Create Equity in Private Education by Funding It With Direct Aid

The mechanism for funding private education through school choice programs is at a crossroads, thanks in part to US Supreme Court rulings that have permitted government funding of all private schools. States now have the opportunity to transition from traditional tuition tax credits to a more equitable system of direct aid for private education, including religious institutions.

Historically, tuition tax credits have been states’ primary method to support private education (if they want to), skillfully circumventing the constitutional dilemmas tied to directly funding religious schools. This model allowed taxpayers to convert state income taxes into donations for scholarship organizations, indirectly channeling public funds to private institutions. Tuition tax credits allow people to deduct from the taxes they have to pay the amount they gave.

Yet this system has proven to disproportionately favor wealthier demographics, sidelining schools that serve less affluent communities.

The Supreme Court’s decisions, particularly in cases such as Carson v. Makin, have clarified that direct aid to religious schools doesn’t breach the Establishment Clause when administered impartially. This significant shift dismantles the key legal barriers that once made tuition tax credits appealing and spotlights their inefficiencies and the inequality they perpetuate.

Tuition tax credits lack the oversight necessary to prevent fraud and misuse, and their structure inherently benefits those in higher-income brackets, leaving economically disadvantaged families without support. These credits also promote educational segregation. This allows private schools to focus on attracting donations from wealthier families, thus diverting resources from those who need them most.

The path forward is clear: direct funding. By adopting tuition vouchers or similar strategies, states can offer a fairer distribution of public funds, ensuring that all students can access quality private education regardless of finances.

Direct aid also offers the flexibility to prioritize support for students from lower-income families or those attending underperforming public schools—more closely aligning with the goals of educational equity and choice. By eliminating financial and administrative hurdles that restrict the scope of school choice programs, direct aid opens the door to private education for all students.

Some may argue that moving to direct aid produces legal and political obstacles, especially in states with historical preferences for tax credits. But two Supreme Court cases (Carson v. Makin and Kennedy v. Bremerton School District) and evident shortcomings of the tax credit system make a compelling argument for change. Lawmakers must act to ensure that school choice lives up to its promise of equitable, quality education for every student.

As the constitutional perspective shifts to favor direct funding across all types of schools—public, private, and parochial—the case for embracing direct aid as the preferred method of supporting private education strengthens.

By focusing on direct aid, states can ensure school choice programs are fair, effective, and aligned with the overarching goal of enhancing educational outcomes for all students.

The case is Carson v. Makin, U.S., 142 S. Ct. 1987, decision 6/21/22.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Michael Broyde is professor of law at Emory University.

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