Stein should unambiguously reject Trump’s voucher scheme

Last year, President Trump’s “One Big Beautiful Bill” Act created a new federal school voucher program to advance his agenda of dismantling public schools. The program, which is set to begin in 2027, will allow wealthy taxpayers to receive tax credits of up to $1,700 per year by donating to scholarship granting organizations (SGOs) that pass out school vouchers.  

To be eligible to receive a voucher, families must meet the program’s income requirements, which vary based on geography. In Raleigh, families earning up to $400,000 per year would be eligible to receive these vouchers for private school tuition and other vaguely-defined educational expenses.  

Fortunately, states aren’t forced to participate in this program. States must opt into the program. Governors from Oregon, Wisconsin, and New Mexico have stated that their states will not participate. 

Unfortunately, Governor Stein has expressed an openness to participating. In vetoing the General Assembly’s efforts to force North Carolina into participating in this program, Stein emphasized his hope that the Trump administration might allow the program to be used to benefit public school students: “I see opportunities for the federal scholarship donation tax credit program to benefit North Carolina’s public school kids. Once the federal government issues sound guidance, I intend to opt North Carolina in so we can invest in the public school students most in need of after school programs, tutoring, and other resources.” 

“Sound guidance” allowing public school students to receive vouchers under this program is unlikely to arrive. The Trump administration has shown no interest in supporting public school students. But even if sound guidance does arrive, Stein should still opt North Carolina out of the program. 

There is a misconception that the funds flowing to SGOs would constitute “free money” that could be deployed to help students who need it the most. That argument ignores the many costs that accompany participation in the federal voucher scheme. 

First, the state would need to provide oversight of SGOs to minimize the fraud and abuse endemic to voucher programs. Currently, North Carolina spends $18.6 million to administer and oversee its two voucher programs. Even with this high level of administrative spending, there’s little financial oversight. There have been at least 43 instances where private schools received more vouchers than they had self-reported students, an indication that some private schools may be using “ghost students” to defraud taxpayers. Additionally, the state only verifies the incomes of four percent of applicants, leaving the door wide open for families to claim bigger vouchers than they are due. 

Without state oversight, the avenues for fraud under the federal voucher program could be blown wide open. Under the federal program, there would be a network of private, nonprofit SGOs accepting donations and distributing vouchers to North Carolina families. Initial, draft program rules would require the state to approve all eligible SGOs, a low bar that would authorize almost any nonprofit that wants to participate. Participating SGOs are allowed to keep 10 percent of donated funds for “administrative costs,” making participation potentially lucrative. 

Presumably, the “sound guidance” that Governor Stein is seeking would include authority to make sure that these SGOs are in fact providing vouchers to actual students who meet program eligibility requirements, and that funds are used for actual educational expenses. We know from studies of existing voucher programs that, absent state oversight, SGOs could participate in self-dealing and the funding of ghost students, and parents could misspend the funds on purchases unrelated to education. 

Stein must also consider additional voucher-related costs: widening economic inequality, declining academic outcomes, and increasing school segregation.  

Our analysis shows the vast majority of federal voucher funding is awarded to disproportionately wealthy families who have already enrolled their children in private schools. In North Carolina’s largest voucher program, 85 percent of new funding has gone to such families, worsening the divides between wealthy and working-class North Carolinians. 

For families swapping their public school for a private one, the state will have to manage the costs of those children receiving a subpar education. Studies of voucher programs in Washington, DC Indiana, Louisiana, and Ohio found that voucher students perform far worse academically than their peers who remain in traditional, inclusive local public schools. Many of these poorly served students return to the public school system where they then require additional resources to compensate for the inferior education they received in private school. 

Additionally, voucher programs divide students. At a time when our democracy and economy require a renewed dedication to learning how to successfully interact with people from diverse backgrounds, voucher programs entrench division. In North Carolina, 75 percent of voucher students are white, compared to 42 percent of public school students. Students attending less diverse schools are more likely to develop negative views of other racial groups and less likely to live in integrated neighborhoods as adults. 

The costs of a federal voucher program would undoubtedly expand in future years. One hallmark of voucher programs across the country is that they begin on a limited basis and then quickly expand once they gain a foothold. North Carolina’s main voucher program was introduced as a small, $11 million program tightly targeted towards families with low incomes looking to leave public schools. Now, it’s a $655 million program open to millionaires who have already enrolled their children in exclusive private schools. If the Trump administration has its way, the program will likely evolve in ways that are harmful for public school students. 

Alternatively, what happens in future years if the federal government revokes funding for the program? In that scenario, state leaders would face intense pressure to provide state funding so that no student loses their voucher. 

Stein must also consider the political costs of expanding voucher programs. The federal voucher program is the centerpiece of President Trump’s education agenda. Rejecting the program helps throw sand in the gears of an authoritarian and fascistic administration that is openly hostile to public education.  

Opting in, on the other hand, gives the current administration a win, while flying in the face of public opinion. According to a May 2023 poll from the Center for Racial Equity in Education, just 33 percent of North Carolinians support vouchers. Voters have rejected vouchers each of the 17 times states have put vouchers to a referendum, even in deeply red states like Nebraska and Kentucky. Voters correctly recognize that vouchers are just a tool to divide us and put more money into the pockets of the wealthy. 

By unambiguously rejecting the federal voucher program now, Stein can shift the education debate back to where it belongs: securing full funding for the constitutionally mandated Leandro Plan. The tutoring and after school programs that Stein wants would become readily affordable if schools finally receive the 40 percent state funding increase mandated by the Supreme Court. Under Leandro, such programs could be provided for all students, not just those whose parents apply for a voucher.