Democrats for Education Reform Once Again Calls on Every Democratic Governor to Opt In
Treasury Rules Confirm Public School Students Stand to Benefit from High-Dosage Tutoring, Test Prep, Transportation Costs, and More
WASHINGTON, D.C. – The U.S. Treasury Department today released its proposed rules for the Federal Scholarship Tax Credit, and they confirm what Democrats for Education Reform (DFER) has expected since June. Public school students stand to benefit from the program, using scholarships for tutoring, special-needs services and after-school programs, but governors must opt-in for the neediest families and students to utilize the new funds. And importantly for families, there is no “marriage penalty” so married couples filing jointly can claim the dollar-for-dollar credit of up to $3,400. With the program launching January 1, states that keep waiting are running out of time to be ready.
“For months, Democratic governors told us they were waiting on the rules from Treasury. Treasury has answered, and it confirmed that public school students are in,” said Jorge Elorza, CEO of DFER. “The safeguards are real. And the money will be spent whether you opt in or not. The governors who move now get to shape this program for their state’s students. The ones who wait will watch their residents’ tax dollars pay for scholarships in other states.
“Democrats have a chance to listen to their voters and deliver hundreds of millions of dollars for critical educational supports like tutoring, special-needs services and after-school programs. That’s new money, on top of what schools already allocate. But it can’t reach students if the groups that deliver it don’t have an infrastructure in place. Scholarship groups can’t be built overnight. Those groups have to get established, raise money, tell families the money is there, and build systems to check eligibility and pay for services. Every week a governor waits is a week those groups can’t start. The time to opt in is now.”
“We say every child deserves a great education, and here’s our chance to prove it,” said Arne Duncan, senior fellow at DFER and former U.S. Secretary of Education. “Only about a third of students are proficient in reading or math right now. That should be unacceptable to us. The action on education is in the states, and this program can bring hundreds of millions of dollars into each one for tutoring, special-needs services and after-school programs. Treasury’s rules confirm what we’ve anticipated for a while now: public school students will benefit. No program is perfect, but the only way to shape this one and make sure it works for the kids who need it most is to opt in. Republicans have sold fear. We have to sell excellence and show parents we’re fighting for their child. Democratic governors should be leaping at the chance to close the gap and own education again.”
Polling of likely general election voters in nine states with Democratic governors (California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Michigan, New Jersey and Pennsylvania) found majorities in every state support opting in, from 63% in Michigan to 78% in Pennsylvania. Support holds among Democrats (56% to 82%), Black voters (65% to 81%) and Latino voters (72% to 92%). In every state tested, voters sided with a candidate who backs the program over one who calls it a plan to privatize public schools. And asked where they would send up to $1,700 of their federal taxes, a plurality in every state asked chose local public schools.
DFER warned that the program’s success for public school students depends on how quickly states act. Scholarship-granting organizations must be certified, raise money, and build systems to check eligibility and pay for services before families can benefit. According to the National Association of Education Foundations, about 9,000 of the nation’s school districts have no local foundation positioned to serve as a partner today.
“The law ties these scholarships to the same expenses families can already cover through Coverdell education savings accounts: tutoring, special-needs services, books, technology, transportation and extended-day programs,” said Nicole Pollock, President at Democrats for Education Reform. “Many public schools and their partners already run eligible programs. What most don’t have yet is an SGO to expand them. Governors who opt in now give existing and new potential partners time to get certified and be ready for January 1.”
DFER urged undecided governors to follow New York Gov. Kathy Hochul, who announced New York would opt in while keeping the right to revisit if the final rule includes a poison pill. States, scholarship-granting organizations and taxpayers can rely on Treasury’s proposed rules for 2027.
###
Democrats for Education Reform is a national political organization that supports Democratic leaders and candidates who champion innovative policies that expand opportunity, address inequities and improve outcomes for students.