Thirty-one states join federal Education Freedom Scholarship program

Thirty-one U.S. states have opted into the federal Education Freedom Scholarship Program, which offers a tax credit for donors to scholarship organizations.

Launched in 2025 through the One Big Beautiful Bill Act, the federal Education Freedom Scholarship Program creates a yearly income-tax credit of up to $1,700 for donors to certified Scholarship Granting Organizations, which in turn provide families with money for tuition, tutoring, curriculum and materials. To date, 31 states—including Alabama, Colorado, Florida and Texas—have elected to participate, leaving 19 states and Washington, D.C. outside the program as the January 2027 deadline approaches.

Secretary of Education Linda McMahon and other advocates argue the scheme returns control of schooling to parents and expands options. Critics in states such as Pennsylvania and Illinois, led by Governors Josh Shapiro and J.B. Pritzker, warn that state oversight and accountability could be weakened.

Four states—Hawaii, Minnesota, New Mexico and Oregon—have explicitly declined participation, and Arizona and Wisconsin governors have vetoed bills that would have forced enrollment, citing concerns about diverting funds from public schools. Analysts estimate the tax-credit component could generate between $164 million and $493 million annually and create thousands of jobs.