Richard Rubin, New Tax Break for Private-School Scholarships Sets Off Power Struggle (Wall Street Journal, Feb. 4, 2026)

WASHINGTON—A new federal school-choice tax credit is poised to funnel billions of dollars to scholarships for students attending private and parochial schools. The big question now: Who gets to set the rules and control where the money goes?

Congress created the tax credit in last year’s major fiscal law, starting a national version of programs that have proliferated in states. Beginning next year, taxpayers who donate to a scholarship-granting organization can get up to $1,700 back in a dollar-for-dollar federal tax credit. Effectively, people can direct $1,700 of their income taxes to scholarships instead of the U.S. Treasury. 

In states that opt into the national program, scholarship groups will provide money to students whose families have incomes up to three times their area’s median. The program is projected to generate more than $3 billion annually, which isn’t much compared with total education spending. But it is a significant shift in how the federal government participates in K-12 education. And for many families, the scholarships could be large enough to change enrollment decisions.

As the Treasury Department writes rules, the federal money is prompting a lobbying battle over how much control states should have. The fight pits advocates focused on public schools against the school-choice movement that has won support in the Trump administration and among Republicans such as Sen. Ted Cruz of Texas….