Bill · S. 370· Senate(119-S-370)
Education Freedom Scholarships and Opportunity Act
- Introduced
- 2/3/2025
- Last activity
- 2/3/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Ted Cruz
- Cosponsors
- - 1 - 0
- Introduced
- In Committee
What this bill would do
The Education Freedom Scholarships and Opportunity Act aims to amend the Internal Revenue Code of 1986. It establishes new tax credits for individuals and domestic corporations who contribute to scholarships. These contributions can be made to eligible scholarship-granting organizations or eligible workforce training organizations. The bill provides specific guidelines for what qualifies as an educational expense and how organizations must operate. Additionally, the Act mandates the creation of a web portal to manage these contributions and track eligible entities. There is a national cap set on the total amount of these tax credits available each year.
Yes· 3 of 15
Does this make it easier to use public money at a school other than the local one?+7
The bill establishes tax credits for scholarships that can be used at various private and religious education providers.
Would students be better off under this?+6
The bill creates new avenues for students to receive scholarships for various educational levels.
Would children be better off under this?+5
The bill facilitates scholarships for elementary and secondary students.
The opposite
Does this reduce what the federal government spends?-2
The bill utilizes tax credits which reduces direct federal tax revenue.
Does this raise the taxes companies pay?-1
The bill provides a tax credit for corporations rather than increasing their tax burden.
Does this cut taxes for small businesses?-1
The bill does not specifically target small business tax reductions but offers general corporate credits.
Who it would affect, and how
Potential Positive Impacts for People
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Tax Credits for Individuals: Individual taxpayers can receive a credit against their tax liability for cash contributions made to eligible organizations, capped at 10 percent of their adjusted gross income (Section 102(a)).
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Tax Credits for Corporations: Domestic corporations can receive a tax credit for qualified contributions, capped at 5 percent of their taxable income (Section 102(b)).
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Support for Student Education: The bill allows for qualified expenses related to elementary or secondary education, as well as technical education and career components (Section 102(c)(2)).
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Support for Workforce Development: Credits can be used for scholarships intended for secondary or postsecondary vocational education, workforce development, or apprenticeship training, including costs for certificates and credentials (Section 102(c)(2)(C)).
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Tax Neutrality for Students: Scholarships received through this program are not treated as income for the student or their parents for federal tax purposes or for determining eligibility for other federal programs (Section 102(d)(2)).
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Protection of Educational Choice: The Act specifies that no federal control shall be authorized over private, religious, or home education providers, and states cannot disfavor the use of scholarships for services provided by faith-sbased providers (Section 102(d)(3) and 102(d)(4)).
Potential Negative Impacts for People
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Limits on Tax Credits: The credit for individuals is limited to 10 percent of adjusted gross income (Section 102(a)(b)), and the credit for corporations is limited to 5 percent of taxable income (Section 102(b)).
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National Funding Cap: There is a total national cap of $10,000,000,000 on the sum of contributions that qualify for these credits, split equally between scholarship organizations and workforce training organizations (Section 201(c)(1)).
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Restrictions on Credit Usage: Taxpayers are prohibited from selling or transferring any portion of the tax credits allowed under this Act (Section 102(e)(2)).
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Requirement for Tax Liability: The tax credit cannot exceed the taxpayer's Federal income tax liability for the taxable year (Section 102(e)(1)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Students+6Good For Children+5Good For Young Adults+4Good For Low Income Households+3Good For Native Americans+3Good For Business Owners+2Good For Middle Class Households+2Good For Union Workers+2
- Education And Technology
- Improves School Choice+7Improves College Affordability+4
- Social Issues And Justice
- Improves Religious Freedom+5Improves Childcare Affordability+2
- Governance And Ideology
- Improves Government Transparency+3
- Economy And Finance
- Reduces Middle Class Taxes+3Increases Job Creation+2Reduces Government Spending-2Increases Corporate Taxes-1Reduces Small Business Taxes-1
- 2/3/2025
- Read twice and referred to the Committee on Finance.
- 1 Cosponsor added.
- Introduced in Senate
James LankfordRepublican · Oklahoma