Will Democrats Reject ‘Free Money’ for Schools?

In The News by DFER

September 17, 2026

A reported feature examines how the new Federal Scholarship Tax Credit—launching January 2027—is forcing Democratic governors to weigh the political risks of joining or rejecting a school choice program designed by conservatives. Program architect Jim Blew calls it “the most important federal educational reform in decades,” noting 90% of students will eventually be eligible. The piece lays out the novel design: an uncapped, dollar-for-dollar federal credit up to $1,700 that costs donors nothing, funneled through nonprofit scholarship-granting organizations that—free of many constraints on government aid—can restrict funds by religion, disability, or public-school status, with families earning up to 300% of area median income (over $500,000 in parts of New York) still qualifying. Thirty-one mostly Republican states have joined; Catholic schools and religious groups stand to be major beneficiaries. Democrats for Education Reform is part of the advocacy coalition, and CEO Jorge Elorza frames it as a rare chance to boost public school funding at no state cost: “Why would you not keep these resources in state… as opposed to them going into the black hole, which is the federal treasury?”

The feature maps the fraught politics for governors eyeing 2028—Newsom, Pritzker, Shapiro—amid pressure from teachers unions, civil rights groups (Legal Defense Fund, National Urban League, UnidosUS), and 33 state union presidents who signed a letter calling accommodation “unacceptable.” Only Colorado’s Polis (calling it “free money”) has officially opted in; Hochul has signaled willingness pending final rules, partly tied to New York’s Jewish and Catholic voters. Advocates including Katie Everett of the Massachusetts Educational Opportunities Coalition expect Healey to opt in despite union opposition, while Illinois (Pritzker, facing 69% voter support but union pressure) and California (Newsom, consistently opposed) remain tougher; Minnesota, Oregon, and Wisconsin have already declined. The piece details the private-school infrastructure advantage over public districts and the emergence of intermediary organizations serving public schools—EducationSuperHighway (Evan Marwell) and Future School Fund, whose founder Deborah Gist says districts may prefer partnering with groups that already have compliance and technology in place. It notes the School Superintendents Association, once a lobbying opponent, now offers seminars to help members engage the program, and Georgetown’s Maggie Cicco suggests payroll-deduction giving could create steady funding streams.

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