Ted Cruz’s Tax Break Boosts Private School Scholarships

Two months after Texas lawmakers approved a private school voucher program, U.S. Sen. Ted Cruz is advocating for a new federal tax break to boost private school scholarship funding. A provision in President Donald Trump’s tax bill, crafted by Cruz, offers tax credits up to $1,700 for donations to nonprofits providing private school scholarships. Cruz stated the goal is to assist families who typically cannot afford private tuition.

READ MORE: Why most Texas vouchers could go to homeschoolers, not private schools

“The result will be billions of dollars flowing into scholarship-granting organizations, awarding scholarships to low-income kids in Texas and across the country,” Cruz said in an interview with the Texas Take Podcast.

The scholarships can cover tuition, fees, tutoring, supplies, transportation, room and board, and computer equipment. States will establish rules for scholarship organizations, ensuring they support multiple students and schools, allocate at least 90% of proceeds to students, and undergo regular audits.

This program supplements Texas’ new voucher funding, set to take effect next year, which provides parents with around $10,000 for private school expenses. Gov. Greg Abbott praised Cruz’s measure, stating, "It compliments what we did in Texas. It will mean even more opportunities for more families."

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Cruz’s provision takes effect in 2027, with program rules to be finalized by the U.S. Treasury Department. The nonpartisan Joint Committee on Taxation estimates the program could cost the federal government $3 billion to $4 billion annually in diverted taxes.

Public school advocates, like Randi Weingarten of the American Federation of Teachers, argue the measure diverts funds from public schools. “It will siphon money away from public schools through vouchers — which harm student achievement and go mostly to well-off families with kids already in private schools,” Weingarten said.

Critics warn Texas’ voucher program may primarily benefit families already attending private schools, as tuition and transportation costs often exceed $10,000. Cruz countered that his legislation aims to help lower-income families access private education, though eligibility extends to families earning up to 300% of an area’s median income—potentially over $200,000 in Houston.

“It’s all about the single mom in the Third Ward or the Fifth Ward that’s struggling and loves her kids,” Cruz said. “They want a better life for their kids.”

The provision allows nonprofit scholarship organizations in any participating state. Cruz views this as a legacy issue, emphasizing his long-standing focus on "school choice." He asserted, “I have been legislating and winning legislative victories from my very first year in office.”

Cruz faced resistance from Senate Republicans to include the provision in Trump’s omnibus package, threatening, “I will burn the whole thing down” if it was removed.