DFER Analysis Estimates as Much as $5.08 Billion in Annual Scholarship Contributions
WASHINGTON, D.C. – Democrats for Education Reform (DFER) today celebrates New York Governor Kathy Hochul’s decision to opt the state into the Federal Scholarship Tax Credit, ensuring New York students and families can benefit from new scholarships for qualified K-12 education expenses.
Gov. Hochul’s decision opens the door to billions of dollars in potential new education resources for New York students. A DFER analysis estimates that nearly 3 million New York taxpayers could potentially take advantage of the federal credit. If every potential redirector contributed the full amount allowed under the tax credit, as much as $5.08 billion annually could flow to scholarship granting organizations serving New York students.
DFER CEO Jorge Elorza said, “By opting in, Governor Hochul has displayed great courage and leadership. She consistently said she would opt in to the federal scholarship tax credit program so long as the Treasury Department did not insert any poison pills into the regulations. Today, she followed through on her promise and New York’s children will be the beneficiaries. Well done, Governor!”
“Today’s decision is a huge win for public school students across New York,” said Nicole Pollock, President of DFER. “A third grader in Rochester who’s behind in reading can get a tutor. A student in the Bronx can get the speech therapy or counseling her school can’t afford to provide. A teenager in Buffalo can get a ride to an after-school program and a laptop to do his homework. Treasury’s rules made clear these scholarships are for public school students too, and Governor Hochul’s bold action will make sure New York’s kids won’t miss out. Now the work starts to get these dollars to the families who need them.”
“Governor Hochul kept her word, and New York’s kids will be better off for it,” said Arne Duncan, senior fellow at DFER and former U.S. Secretary of Education. “Governor Hochul understands that the way to make this program work for the kids who need it most is to be at the table shaping it. Thanks to her courageous decision, students across the Empire State will have a new way to access K-12 resources next year. Every governor still waiting should follow her lead.”
The new federal program allows taxpayers to receive a tax credit of up to $1,700 for contributions to qualifying scholarship-granting organizations, which then provide scholarships to eligible students. Scholarships can support a broad range of qualified education expenses for students attending public, charter and private schools, including tutoring, academic enrichment, books and instructional materials, technology, transportation and services for students with disabilities.
The Federal Scholarship Tax Credit will take effect Jan. 1, 2027. With Gov. Hochul’s announcement, New York becomes the 31st state to formally opt into the program, and just the second Democratic governor, joining Colorado’s Jared Polis. Regulations issued by the U.S. Treasury on October 1, 2026 gave states until the end of the year to opt in for Year 1. Participating states must submit a list of qualifying scholarship-granting organizations to the IRS for the 2027 tax year.
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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.
