Written by Sister Dale McDonald, PBVM, Ph.D., NCEA Vice President of Public Policy, McDonald@ncea.org
As the new Education Freedom Tax Credit program (EFTC) is discussed, debated, and attacked across the nation, it is interesting to observe how different groups seek to control the narrative about what the program is and isn’t, as well as about private schools. More than ever, supporters of our schools and the EFTC must be prepared to shape the national conversation by proactively presenting accurate information to counter myths and other misinformation that are influencing public perceptions of the EFTC and of Catholic schools.
The Education Freedom Tax Credit program has undergone several title changes over the past year. The earliest legislative proposals called it the Educational Choice for Children Act (ECCA), but Section 70411 of the bill that created it was simply titled Tax Credit For Contributions of Individuals to Scholarship Granting Organizations. As the U.S. Department of the Treasury began to develop the regulations, it was referred to as the Federal Scholarship Tax Credit program (FSTC), and then the administration decided it should be called the Education Freedom Tax Credit program (EFTC). However, despite the different titles and iterations, it remained the same legislation passed in July 2025—a tax credit program available to all individual taxpayers for a contribution to a scholarship-granting organization (SGO). The program never mentions vouchers or the U.S. Department of Education, but rather, focuses on many options that families can use scholarships for to improve students’ learning outcomes. All students whose family income does not exceed 300 percent of the local poverty level are to be treated equally by SGOs. Families may request scholarship aid for tutoring and curriculum materials, counseling and special needs services, transportation, technology, supplies, equipment, uniforms, and other things to support learning outcomes. Additional detailed information about the EFTC is available on the NCEA website: www.NCEA.org/publicpolicy.
Encountering false narratives about Catholic schools should be answered with data, not sentiment. NCEA’s annual data collection from all K-12 Catholic schools in the United States provides such information. Accordingly, of the 1,675 million students, Catholics comprise 71.8 percent of enrollment, non-Catholics 22.2 percent, and 6.8 percent are not reported. Schools are racially and economically diverse: Black 7.6 percent, Multiracial 7.7 percent, Hispanic 14.2 percent, and 3.9 percent are not reported. For the National School Lunch Program/Reduced Price Meals, 14.2 percent of students are eligible, and 10 percent of students served in 69 percent of the schools have a diagnosed disability. According to the most recent results on the National Assessment of Educational Progress (NAEP), Catholic school students outperformed public school counterparts by these scale scores: math 10-21; reading 16-20; and science 11-14. (National Center for Education Statistics, 2024).
Those are just some of the data that can counter the usual myths about Catholic schools and the EFTC program. EFTC is not a scheme to give rich families with kids in private schools more money at the expense of the poor. Catholic school data demonstrate the economic diversity in our schools, where nearly 20 percent of students receive some state or private scholarship funding, and it is not enough to cover total costs. Students in public schools will also have equal access to benefits that may accrue to their schools that participate in eligible programs.
Another false assumption is that EFTC will take money away from public schools or harm public school students. No funds under EFTC are ever public money that would be otherwise available for public school use. The scholarships result from charitable donations to SGOs, as do those IRS grants to Red Cross, Catholic Charities, etc. EFTC is not a plot to destroy public education—public education will benefit as well, and students can use scholarships to participate in public schools’ activities or even tuition to another out-of-district public school.
Some argue that scholarships will support schools that discriminate against students with disabilities or because of sexual orientation or gender identity. Catholic and other faith-based schools may hire for mission in accord with their religious beliefs, and that is not discrimination. The U.S. Supreme Court has upheld the right of religious organizations to claim a religious exemption to hire for mission and enforce policies that protect the religious tenets of the organization. This right has been affirmed in several Court decisions: Hosanna-Tabor, Trinity Lutheran, Espinoza v. Montana Department of Revenue, Our Lady of Guadalupe School v. Morrissey-Berru, Carson v. Makin.
Catholic schools have made significant strides in serving students with disabilities with very limited government aid. Due to low funding levels, only a few students actually receive services under the federal Individuals With Disabilities Education Act (IDEA), but most states do not offer any additional state assistance as they are required to do for public school students. Since Catholic and other private schools must use their own resources to provide additional services and programs, they can serve students with moderate, not extraordinary needs. Legally, civil rights laws are generally observed if their requirements do not conflict with mission or compromise the independence of the school. Because schools do not receive public support (federal financial assistance), their special needs students are to be offered reasonable accommodations that would not cause the school undue financial burden or require them to fundamentally alter the program.
As our Catholic schools and parishes work to implement EFTC programs, let them be mindful of all families, particularly those in religious education and other parish activities that may include students in public schools. This should be a community project to serve all students with opportunities to reach their potential. This effort should be designed to create greater parental awareness of opportunities and increase the likelihood of potential donors to local SGOs to have sufficient funding to meet all demands. Leveraging private donations to raise capital without corporate donors is a heavy lift. It will need more than the Catholic school community to be involved and work to obtain support from local citizens to inspire them to donate to school children rather than give it to the IRS.
