find their educational opportunities diminished by a system designed to serve private interests over the public good.
Impact on Public Schools in the US
The ECCA has the potential to fundamentally reshape education across the United States by standardising “school voucher” systems on a national scale. By introducing federal SGOs and ESA vouchers, the act bypasses state-level decisions on education funding and accountability. For states that already operate voucher programmes or tax credit scholarships, this federal overlay could enhance existing systems, allowing donors and organisations to “double dip” into both state and federal benefits, further exacerbating inequities and inefficiencies in the education system.
In states like Texas, which do not currently use SGOs but have their own brand of “school choice” initiatives, the ECCA creates an opportunity for layered schemes that maximise profits for private interests whilst diverting even more funds away from public schools. For example, donors in Texas could capitalise on both state-level tax benefits and the federal 100% tax credit offered under the ECCA, multiplying their financial gains whilst public education systems bear the cost. This kind of “double dipping” not only incentivises privatisation but also deepens the systemic challenges facing public schools, particularly in low-income and underserved areas.
At its core, the ECCA reflects a broader ideological push toward the privatisation of education, a hallmark of neoliberal policy frameworks. By framing this as a “school choice” initiative, proponents mask the underlying agenda of shifting education from a public good to a private commodity. This approach prioritises so-called “market-driven solutions,” treating students and families as consumers and education providers as profit-driven entities. The long-term effects of this shift could be devastating, eroding public trust in schools, exacerbating inequities, and undermining the shared societal commitment to accessible, high-quality education for all.
The financial structure of the ECCA underscores its true beneficiaries: wealthy donors and private organisations. The act’s generous tax incentives create a lucrative financial vehicle for those seeking to reduce their tax burdens, offering them a dollar-for-dollar credit on contributions and even allowing them to avoid capital gains taxes by donating marketable securities. These incentives have little to do with improving educational outcomes and everything to do with creating a tax shelter for the wealthy, all while draining federal resources that could otherwise support public schools.
By standardising this model across the country, the ECCA threatens to entrench a two-tiered education system where public schools are left to serve the most vulnerable students with dwindling resources, while private and charter schools thrive on government-subsidised vouchers. This erosion of public education’s foundation is not just a risk for individual states but for the entire nation. The act prioritises profit and privatisation over equity and accountability, leaving families and students as mere pawns in a system designed to benefit the few at the expense of the many.
Final thoughts …
The Educational Choice for Children Act poses a significant threat to the integrity of California’s public education system and public schools across the nation. By funnelling federal tax revenues into unregulated Scholarship Granting Organizations and diverting funds to private and charter schools, the act undermines the foundation of equitable, accessible public education. For California, which has long resisted such schemes, the ECCA threatens to override state policies that prioritise transparency, accountability, and the public good. The result would be a destabilised system where public schools are left underfunded and struggling to serve the most vulnerable students.
Non-profits occupy a complex role within this landscape. Whilst some may use the SGO framework ethically to address genuine gaps in education, their participation risks exacerbating the privatisation trend. The act’s lack of oversight makes it difficult to ensure that funds are used appropriately, raising ethical questions for organisations that choose to engage. Moreover, corporate donors, incentivised by the ECCA’s 100% federal tax credit, could dominate the funding landscape, with contributions that benefit their bottom line far more than the students they claim to support. These tax credits allow corporations to effectively make cost-neutral contributions, reducing their tax liability whilst diverting federal funds that would otherwise support public services, including education.
The stakes are too high for educators, parents, and policymakers to ignore. The ECCA is not simply about providing “school choice”; it is a blueprint for privatisation that enriches wealthy donors and private interests at the expense of public schools. To combat this, advocates must oppose the ECCA and push for policies that strengthen public education, ensuring it remains a cornerstone of equity and democracy. Public schools are more than just institutions—they are vital community hubs where students of all backgrounds come together to learn, grow, and thrive. Preserving their integrity is essential to maintaining a society that values opportunity and fairness for all.
As the debate around the ECCA continues, it is crucial to remember what is truly at stake: the future of public education in America as a public good. Allowing corporate interests to dominate through tax-incentivised schemes undermines the very principles that make public schools a cornerstone of democracy. Now is the time to stand firmly in defence of a system that serves everyone, regardless of income, background, or citizenship, and to reject policies that prioritise profit over the public good.