A Voucher by Any Other Name: Dems Roast DeVos on Tax Credits

Education Secretary Betsy DeVos speaks during a March 26 meeting of the House Appropriations subcommittee on Capitol Hill in Washington. (AP Photo/Andrew Harnik)

WASHINGTON (CN) – A wedge between Democrats and Education Secretary Betsy DeVos was driven ever deeper Wednesday as the secretary lauded a dollar-for-dollar tax program that opponents warn could divert critical funding from public schools to private or religious institutions.

Known as Education Freedom Scholarships, the program on its face allows individuals or entities to donate money to nonprofits that give scholarships to students who may not otherwise have access to education in a private, charter or religious school setting.

The program ensures “school choice,” DeVos said Wednesday, testifying before the House Committee on Education and Labor.

Denying that the program would draw on public taxpayer funds to match donations, DeVos insisted that the proposal is similar to over a dozen state-administered tax credit scholarship programs.

Critical to this claim is that the program would be backed by a tax expenditure in the budget of the Treasury Department. The Education Department’s budget for 2020 makes no mention of the $5 billion allotted for the program. 

Representative Marcia Fudge, an Ohio Democrat, explained Wednesday, however, that more than a fleeting glance reveals the proposal to be a “shell game” for private and religious schools, and a way for DeVos to push “school vouchers by any other name.”

“If you give a one-to-one tax credit it creates a $5 billion hole in the Treasury that could be spent on education, so indeed, this does hurt [public school] students,” Fudge said.

The proposal also comes at the same time the Education Department has proposed slashing its budget by $8.8 billion or 12.5%.

Those reductions include funding allocated for class-size management programs, support for teachers, supplies, technology, maintenance and much more.

“This [proposal] is nothing more than another attempt to disinvest in public education,” Fudge said.

DeVos disagreed with Fudge’s assessment yet didn’t clarify the nuances of the program. Instead, the secretary emphasized the popularity of charter schools and the importance of giving students the “freedom” to choose their path to education.

Charter schools have been a cornerstone of DeVos’ platform at the department, and for 2020 the secretary has requested $60 million in funding for charter school programs.

Representative Raul Grijalva noted, however, that a privately owned school demands strict oversight – especially if they receive state or federal dollars.

An Arizona Democrat, Grijalva expressed dismay at the secretary’s push for private school funding in light of glaring failures he says he’s seen in his own state alone.

BASIS Charter Schools Inc., based in Tuscon, Arizona, posted $44 million in debt this year.

“This is a significant waste of taxpayer dollars,” Grijalva said. “What kind of oversight is being done to make sure that these things do not continue to occur?”

DeVos answered that charter schools are authorized by the states where they reside, and the department “clearly has oversight pieces.”

But some schools just simply won’t succeed or stay open.

“If they can’t serve students, well, they shouldn’t exist,” DeVos said. “The same should be true of traditional public schools if they can’t operate well.”

The secretary’s response did little to soothe Democrats on the committee who continued to press DeVos for answers on the department’s failure to respond to multiple congressional inquiries.

Since 2017, the department has failed to formally answer questions about new requirements imposed under programs like the Every Student Succeeds Act. It also has not answered more recent questions about the department’s borrower-defense rules, nor has it disclosed information about the department’s decision to rescind Obama-era guidance on racial disparities in school discipline and seclusion.

Representative Joe Courtney meanwhile took issue with what he called the department’s “unilateral” decision-making.

According to a report by the Education Department’s Office of the Inspector General, 61% of all loan servicers are not in compliance with federal rules.

Even something as simple as recording payments from student borrowers on their account so their credit history is not negatively impacted is not happening in most cases, Courtney lamented.

“And last December, without a public hearing or public notice, you barred loan servicers from releasing information to federal investigators tasked by the Consumer Protection Bureau to review this,” Courtney said.

State law enforcement have had significant success in getting restitution for borrowers who were defrauded or saw funds misappropriated, Courtney said.

He called the access bar from last year unprecedented and said at least 20 Democratic attorneys general agree.

Last week, attorneys general from 20 states and the District of Columbia sent a letter to DeVos asking her to reverse limitations imposed on the Education Department’s routine disclosure of student loan information to law-enforcement agencies.

DeVos defended the decision Wednesday, saying that “federal student aid is a federal program,” and that to involve “every single state in oversight” exceed the department’s capacity.

Courtney reminded the secretary that months ago he requested a response within 10 days to the department’s December notice.

“But we’ve seen nothing,” Courtney sad.

DeVos did not offer to respond by a certain time frame. Instead, she only vowed take the department’s “responsibilities to student borrowers very seriously.”

The secretary was also cagey when it came to questions about increasing teacher salaries. Representative Grijalva has seen multiple teacher wage strikes in his state and described most teachers as “grossly underpaid.”

Asked by Grijalva whether she believed the federal government should supplement teacher incomes – not supplant them – the secretary instead pointed to items in the budget proposal, like the Education Innovation Research Program, which she said would help teachers “control their own professional development.”

The pilot program essentially creates vouchers for teachers to use and pursue professional development, thereby allowing them to earn more later, DeVos explained.

Republicans on the committee lauded the program but Democrats seemed skeptical.

“Our budget … elevates the profession and honors them and respects them and gives them an opportunity to control their own destinies through voucher, mentorship and residency programs,” DeVos said.

Grijalva was not convinced.

“You say you respect teachers, but how does your respect translate into paying them more? I guess that is a question for another day,” he said.

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