Federal Education Freedom Scholarships Could Benefit Millions

By the Editorial Team · Thursday, July 30, 2026

Starting next year, nearly 52 million students nationwide could qualify for Education Freedom Tax Credit scholarships, which provide federal tax credits to donors funding scholarships for various educational expenses. The program has been adopted by 31 states, including New York, offering significant financial support for private and public school educational costs, though it faces opposition from critics who fear it may undermine public school funding.

Nearly 52 million students across the United States could become eligible for federal “Education Freedom Tax Credit” scholarships starting next year, according to a recent report. The initiative, which aims to provide financial assistance for educational expenses, has been adopted by 31 states, including New York, potentially benefiting more than 2.7 million students in that state alone.

The program allows taxpayers to make donations to nonprofit scholarship organizations in exchange for a dollar-for-dollar federal tax credit of up to $1,700 annually. These organizations then allocate the funds as scholarships intended to help students with various educational costs. For private school attendees, including those in Catholic schools and yeshivas, the scholarships may help offset tuition fees. Public school students can use the funds for tutoring, after-school programs, or transportation, according to program advocates.

Governors must actively opt into the program for their state’s students to access these funds. New York’s Democratic Governor Kathy Hochul has opted in and expressed support for the scholarship program, emphasizing its potential to assist students and schools within the state. The New York State Catholic Conference and the Teach NY Coalition/Orthodox Union, which advocate for Jewish day schools, were among the leading supporters pushing for New York’s participation.

In contrast, many Democratic-led states, including California, have yet to join the program, despite having a large number of students—nearly 6 million in California alone—who could benefit. California Governor Gavin Newsom, a potential Democratic presidential candidate in 2028, has not opted into the program to date.

Tommy Schultz, CEO of the American Federation for Children, which promotes school choice, urged all governors to participate, saying the scholarships could provide vital educational resources to millions of families. The federation’s analysis estimates that about 90% of students nationwide would qualify for the program, as eligibility extends to households earning up to 300% of the area median income.

Opponents of the tax credit scholarships, including the New York State United Teachers union, argue that the program effectively diverts public funds to private schools, which they say undermines public education. NYSUT labeled the initiative a form of school voucher system, expressing concerns that it could prompt an exodus from public schools and reduce their funding.

The Education Freedom Tax Credit program was included in the federal budget bill passed under the Trump administration last year and aims to expand educational funding options beyond traditional public school systems. Its implementation and expansion remain subjects of debate among policymakers, educators, and advocacy groups.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.