Dive Brief:
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Nine in 10 students are eligible for the federal Education Freedom Tax Credit, the nation's first and sweeping school choice program that goes into effect at the start of 2027, according to a Tuesday report released by the American Federation for Children.
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That means 51.7 million out of 56.4 million public and private school students are eligible. So far, 30.9 million, or nearly 60% of the nation's eligible student population, resides in a state that has opted into the program.
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Thirty-one states have formally opted in or announced their intent to, while 19 states and the District of Columbia — collectively home to 20.8 million additional eligible students — have not yet decided whether they will participate in the program. Eligibility is near-universal, with the District of Columbia having the lowest rate at 86% and Maine having the highest, at 96%.
Dive Insight:
The first federal private school choice program was approved through the Republicans' One Big, Beautiful Bill Act. The Internal Revenue Service said it intends the scholarships to be used to support private school tuition and public school expenses, including supplemental academic tutoring and special needs services.
Families with incomes up to 300% of the area median income — ranging from $234,000 to nearly $500,000 for a family of four — are eligible.
"Eligibility this broad is a design feature of the statute," Patrick Graff, the report author and senior fellow at American Federation for Children, said in the report. "Eligibility, however, is only the first gate. Whether eligible children actually receive scholarships depends on decisions still being made."
Last month, the U.S. Department of Treasury previewed a proposed rule for how it intends to roll out the new federal scholarship tax credit, which will launch Jan. 1, 2027. The actual proposal is expected by the end of September.
According to the preview, the proposed rule is expected to be inclusive of public, private and religious K-12 schools. Whether homeschooled students are eligible would be determined by states.
So far, local laws exclude nearly 800,000 homeschooled students from eligibility despite meeting monthly income requirements, the Tuesday report found.
"For governors and states who have taken swift action to opt in, thank you, and for governors still considering opting in, what are you waiting for?" said Tommy Schultz, CEO of the American Federation for Children, in a statement Tuesday. AFC supports education reform and school choice, especially for low-income families.
Last month, Maryland Gov. Wes Moore — who leads a state that has yet to opt in — said that while he is exploring the option to join the program, he's against using public funds for private school vouchers. The program's final rules and details of the roll out also still need to be finalized.
“I am never going to leave money on the table when it comes to supporting our kids in public schools,” Moore said. “Here’s the issue: I don’t know what I’m signing up for.”
Supporters say the program will expand educational options for families, while critics say the tax incentive program will harm support for public schools and diminish educational equity.
EdTrust, an educational equity nonprofit, said last month it is concerned about the program’s lack of accountability for student outcomes and a lack of authority states would have to ensure the scholarships are benefiting students who need them most.
