Senators want state to opt-into federal scholarship program

A group of state senators is drafting legislation that would allow Pennsylvania to opt into a federal tax credit program to help increase scholarships available for public and private schools to give out to students and their families.

The group includes several Republicans and one Democrat: including senators Kim Ward, Senate president pro tempore, Joe Pittman, Senate majority leader; Scott Martin, Senate Appropriations Committee chairman; Lynda Schlegel Culver, Senate Education Committee chair; Sen. Judy Ward and Sen. Anthony Williams, D-Philadelphia.

The Educational Choice for Children Act is a federal tax-credit program, created by President Donald Trump's "big, beautiful bill," allows people to contribute up to $1,700 to an organization that awards scholarships to private-school students, starting in federal tax year 2027. Donors will be given a break on their taxes equal to the amount they contribute. The dollar-for-dollar tax credit is about three times as much as people receive from donating to a children's hospital or other causes.

To qualify for these scholarships, one can earn up to 300% of the area's median income. According to the Internal Revenue Service, 30 states across the U.S. have already opted into the program. Organizations that receive the donations can then use the money to provide scholarships for education-related services at private or public schools, including tuition, fees, academic tutoring, special education services, technology services and classroom supplies.

"Across the commonwealth, there are a number of school districts who have cut or terminated some of these described services and programs," Sen. Kim Ward said in her co-sponsorship memorandum. "Public schools would be able to use this funding to help support or restore these types of services and programs."

Advocacy group Education Reform Now estimated Pennsylvania could receive between $32,248,252 if 1% of estimated potential donors made contributions and up to $967,447,560 if 30% of eligible donors participated. Initial guidance on the program was released by the federal government in June, and the IRS expects that full regulations will be issued in September.

For students and families to be eligible for scholarships, a state must opt in with either an order signed by its governor or a law passed by the state legislature by Jan. 1, 2027. If a state does not opt in, taxpayers in that state will still be eligible for the tax credit, but the money will fund scholarships in other states.

"The Federal Scholarship Tax Credit will become available for contributions made on or after January 1, 2027," Ward wrote. "Pennsylvania taxpayers will be able to contribute to this federal program, but our students will only be able to access the scholarships if we opt in. If Pennsylvania does not act, these dollars will be sent to other states, bypassing Pennsylvania students."