A new federal school choice tax credit included in the recently passed “One Big Beautiful Bill” is quickly becoming a flashpoint in states across the country, with education reform advocates urging governors to opt in and unlock scholarship funding for families.
American Federation for Children National Press Secretary Brian Jodice said the federal provision represents one of the most significant expansions of educational opportunity in decades. The program allows individuals to receive a dollar-for-dollar federal tax credit of up to $1,700 for donations made to scholarship granting organizations that fund K–12 educational expenses.
Jodice described the measure as “the best kept secret” of the broader legislation, noting that it enables states to participate at no direct cost to their budgets. Donations would flow through nonprofit scholarship organizations, which would then distribute funds to families for eligible educational uses, including private school tuition and certain public school services such as tutoring.
More than two dozen states have already signaled participation, according to Jodice, with school choice programs now operating in 32 states and the District of Columbia. Nearly 20 states have adopted universal eligibility models, allowing families across income brackets to apply.
The political tension centers on states that have not yet opted in. In Illinois, Governor J.B. Pritzker previously allowed the state’s Invest in Kids tax credit scholarship program to expire. Advocates argue that failing to participate in the federal program would mean Illinois taxpayers could still donate to scholarship organizations in neighboring states while students within Illinois would be excluded from benefiting.
“If Illinois doesn’t opt in, families can still donate and claim the credit,” Jodice explained, “but those dollars will flow to states that have approved scholarship granting organizations.”
Supporters contend the program offers flexibility that goes beyond private school tuition. Because funds can also support services such as tutoring for public school students, they argue it broadens access rather than diverting resources.
The initiative arrives amid growing national attention on education reform. Texas recently approved what is expected to become the largest day-one school choice program in the country, and several states report waiting lists for existing scholarship programs. Polling cited by advocates suggests broad public support, including among minority voters and independent voters.
Critics, including teachers unions in several states, argue that tax credit programs undermine public education systems. Jodice countered that competition often drives improvement across sectors and pointed to research suggesting that public school outcomes can improve in areas where school choice programs operate.
The federal credit also establishes a framework that future administrations could expand, depending on participation rates and demonstrated demand. Education advocates say strong early implementation will be critical to building political and public support.
For Illinois and other holdout states, the decision may hinge on whether leaders view the program as an opportunity to supplement educational funding or as a policy shift that alters the balance between public systems and private options.
As the program moves from legislative text to implementation, the broader debate over education reform, parental choice, and taxpayer dollars is likely to intensify — particularly in states where school funding and student performance remain central political issues.