Treasury Secretary Scott Bessent unveiled two major education initiatives Friday at the Power of Innovation Summit, positioning school choice and long-term savings as central pillars of President Donald Trump’s economic agenda.
Bessent said education is “economic infrastructure” and cited a series of troubling performance indicators: math scores for 13-year-olds saw the largest decline in the test’s 50-year history, reading scores for nine-year-olds fell sharply, only one in five high school juniors meets college-readiness benchmarks, and chronic absenteeism has nearly doubled nationwide.
“It’s not America’s students who are failing; it’s the system that serves them,” Bessent said.
The Treasury Secretary blamed entrenched incentives and what he described as a “government-protected monopoly” in public education. He argued that COVID exposed structural weaknesses when powerful teachers’ unions kept students out of classrooms “for more than a year” in some states. If pandemic learning losses persist, Bessent warned the U.S. economy could forfeit up to $31 trillion in productivity this century.
$1,700 Federal Tax Credit for K-12 Scholarships
Bessent highlighted a key provision of the One Big Beautiful Bill: a new $1,700 federal tax credit for contributions to Scholarship Granting Organizations — the first federal tax credit to directly support private K-12 scholarship donations.
The administration says the policy will increase the supply of scholarships, expand competition among schools, and give families meaningful alternatives to their assigned public schools.
“Thanks to this policy, a talented student growing up in a struggling neighborhood will no longer be trapped in a school that cannot meet his potential,” Bessent said.
Treasury is finalizing guidance to ensure families and donors can use the credit as soon as possible.
Trump Accounts: Building Financial Literacy and Long-Term Wealth
The second initiative, Trump Accounts, provides every eligible newborn with a $1,000 Treasury-funded deposit invested immediately in an index fund. Beginning July 4, 2026, family members, employers, and others may contribute up to $5,000 per year.
Even without additional contributions, the initial $1,000 could grow to nearly $500,000 by age 60 at median market returns and more than $1 million in favorable markets.
Bessent said the accounts will serve as hands-on financial literacy tools at a time when “approximately two-thirds of Gen Z” cannot answer half the questions on a national financial literacy index.
Recipients gain access at age 18, when Trump Accounts function like IRAs. Funds can be used for retirement savings or for education at a college or vocational school.
A Stake in Capitalism
Trump Accounts also aim to counter rising interest in socialism among younger voters. According to the Treasury Secretary, more than half of young Americans hold a favorable view of socialism, a trend he attributes partly to limited access to capital and high costs of entry into the housing market.
“President Trump wants every American on every rung of the economic ladder to have a share in the nation’s wealth,” Bessent said.
A Broader Push to Rebuild American Education
Bessent closed by urging innovators to support a generational effort to overhaul U.S. education through market principles, school choice, and universal asset ownership.
“Our goal is to transform the U.S. education system into an engine of economic dynamism,” he said.
