“President Trump’s big policy act on tax cuts, spending cuts and immigration also has a number of other key provisions that are getting less attention but include big changes.”
Why this is important: On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law. OBBBA includes an extension of the tax rates that President Trump signed into law during his first term, an increase in the child tax credit, an increase to the debt ceiling, and significant cuts to Medicaid, among other financial reforms. However, one of the lesser mentioned OBBBA provisions involves a dollar-for-dollar tax credit of up to $1,700 for individuals who donate to a nonprofit organization that offers education scholarships. These scholarships primarily assist students with tuition for private or religious education.
As more states have made a push for private over public education, the scholarship funds that these organizations will need on hand will also increase. As highlighted by this PBS News Hour transcript, in an interview with Laura Meckler of the Washington Post, she said that instead of relying on a few large donations, “[organizations] are going to have to get a lot of donations from a lot of donors in order to raise a substantial amount of money…” This tax credit, which predominantly benefits private schools, is another step in the Trump administration’s efforts to minimize the government’s activity in education. In March, President Trump signed an executive order to take steps to close the U.S. Department of Education (ED). In July, the Supreme Court granted a request from the Trump administration to lift an injunction that blocked layoffs at ED.
After the One Big Beautiful Bill passed both chambers of Congress, Senator Bill Cassidy of Louisiana said in a statement, “Parents should decide where their kids go to school. This bill helps them do that.” While Congress and the Trump administration are on board with the tax credit, many public education advocates are against it. In a statement, Becky Pringle, President of the National Education Association, called the tax credit “a moral disgrace[,]” adding that “Trump and congressional Republicans [had] undermined our public schools and every student in them.” It is unclear how much the tax credit will cost the federal government at this time. However, the nonpartisan Joint Committee on Taxation estimates the tax credit could result in nearly $26 billion in lost revenue over the next decade. --- Isaiah C. Robinson
How does the Final Reconciliation Bill Impact Higher Ed?
