Private schools anticipate an enrollment boost thanks to tax credit

At Northstar Christian Academy in Rochester, N.Y., space is so tight that not all teachers have their own classrooms. One science teacher moves from class to class, towing his materials in a suitcase. “We even have some classes in the cafeteria,” said the school’s development director, Jaime Summerlin, who graduated from Northstar in 1997 and later sent her own children there.

During the post-COVID student influx to private schools, Northstar’s enrollment grew from 232 in 2019 to 450 this school year. But Summerlin says the K-12 school, which also has a preschool and a daycare, is preparing for even more growth if New York Gov. Kathy Hochul opts into the new federal Education Freedom Tax Credit.

“We’re not going to wait until she signs that paper,” Summerlin told me on Monday. “For us, we’re believing that this is going to happen, and we’re looking forward to this happening.”

As the federal government prepares to launch a first-of-its-kind school choice tax credit program in January, school choice supporters are applauding the move while bracing for legal fights. Analysts say the measure could bring more students to private schools, many of which have already seen growth in the past few years. But critics say the measure inappropriately directs funding toward private causes.

The One Big Beautiful Bill Act that Congress passed in July 2025 included a measure that set up a nationwide school choice tax credit program. The Education Freedom Tax Credit allows taxpayers to donate to a scholarship-granting organization and receive a matching tax credit up to a certain amount. The SGO would then disburse the money to families for expenses like tutoring or private school tuition. States must opt in for families and schools to receive the funds.

“It has the potential to be the most transformative education policy passed in the United States in the last several decades,” said Ashling Preston, director of federal affairs for the American Federation for Children, which has advocated for the measure.

Last week, the Treasury Department released a proposal that outlines specifics for the program. It allows a credit of $1,700 per individual tax filer and $3,400 for married couples filing jointly, requires states to finalize their SGO lists by Feb. 15, 2027, and clarifies that participating taxpayers can’t designate a specific student to receive their contribution. According to the proposal, states must allow all SGOs that meet federal requirements to participate in the program. The public has 60 days to comment on the proposal.

The program sidesteps common complaints with school choice measures by leaving current public school funding untouched. Preston said that supporters of the tax credit expect lawsuits from critics, but she called the rules ironclad. “I just really don’t believe that any of these lawsuits are going to stand … because Treasury has so clearly done their homework here,” she said.

To receive a scholarship, families must reside in a participating state and make incomes at or below 300% of area median levels. The program allows for an easier application process for students who attend low-income-area schools, receive scholarships for tutoring or special needs, or are in the foster care system. Taxpayers can choose to contribute to any qualified SGO, regardless of whether it’s in their own state.

SGOs participating in the program must provide scholarships to at least 10 children who do not attend the same school, and they cannot earmark donations for specific students. The proposal allows SGOs to operate in multiple states.

Autumn Faulkner, state policy engagement director for Association of Christian Schools International, said that she expects about 42 states to opt in during the program’s first year. “A lot of the vernacular going out have been calling it Trump’s voucher program,” she said. “It’s not a voucher program; it’s a scholarship program, and so I think they just want to be very far away from the administration as possible. … When people say it’s a voucher program, automatically they think it’s pulling from public schools, and that’s just not the case.”

Faulkner said ACSI estimates that about 95% of U.S. students will be eligible for the program. She added that homeschoolers will likely be eligible in a patchwork of states based on each state’s legal definition of homeschooling.

Teachers unions like the the National Education Association and the American Federation of Teachers have decried the proposal, with AFT President Randi Weingarten labeling the program a “real-life Hunger Games” scramble for funding.

As of mid-September, 30 states had officially opted into the tax credit. Only one Democratic governor, Jared Polis in Colorado, had officially opted his state in, though Gov. Kathy Hochul has indicated she will follow suit. Former Virginia Gov. Glenn Youngkin opted his state in days before he handed the office to his Democratic successor. In North Carolina, Kansas, and Kentucky, state legislators overrode Democratic governors’ vetoes of bills that opted into the program.

“Democrats used to be known as the party of education,” said Jorge Elorza, CEO at Democrats for Education Reform. “Today, that advantage has eroded.”

Elorza said that some governors likely won’t opt in before the Jan. 1 deadline. Many, he said, field pressure from teachers unions urging them not to participate. But as the program goes into effect, and as more taxpayers learn about the credit while filing their taxes, he thinks public opinion will eventually push all Democratic holdouts to opt in.

“I’ve always believed that, if governors evaluate this program on its merits, then they themselves will come to see that this is a no-brainer,” Elorza said. “If you opt out, the money leaves. If you opt in, it stays in your state. That’s about as easy a decision as a governor will ever have to make.”

One of the program’s strengths, Preston and Elorza argued, is that both private and public schools can benefit. Some public school advocacy groups have proposed using the funds for services like tutoring, extended day programming, or summer programs, though many still have reservations about the program itself.

“This is not a good policy,” said Fred Jones Jr., senior director of public policy and advocacy at the Southern Education Foundation. The group works to improve education for students in Southern states, and it opposes redirecting tax dollars that would otherwise go to the federal government toward private causes instead. Jones also said the measure doesn’t include pre-K funding and lacks sufficient guardrails to ensure program quality. His organization advocated against passing the measure and has since encouraged governors not to opt in.

But after the measure passed, the group decided to create an alliance of SGOs serving public school students. “We don’t like the policy, but it’s here,” Jones said. “And if states are going to opt in, we think that they should prioritize public school students.”

Of the 17 states that the Southern Education Foundation primarily serves, only two—Maryland and Delaware—have not opted into the measure. Jones said the group still suggests governors not opt in.

“To the extent that there’s an opportunity to repeal the law under a different administration, under a different Congress, we’ll certainly work to do that as well. We haven’t been shy about saying that. We still don’t think that this is the best thing,” Jones told me Wednesday. “But for right now, this—us working to put the alliance forward—we think is the best thing that we can do for our kids in our region.”

Back in Rochester, N.Y., Northstar Christian Academy partnered with ACSI’s scholarship granting organization, the Children’s Tuition Fund, in expectation that Gov. Hochul will opt the state into the program. Jaime Summerlin is preparing for more donor conversations and educating herself on donors’ questions about the tax credit. 

“I am really daily praying that our governor sees that this is so beneficial for our state, and I’m praying that she makes this decision to sign this sooner than later,” Summerlin said. “I’ve been praying for states all around our country who have not signed yet or haven’t even opted verbally to do this, because I do believe that this is so beneficial to families.”