The Education Savings Scam: How Black Taxpayers Are Funding 'The New Segregation'
ContrabandCamp examined how "school choice" laws divert tax dollars away from Black schools to fund "segregation academies," white churches and far-right publishers.
Separate but equal is still the law of the land in Wilcox County, Ala.
Every single one of the public schools in this rural Alabama county is failing — an ignominious feat in a state where most public school students don’t meet proficiency levels in math, reading, or science. But the 1,160 students enrolled in 99% Black Wilcox County Schools are not alone. The Alabama State Department of Education’s (ALSDE) index of failing schools lists at least one public institution from every majority-Black county in the state. To be fair, not every student in Wilcox County is doomed to receive an inferior education. For a mere $3,700 per year, a parent can enroll their children in Wilcox Academy, a private, 98% white segregation academy that didn’t enroll its first Black student until 2020.
According toThe Politics of White Rights, most of Alabama’s segregation academies were founded between 1965 and 1973, when Brown v. Board of Education forced white parents across the country — not just the South — to secede from public education. Some, like 91% white Trinity Presbyterian in majority-Black Montgomery County, were founded by churches that initially wanted to protect their white congregants from race-mixing. However, a 1972 congressional report on segregation academies notes that most of the melanin-deficient K-12 establishments like Faith Academy in Mobile and American Christian Academy in Tuscaloosa aren’t actually affiliated with a specific religious congregation. In those cases, the words “Christian,” “Church,” and “Faith” are synonyms for “white.”
Interestingly enough, the white schools that serve as monuments to Jim Crow aren’t necessarily better. Unlike other privileged private school graduates, students who attend little white schoolhouses don’t always get an elite education. While private schools generally have higher graduation rates and standardized test scores, segregation academies share the same struggles with funding, resources and performance as their public school counterparts. That’s why states like Alabama and South Carolina allow private school students to participate in sports and take advanced courses at the local school in their district.
“They’re essentially embezzling money from the public schools,” explained Kingstree High School’s Mark Fraiser. The longtime educator is currently the principal at a 95% Black school in a rural S.C. district where white students attend the local segregation academy. When asked about Wilcox County, he paused while doing a little math in his head.
“About 200 [white private school] students at about $14,000 per year? That’s about $2.8 million the public school isn’t receiving,” Fraiser concluded. “Now, ask [Wilcox County’s] superintendent if his schools would be failing if he had an extra $3 million.”
But, unlike Fraiser, legislators in Alabama — and at least 28 other states — came up with a different solution to save segregation academies and failing schools.
Steal money from Black people.
When ContrabandCamp pored through the publicly available data, we found the dirty little secret behind Alabama’s failing Black schools. But it’s not just Alabama. ContrabandCamp found at least nine states that were using public funds to revive flailing segregation academies. In every single case, we found that money disproportionately paid by Black taxpayers is being funneled to majority-white private schools, unaccredited “Christian” academies and companies that sell far-right ideology, Lost Cause mythology and pro-white “Christian” theology under the banner of “educational freedom” and “parental rights.”
And you’re paying for it.
Trickle Down Education
Since the U.S. Supreme Court’s 1954 decision declaring educational apartheid unconstitutional, states' rights advocates, Southern conservatives and people who worship blue-eyed Jesus have been on a 71-year quest to resegregate schools. They tried everything, including racist manifestos, massive resistance, spitting on Black first-grade girls and even attempted murder — all to no avail. As white supremacist violence became less fashionable, conservative thought leaders found a way to rebrand the pro-white movement.
They called it “school choice.”
While the school choice movement may sound more benign than “Make Segregation Great Again,” school choice is the brainchild of Milton Friedman, the Reagan administration economic adviser who gave us such hits as “trickle-down economics” and “the welfare state.” In his 1955 paper, “The Role of Government in Education,” Friedman introduced a free market education system based on an idea called “school vouchers.”
White supremacists loved it.
When Southern states immediately proposed Friedman’s plan as a way to “resegregate schools,” Friedman stood on business. Explaining that he opposed “forced segregation” and forced desegregation, the Nobel Prize-winning economist said his plan would allow states to “develop exclusively white schools, exclusively colored schools, and mixed schools. Parents can choose which to send their children to.” So when the Reagan administration began pushing school choice legislation, Black scholars raised the alarm.
“The new threat to the public school and Black education is the so-called ‘tuition tax credit’ and voucher plans now being considered by policy makers, educators and legislators,” wrote legendary educator and psychiatrist James P. Comer in the NAACP’s October 1981 issue of The Crisis. “On the surface, the plans appear reasonable enough, even a godsend to parents who are sending their children to Catholic or private schools and at the same time paying taxes to support public schools … But quality education for all Black youngsters is the key to the Black American future.”
President Bill Clinton vetoed a Republican bill to give private school parents $3 billion in tax breaks, yet Republicans persisted. George W. Bush’s No Child Left Behind nationalized the school choice movement by including funding for vouchers and charter schools and tax credits for private schools. On the state level, Southern legislatures took up the school choice mantle, funding charter schools and giving tax breaks for private tuition closer to fulfilling the conservative dream of a privatized education system. Then, in 2022, the Supreme Court decided that the free exercise clause of the First Amendment “protects sectarian” schools. The Court’s 6-3 decision in Carson v. Makin didn’t just open the door for “Christian” segregation academies; it was the fulfillment of every segregationist’s fantasy and the main character in Milton Friedman’s wet dreams. If “separate but equal” had a baby with “school choice” and sent the baby to Alabama’s Hogwarts for White Supremacist Wizards, the segregationists in hell’s whites-only neighborhood would throw a baby shower for the child whose forefathers include Strom Thurmond, George Wallace and the “grandfather of school vouchers.”
The Education Savings Account
Unlike vouchers, tuition tax credits or education deductions, an ESA is actual money. Essentially, the government uses state public education dollars to bankroll individual, government-authorized savings accounts. The parents can use the money to pay for tuition, tutoring, online education programs, textbooks and resources for special needs students. While most public schools receive funding based on the number of students enrolled, ESAs give the money to parents, allowing them to use public funds for private schools and homeschooling.
While that may sound harmless, it’s not. Until the still-fledgling alchemy industrial complex finds a way to turn white supremacy into gold, states with ESAs use taxpayer dollars to fund the accounts. In a country where schools in majority-Black districts receive about $1,000 less per student than majority white districts, this policy increases that disparity under the guise of “school choice.” Not only does it siphon money away from the already-tight public school budgets, but it also hands taxpayer dollars to the people who need it the least — parents who were economically secure or racist enough to voluntarily opt out of public education. And, according to EdChoice (or as it was originally known, the Milton and Rose D. Friedman Foundation for Educational Choice), at least 23 states have laws authorizing some form of education savings accounts.
Here is the map of education savings accounts
It looks eerily similar to a map of segregation pre-Brown v. Board of Education:
It’s probably just a coincidence that segregation states and ESA states just happen to contain the vast majority of America’s Black population:
And nowhere is this theft more evident than in the heart of Dixie, the great state of Alabama.
Alabama’s New Jim Crow
Alabama is 27% Black and 69% white. In March 2025, Alabama's Black unemployment rate was 6.2% while the white unemployment rate was 3.7%, according to the Alabama Department of Labor, so most Alabamians pay taxes regardless of color. However when ContrabandCamp analyzed the data, we found that Black children in Alabama were 14 times more likely to attend a school with a D or F rating.
Take Lowndes County, for instance. Known for its part in the Black Panther Party’s origin story, the county is 72% Black and 26% white. Like every single county in Alabama’s Black Belt, the rural district has at least one school on the list of failing schools. Instead of sending kids to the failing 95% Black Calhoun High or Central High, which is 99% Black with zero white students, white parents in the majority-Black Lowndes County enroll their children at the 95% white Lowndes Academy. While Bessemer City is 70% Black and 19% white, only 8 of the 805 students at Bessemer City High are white. Since 1972, white parents had been enrolling their children in all-white Bessemer Academy. So, when the state announced it was taking over the underfunded Bessemer City Schools, it was just another problem with “Black schools.”
To address the problem, in 2024, Alabama’s Republican-controlled state legislature passed the Creating Hope and Opportunity for Our Students’ Education (CHOOSE) Act. The bill takes $100 million from the state education fund to give families up to $7,000 to use on private school tuition. While Gov. Kay Ivey and white Republican senators lauded the legislation, the Black members (In Alabama, literally all Democratic legislators are Black, while the entire Republican caucus is white) saw through the white smoke.
“This is the new segregation,” said Democratic Senate Minority Leader Bobby Singleton. “We’re just paying for it this time. Paying for it on the backs of poor children.”
Why did he have to make this a racial issue?
Well, there’s a reason why Alabama’s K-12 institutions are ranked 49th out of 50 states (52 if you graduated from Alabama public schools). According to ProPublica, Alabama’s private schools are disproportionately white, while white students are underrepresented in the public school system. For Black children, the opposite is true. That’s why, year in and year out, the state is ranked near the bottom of per-student spending in whole dollars and as a share of taxpayers' income. .
Simply put, white Republicans refuse to spend money on Black children.
AL.com’s Education Lab reports that only about a third of the 36,873 students who applied for CHOOSE Act ESAs attend Alabama public schools, while two-thirds attend private school or receive their education via homeschooling. The applicants are 59% white, a slightly higher percentage than the 57% white Alabama public education system. And because of Alabama’s previously passed school choice laws, about 90% of the applicants already attend a school outside their district. Encouraging this exodus to white schools will increase the coffers of white private schools and doom already-struggling majority-Black districts to failure.
And that’s not even the most concerning part.
When ContrabandCamp compared the schools that are certified to use CHOOSE ACT funds with our list of 71 segregation academies still operating in the state, 69 were already certified to receive public funds. The Education Service Providers who will receive state money for textbooks and learning resources vendors include Veritas Press, which sells pro-Confederate Lost Cause propaganda for school-age children.
Homeschoolers can use those tax dollars to purchase lessons from Apologia, whose homeschool curriculum rescues children from schools “full of pornographic books, CRT, gender ideology, sexual immorality, and much more.” If that’s too much, maybe you should contact the nearly all-white staff for Christian vendor Memoria Press, the textbook author and instructor who said this about Trump voters:
These people are not racist. They’ve got too many other issues to deal with that really matter. Under normal circumstances, white people just don’t think very much about race. They have always been the default ethnic group, so they’ve never had to think about race. But they are now surrounded by a culture obsessed with both race and gender. And they are regularly lectured by the liberal elites who just got spanked at the polls that they should think about it all the time.
Black Lives Matter, but your little White honky life is politically meaningless. Go help your children finish their Black History Month coloring assignment from school and shut up. And don’t even think about touching that Peach crayon. If your finger even touches anything lighter than Burnt Sienna we’ll cut it off.
If that’s not racist enough, fret not, more bigots are signing up for the scam as we speak.
Until then, you can always sign up to send your kid to a majority Black school. Although Black people make up 29% of the population in the nine states we reviewed (Alabama, Arkansas, Georgia, Florida, Iowa, Louisiana, Mississippi, Tennessee and Utah) 88% of the schools slated to receive taxpayer funds were majority white. And remember when I said we’re all paying? That wasn’t figurative.
To encourage states to spend more on education, the Department of Education’s Title I Education Finance Incentive Grant disburses money to schools based on a state’s spending per student. States that spend more per student in high-poverty districts get more federal tax dollars. But because many private schools and segregation academies are in high-poverty districts where whites have opted out, ESA states are technically spending more money in these districts, but they have simply found a way to give it to white people who don’t need it. In exchange, the federal government is giving the states more of everyone’s money to do it.
It’s the whitest scam ever.
Students at Lowndes Academy can apply for double their tuition to attend a segregation academy, while the public schools will receive less money. The white people at Lowndes Academy can essentially send their children to school for free, while one of the two struggling county high schools might have to close its doors because of a lack of funding.
To be fair, this is not all white people’s fault. Just because 80% of teachers are white, why should we blame the teachers? Is it their fault that 72.4% of Black kids attend a high-poverty school, compared to 31.3% of white students? If Black people focused on education and hard work, we could overcome the white people who control the state legislatures, the education systems, the curricula, the school funding sources and the classrooms. We need to pull ourselves up by our bootstraps and overcome a century of segregation, underfunding miseducation and inequality. After all, if you look at the list of failing schools, you’d understand why white people send their kids to segregation academies. Can you blame them for stealing Black taxpayers’ money? It’s not like we were using it.
“What parent wants to send their kids to an underfunded school?” Fraiser asked ContrabandCamp. “When your children aren’t enrolled in local schools, you’re kind of disconnected from your community. Private school parents are less likely to vote for increased education funding, because it doesn’t benefit them personally. The problem is not just Black vs. white or private vs. public. It’s really about people not caring about the people in their community who don’t look like them.”
He’s right.
Maybe it’s their culture.
Those maps tell the entire story! Admittedly, I find myself conflicted. I acknowledge that "school choice"/private & charter rising demand and popularity are just modern forms of segregation, but given the environment, I do not want to send my child to the local public school. I recognize that the disparities we see in education stem directly from white bigotry, but I also see the value in the additional resources and opportunities that a child can benefit from by not attending an underfunded school. This creates the public school doom loop with white flight, followed by black upper-middle-class flight, which leads to qualified teacher flight and then creates an environment where the most marginalized children are left to deal with the dismal state of the public school.
I attended an underfunded school in middle school. When a new school was built the county rezoned the districts, which I'm sure was just a coincdence that the Title I school was around 90% black and the brand new school was majority white. I'm sure! I struggled in that environment and my parents decided to send me to what was effectively a segregation academy. Outside of the emotional trauma of being a minority in an environment that doesn't value your community, I benefitted from the change.
Today in the ATL area there are high achieving majority black charter schools that my wife and I are interested in for our kids. We know that charter schools are not a solution and only excaberate the issues that will mostly impact our community, but I do not know what the solution is on the individual level.
This is becoming increasingly clear in North Carolina, where the local education defunders have gone so far to steal a state legislature seat.