By Kimberley Heatherington, OSV News
(OSV News) — With the passage of President Donald J. Trump’s “One Big Beautiful Bill” — which the president signed into law at a White House ceremony July 4 — many Catholic educators and parents are celebrating: The approved version creates a new federal tax credit for individuals who make donations to 501(c)(3) public charities providing scholarships to elementary or secondary school pupils.
The creation of the new provision could lead to increased contributions to Catholic nonprofits that grant scholarships for K-12 students. Such contributions should in turn increase the number of scholarships that can be offered — and thereby, hopefully expand access to Catholic schools.
School choice advocates reacted by declaring the legislation’s passage “historic.”
But the Big Beautiful Bill will almost certainly lack universal adoption by individual states. It also limits donation levels, does not yet have an established spending cap and is unclear about religious liberty protections.
And the majority of Catholic K-12 kids, an estimated 8 out of 10, currently attend public schools, whose supporters have portrayed such tax incentives as “devastating.”
“There’s a lot of unknowns still,” Sister Dale McDonald, a member of the Sisters of the Presentation of the Blessed Virgin Mary and vice president of public policy at the National Catholic Educational Association, told OSV News. “It’s not like this is over, not by a long shot.”
“It’s a win, in that it’s starting something beyond just individual state programs,” she said. “And that, hopefully over the years, can be expanded to address some of the issues that we have.”
Sister Dale explained some of the intricacies in the provision enacted under the “Big Beautiful Bill” — and why despite the legislation, some people may not have access to it.
“It’s really not a national program, in that a state has to opt in,” she said. “That’s a big unknown right now — whether states will opt in or not, and giving states the ability to determine whether or not their schools can participate.”
Which means the NCEA will remain busy when it comes to school choice and educating advocates about provisions, benefits, and developing rules and regulations.
“That’s where we’re going to have to work with our state Catholic conference people who deal with a lot of state legislation, as well as, you know, our dioceses and our schools,” Sister Dale said.
The U.S. Treasury Department, she noted, will write the tax rules and applications related to the new code
Nevertheless, Sister Dale is hopeful that Catholic school enrollment will become more accessible.
The NCEA reports that Catholic schools are increasingly educating (and evangelizing) a diverse population: 23.1% of students belong to racial minorities; 19.3% are Hispanic; 22.0% are of other faiths; and 6.9% have special needs.
“We’re not able, unfortunately, to take every kid because of financial constraints,” Sister Dale admitted. “If we’re going to pay teachers a fair wage and benefits, and provide quality education, we have to have money — plain and simple.”
John M. DeJak, executive director of the Secretariat of Catholic Education at the U.S. Conference of Catholic Bishops, shared many of the NCEA’s concerns.
“I think the position of the bishops is positive and cautious — but more advocacy is needed,” DeJak told OSV News. “This is not a time to just sit back and say, ‘There’s been a partial victory here.’ But rather, we have to continue to educate the public and persuade our elected leaders to pursue this course.”
Portraying a future of mixed regulatory unknowns, he said, “It’s a positive step for federal recognition — some sort of opportunity at the federal level for school choice — and to give this opportunity to parents to be able to assist in sending their children to the school of their choosing.”
But again, religious liberty issues remain outstanding.
“There were some concerns — primarily, the removal of religious liberty protections,” DeJak said. “Concomitant with the upholding of parents’ right and obligation to direct the education of their children is also the freedom of the church to run its institutions and teach according to the dictates of our consciences, which is the fullness of the Catholic faith. So that removal — which was in previous iterations of the bill — is very much a concern of the bishops.”
As “Gravissimum Educationis,” the Second Vatican Council’s Declaration on Christian Education proclaimed by St. Paul VI in 1965, notes, “Since parents have given children their life, they are bound by the most serious obligation to educate their offspring and therefore must be recognized as the primary and principal educators.”
DeJak also lamented the bill’s lack of school choice universality.
“It could be universal. It could be a great opportunity for everybody. And in fact, we urge governors in all 50 states to provide this opportunity to their kids — especially their low-income kids, their low-income families — because this is a great opportunity for them” he said. “But certain governors, certain states, may elect not to participate. And so that too is — again, from previous versions of the bill — something that was kind of watered down.”
As to the objection that the legislation will harm public schools, which educate the majority of Catholic youth today, DeJak is skeptical.
“The school choice provision is a tax credit. It is not federal funds,” he said. “There are many ways to do school choice. There can be vouchers, which would be coming right out of the Treasury. There are different education savings accounts. This one is a tax credit — and therefore, it’s private funds, essentially.”
“Why would anyone deprive an opportunity to any student in any family who wishes to exercise their freedom in choosing a school? Why would someone stand in the way of that?” asked DeJak. “The only thing I could think of would be politics — some sort of ideological reason. And our hope is that whatever state you’re in — blue, red, purple — that people look at what this does for families, what this does for kids, and make the decision accordingly, so that parents and their children can choose the school that best fits them.”
When asked by OSV News if eventual outcomes of the legislation’s educational provisions are likely to be more aligned with the bishops’ wishes, DeJak was thoughtful.
“I think it is too early to tell,” he replied. “This is why it is incumbent on the USCCB — as well as state Catholic conferences and individual bishops, in their local dioceses and states — to advocate for good rule-making, for solid protections, for establishment of these scholarship granting organizations, so as to allow as many families as possible to participate.”
Shawn Peterson, president of Stillwater, Minnesota-based Catholic Education Partners, a national apostolate advancing policy to enable families to pursue a Catholic education, also cautioned against sitting on school choice laurels.
“Some of our partners have said, ‘Oh, we now have national school choice.’ No, we don’t really have national school choice. We have expanded school choice for mostly red states,” Peterson shared, making a reference to Republican-run states. “Because with the opt-in language, the governor gets to make that decision in most states. And we have 23 states that have governors that probably will not opt into this bill.”
Such figures put the victory in perspective.
“That’s about 53% of Americans who will actually not enjoy school choice yet,” he added. “And some very large Catholic populations — the archdioceses of New York, Los Angeles, Chicago — will likely not get to participate.”
Still, “for likely 27 states, this is going to be more school choice for their families. It’s going to be additional money to go to Catholic schools,” Peterson said. “But we have a long way to go before we have something called national school choice.”
Limitations on donation amounts will also impact the legislation’s success.
“When the amount got bumped down to $1,700 for a donor, that took a lot of money off the table,” he explained. “There’s a lot of generous Catholic philanthropists out there that would have been able to give a lot of money for the program as it was originally in the House and in the Senate. Now it’s different.”
Initially, Peterson said, “You could give 10% of what you owed on your adjusted gross income … for some of those big donors who have large tax bills, that could have been a $100,000 or $200,000 donation.”
The donation limit was perhaps in deference to public school systems, but Peterson views that stance as problematic.
“We shouldn’t be supporting a system of schools. We should be supporting whatever educational option is best for a child,” he argued. “I would say public education is about the education of the public. It’s not about a particular delivery system.”
Like the NCEA and the USCCB, Peterson said he knows their work on this legislation is not yet done.
“We have to be honest,” he said. “It’s just not the robust bill that we had thought it was going to be two weeks ago. This is going to take more time to implement.”
Kimberley Heatherington writes for OSV News from Virginia.
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