Rianna Saslow serves as Deputy Director of Policy and Action at the National Parents Union.
Last week, Secretary Linda McMahon appeared before the House of Representatives to discuss the policies and priorities of the Department of Education. The four-hour hearing covered a lot of ground, from devastating shortcomings at the Office of Civil Rights to student loan caps to the new MEGA block grant proposal. It would’ve been easy to miss one small yet crucial moment when Congressman Mannion, a Democrat representing the 22nd district of New York, asked about the new federal scholarship tax credit (FSTC) program.
Congressman Mannion asked, “Will states have the ability to set rules around these scholarship granting organizations, [such as] assuring that there will be scholarships dedicated to low-income families or minority families or public institutions? Will the school boards or the boards of regents or the governors have control over that at the state level?”
Secretary McMahon’s answer was clear: “Yes, those decisions will be made at the state level.”
This moment matters because while policymakers and advocates understand the broad outline of the FSTC program, the details that will determine whether it actually works for families and how states can shape it are still undefined. The program was established last summer in the One Big Beautiful Bill Act to provide a dollar-for-dollar tax credit for anyone who makes a donation of up to $1,700 to an eligible scholarship granting organization (SGO). These SGOs then provide funding for families in both public and private schools to pay for educational expenses such as tuition, tutoring, summer learning programs, and special education services.
Until now, the rulemaking process around FSTC has been frustratingly unclear. The timeline for final rules keeps slipping, and states are weighing whether or not to opt in with only partial information. That uncertainty wastes valuable time for families, advocates, and policymakers, and it makes it more difficult for states to build the infrastructure needed to launch SGOs responsibly. And while many private schools are already positioned to take advantage of this new funding stream, SGOs designed to serve public school students are far less common and will need a real runway to get off the ground if public school families are going to see any benefit.
To be fair, Secretary McMahon won’t be the one writing the final rules. That responsibility sits squarely with the Treasury Department. But her public assurance is still significant, and it’s something both Republicans and Democrats should welcome.
If McMahon is right, blue states should be able to shape their programs around their own values: targeting the students furthest from opportunity, setting stronger guardrails around transparency and civil rights, and ensuring that dollars truly support families. At the same time, conservatives who argue for local control should also be happy, because state flexibility is likely the only way this tax credit would be adopted widely across the country.
And states will need that flexibility.
For instance, as written, the program allows scholarship eligibility for families earning up to 300% of their median area income. In many wealthy suburbs across the country, families making well over $300,000 a year will still qualify. Some states may be comfortable with this sort of broad eligibility, especially those that already have universal school choice programs. But others may want to focus scholarships on families who couldn’t afford tutoring or other extended learning opportunities without help. These states should be allowed to raise the bar. According to McMahon, they will be.
Some states may also want stronger civil rights protections built into their programs, something that parents overwhelmingly support. According to polling from the National Parents Union, large majorities of parents believe that any school receiving government funding – whether public or private – should be prohibited from refusing to admit a child based on a disability (77%), discriminating against LGBTQ students (70%), or using race (71%) or gender (68%) as a factor in admissions. And while FSTC dollars technically flow through SGOs rather than directly to schools, the public purpose is unmistakable, and the distinction won’t feel meaningful to families who are denied access. States that might otherwise opt out of the program over discrimination concerns should have the latitude to require clear protections so that every child can benefit.
States may also want more transparency, not just to prevent fraud, but to ensure that these scholarships actually help kids succeed. Parents agree on this, too. NPU polling reveals that 86% of parents support requirements for schools to provide transparent data on student achievement, discipline, and enrollment. Families deserve to know what outcomes they’re buying into, and policymakers need data to determine whether the program is working and how it might need to change.
Right now, only two blue states have opted into the program – most recently, Congressman Mannion’s own state of New York. But even those states are flying blind, still waiting to learn what real authority they’ll have to shape the program in ways that reflect their constituents’ priorities and actually serve their communities. And across the country, other blue states remain reluctant at best, wary of signing onto a federal initiative without knowing whether they’ll be able to enforce basic safeguards or whether they’ll end up funneling dollars into unaccountable programs that primarily benefit wealthy families.
The Trump Administration cannot claim they are “returning education to the states” while states are left guessing about its own landmark policy. If federal leaders want this tax credit to succeed nationwide, then states must have the authority to set meaningful rules: who gets served, what protections exist, and how results are measured.
Secretary McMahon says they will. Now the Treasury Department needs to put that promise into writing.
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With more than 1,800 affiliated parent organizations in all 50 states, Washington, D.C. and Puerto Rico, the National Parents Union is the united, independent voice of modern American families. We channel the power of parents into powerful policies that improve the lives of children, families and communities across the United States. https://nationalparentsunion.org/