Can the new federal voucher program help public schools? Democrats are torn
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Democrats and public school advocates have until the end of the year to make a tough decision: Whether to embrace a Republican program that might help some public-school families pay for things like tutoring and summer school – even if it will also pour taxpayer dollars into private schools.
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Colorado's Jared Polis was the first Democratic governor to opt in to the coming Federal Scholarship Tax Credit, a new program the Trump administration is calling "America's first nationwide school choice program."
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"An obvious decision," says Polis of his choice to embrace the policy that, with the help of a generous tax credit, could raise billions of dollars in taxpayer donations nationwide.
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"Of course I want Colorado kids to be the beneficiaries of that," Polis tells NPR. "I think many other governors would like kids in their state to be the beneficiaries of that."
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Many Republicans, yes. But his fellow Democrats aren't so sure.
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"That is never going to happen," Minnesota Gov. Tim Walz said earlier this year when asked if he would be opting his state into the program for 2027. "We are not doing it."
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In between Polis and Walz, between yes and no, 15 Democratic governors, as well as the mayor of Washington, D.C., remain undecided, according to a tracker by Ed Week. And the clock is ticking. To be able to participate next year, they have to opt in by Jan. 1.
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"This is really, really hard because the policy is designed to try to make these [political] wedges," says Jessica Levin, litigation director at Education Law Center, a nonprofit legal advocacy group that opposes private school vouchers.
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She says Democratic governors may feel they can't pass on this program "because they think, 'Oh, there is a benefit for public schools, and I'm going to get flack.'" But Levin, along with many of her fellow public school advocates, sees the program as a kind of Trojan horse.
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Billed as a boon to public schools, she says vouchers can lead some families to leave for private schools, which can then result in declines in public school funding. Beginning in January, qualifying taxpayers will be able to donate up to $1,700 to a scholarship-granting organization, or SGO.
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The SGO will then convert those donations into scholarships, also known as vouchers, to help families cover a wide range of education costs, including private school tuition as well as tutoring, summer school and even new computers. The government's end of the bargain is that, in exchange for making a scholarship donation, these qualifying donors will get every penny back come tax season: For every dollar they contribute to one of these SGOs, they will owe the IRS a dollar less in federal income tax up to $1,700.
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Put another way, if you're thinking of donating, "It's not your money.
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It's money that you would have sent to the IRS," says Marguerite Roza of Georgetown University's Edunomics Lab. More than 138 million people could qualify for the full tax credit, according to the Institute on Taxation and Economic Policy.
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Plus, given the generosity of the credit, the U.S. Treasury Department predicts it could raise nearly $26 billion in scholarship donations by 2030. For comparison, the largest source of federal education funding, known as Title I, sent more than $18 billion to schools in 2023 to help them serve low-income students.
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Of the 31 states that have signed on to the new program, most are led by Republicans.
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Just one Democratic governor has willingly joined Polis: Gov. Kathy Hochul of New York. In Kansas, Kentucky and North Carolina, top Democrats fought the program but were overridden by Republican legislatures. If a governor does not opt in, that state's taxpayers can still make donations to SGOs and receive the tax credit, but families in that state won't qualify for scholarships or vouchers to pay for educational expenses.
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Governors who have opted in for 2027 can also choose to opt out for 2028 or vice versa.
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Like many of the nation's Democratic governors, groups that have championed public education in Republican-led states now face a similarly uncomfortable choice: Continue to fight the scholarship program on principle or make a practical pivot, encouraging school districts and public school families to embrace the program so they can benefit from it.
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The Southern Education Foundation (SEF) – created in the aftermath of the Civil War to guarantee schooling to the children of formerly enslaved people – chose to pivot.
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"The question for me became less about whether I agreed with every aspect of the program, because I don't, and more about what happens now that the program is moving forward," Raymond C.
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Pierce, SEF's president and CEO, said in a press release.
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"We've always been an organization that has promoted public schools, and we oppose private school vouchers," says Fred Jones Jr., SEF's senior director of public policy and advocacy. Jones says foundation leaders fought "very hard" against the new program but decided to change their approach after most of the states where they operate opted in.
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The group is now launching an alliance of SGOs to focus specifically on raising funds for public school students.
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"If we have tutoring, if we have afterschool programming, if we get summer learning… I think a number of students in the public school system could be tremendously better off," Jones says. Deborah Gist felt the same way.
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"I am making sure that public school students benefit," she says.
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The former superintendent of Tulsa Public Schools, one of Oklahoma's largest districts, Gist recently founded Future School Fund, a national SGO focused on serving public school students. "I pulled up the bill language itself and saw right there that public schools were very explicitly included," Gist says.
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"So I immediately started wearing my public school educator hat.
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I immediately started thinking about all the kinds of things that we could fund." Even with help from organizations like SEF and Future School Fund, public schools in states that have opted-in will have a lot of catching-up to do. Many states already have state-level tax credits focused on helping families pay for private school, and very few of the SGOs that are already up and running are public school-oriented.
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In other words, Jessica Levin explains, private schools already have the SGOs, the infrastructure and the advertising budgets.
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That's one reason Levin, along with many other public school advocates, continues to push back against the tax credit.
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She predicts, "The vast majority of the money is going to be used on private school tuition and other private education expenses."
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Marguerite Roza says public schools hoping to benefit from the tax credit will now need to decide which of the services they provide might legally be reimbursed. "You can't charge a fee for math class," Roza says, or for much of what public schools do.
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At its most basic, the program allows families to use donations to pay for education services that they'd normally have to cover out of pocket.
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That's a challenge for public schools, since they are required to provide education free-of-charge — they can't start charging for traditional services just so they can receive donation dollars through the new tax credit.
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Private schools, on the other hand, can legally charge tuition, and the Republican program can easily be used to reimburse families for that cost. What can public schools charge for?
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Roza has some ideas. "A fee could cover field trips, assemblies, access to tutoring, access to aftercare, homework drop-in hours, end of the year parties."
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That doesn't sit right with Levin, though. She says, even if this kind of reimbursement is allowable under the law, "it's very wrong and very dangerous.
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Public schools don't charge for most of what they provide because that's the entire point of public education." The best way to support public schools, she says, "is to fund public schools. It is not to accept a privatization program that throws a few crumbs at public school students."
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When it comes to generating money for public schools, Roza agrees this new tax credit is "the most convoluted, circuitous way possible anybody could have ever laid out — and with all sorts of caveats in it." But, she says, it's also a real program that won't benefit districts unless they actively embrace it.
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For the tax credit to raise a meaningful amount of money for public school communities, Roza says, they will not only need to team up with public-school focused SGOs.
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They'll also need to convince local employers to include the option to donate as part of their regular payroll operations.
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School districts will want to fold it into their own payroll systems. "The money is not showing up automatically," Roza says. "Districts will have to play this game in order to get the money.
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And where districts shrug their shoulders and say, 'I'm not doing this, I'm not gonna participate,' then they're not going to get any." Even if some public school communities do everything right, and money pours in, an old problem is sure to surface: The schools that need the most help, may benefit the least. "It's the public schools that are in wealthy communities that have the most money locally that they can raise," says Jon Valant, senior fellow at the Brookings Institution and director of its Brown Center on Education Policy.
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"And if the patterns of giving for this program look like patterns of giving for other programs across the country, we expect that most people are going to give to [SGOs] that then give back to the schools in their communities."
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Valant and a team of Brookings researchers estimate that the wealthiest counties will generate roughly three times as much money through the program as the nation's poorest counties. And that means, for lower-income, rural communities to benefit, they'll have to rely on wealthy donors' willingness to give beyond their own communities.
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That's not likely, Valant says.
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What's more, the program is not limited to helping low-income families. A student can qualify for help as long as their household earns less than 300% of the gross median income in their area.
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That's roughly 95% of all students, according to the Treasury Department's own estimates.
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Valant says, "There are kids across the country whose families make a half-million dollars a year who are income-eligible." Given how disproportionately the program is likely to benefit wealthy communities, Valant warns, "there's a real chance that we end up seeing this program as Title I for rich kids." All of which makes the decision to opt in or out that much harder for hold-out Democrats.
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For Fred Jones Jr., of SEF, embracing the program was purely practical.
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He doesn't like it, and would advise those undecided Democratic governors to opt out.
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But, in the South, where SEF works, most states have opted in. It's real, like it or not. And Jones says, if there's no conscious effort in those states to raise funds for public school students, then it simply won't happen and most of the money will, indeed, go to private schools.
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