School choice programs grow in popularity across U.S.

The program supports K-12 education expenses, including qualified elementary and secondary education expenses such as tuition and tutoring. The program will take effect Jan. 1, 2027.  

The U.S. Department of the Treasury clarified various rules and regulations for the tax credit, including that the $1,700 cap on donations is per individual, and married couples filing jointly may donate up to $3,400. 

Taxpayers can contribute to any qualified Scholarship Granting Organization, regardless of where they live. The government has stated that the program does not take money directly from state public-school budgets. Instead, taxpayers receive a federal tax credit for donating to an SGO.

Treasury officials and the Internal Revenue Service estimate the program could support nearly 700 SGOs and generate $26 billion in annual contributions from more than 11 million taxpayers by 2030.

Darla Romfo, president and CEO of Children's Scholarship Fund, an SGO participating in the tax credit program, said taxpayers who donate through the program can direct their support toward scholarships for students. 

Romfo said states that do not participate could see tax credit donations benefit students from other states. 

“All this money was raised from taxpayers in your state, and it got spent on kids all over the rest of the country and not on your kids, because you didn't opt in,” Romfo told The Center Square. “And it wouldn't have cost you anything to opt in, wouldn't have taken $1 away from a public school. It would just simply help the kids in your state. And that was money that left your state and could have helped your kids.”

“Shame on them, because it costs them nothing,” Romfo said of states that have declined to participate.

The federal program differs from traditional public education spending because the money is distributed through SGOs rather than state education departments. Parents apply for the scholarship, and if their kid gets awarded, the parent decides how the funds will be spent. 

Romfo said that could include school tuition or tutoring, among other things. 

“I think making parents aware and empowering them to make decisions about their children's education, that's where the real empowerment is,” Romfo told The Center Square. “At the end of the day, you have to change a whole way of thinking, a culture, and then if they are picking the things that work for their kid, that individual child's results will get better. And, you know, when you're trying to do it at a scale like this and you have thousands of parents all over the country picking the best educational option for their children, I think you will see things move.” 

Romfo also acknowledged that the SGOs will have to work a little more to connect with the local taxpayer that gets to be a philanthropist through this federal program. 

“I think for most people, it'll still move them that they get to be a philanthropist and that they get to help kids at a school,” Romfo told The Center Square.

Realizing that you can help your local community through these donations could be a way to encourage participation, she added.  

Ryan Cantrell, chief state strategy officer at the American Federation for Children, told The Center Square that school choice programs put education dollars in the hands of parents and make them the decision-makers.

“Our goal should be for them to get the best education possible so that they can get the best and be good taxpayers, be good stewards of that, and ultimately give back to our economy,” Cantrell told The Center Square. “So that is exactly what we see through these school choice programs at the state level and the federal program is just going to supercharge that possibility for a lot of families.” 

Aside from the federal tax credit, many states have implemented statewide vouchers and scholarship programs like Education Savings Accounts or traditional vouchers from state education budgets. 

As public education continues to cost taxpayers upward of a trillion dollars, student learning and test scores decline. Supporters of school choice believe that these programs will place more power in the parents to utilize funds that are directly catered to their children's educational needs with the goal of increasing student achievement. 

The average cost of a school choice scholarship is roughly $6,000 per student, compared with about $18,000 in average public-school spending, according to EdChoice. 

“This is not a partisan issue. It is a real opportunity to further empower parents in finding the best education for their children. Who doesn’t believe that parents should have that chance?” Arizona Superintendent of Public Instruction Tom Horne told The Center Square. 

Critics argue the federal tax credit program takes taxpayer money from public schools that don’t have enough resources.  

“This tax credit voucher scheme will rob our country’s public schools of the resources they need to educate the next generation. This program is designed to enrich private schools, which can still turn away students with disabilities, children who are LGBTQIA+, and those in low-income families, while leaving millions of public school children worse off than they are today,” Beatriz Beckford, national director for Youth and Family Justice at MomsRising, an organization of over a million mothers and families, said in a statement.  

“Every governor who recognizes the need for universal public education, and its importance to having a well-prepared workforce and a strong economy, should refuse to allow her or his state to participate,” Beckford added. 

National Education Association President Princess Moss also criticized the program, arguing that federal tax benefits for private education should instead be directed toward public schools.

“At a time when educators, students, and families are calling for more resources to strengthen neighborhood public schools, this administration is advancing a plan to divert taxpayer dollars to subsidize private education for a select few,” Moss said.

The Center Square contacted the NEA and other organizations that have opposed school choice, including the American Civil Liberties Union and NAACP, but did not receive responses.