- A new federal tax credit scholarship program could help private and public school students with education expenses
- School choice advocates urge Gov. Whitmer to join in. Public school advocates say Michigan should stay out
- Many questions remain
An extra boost to help students? A way to siphon money away from public schools? Both?
Depends whom you ask.
Some in the education space want Gov. Gretchen Whitmer to opt in to the Education Freedom Tax Credit, saying the program, created under the Trump administration’s “One Big Beautiful Bill,” helps raise money for students to succeed in schools of their choice, whether public or private.
But others want Whitmer to say no to a program they see as a backdoor way to divert public dollars for private school vouchers.
It works like this: Donors can receive federal income tax credits for up to $1,700 in donations to scholarship granting organizations. Those groups then distribute the money to students for education expenses including private school tuition. Students must come from families that make 300% or less of the median income in the area.
Taxpayers in all states can participate. But only students in states that opt in to the program can receive the funds.
The federal program’s rules are not out yet, leaving lots of unanswered questions: How could public school districts participate? How much control do states get over scholarship granting organizations?
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Proponents say they want assurance that Michigan will opt in so they can set up organizations that will ultimately distribute scholarships for students in the state. Opponents say Michigan should not participate in a program that will lower federal revenue, which could impact broader school funding.
“The real question isn’t opt in or opt out. It’s opt in when,” said Josh Cowen, a Michigan State University education policy professor who has been critical of school vouchers.
“I think it’s unrealistic to ask governors to send dollars from adults in their state to kids in another state.”
Cowen said the program is different from vouchers in that it doesn’t affect the state’s budget and that there are real opportunities for public school students if the Department of Treasury rules follow what Congress agreed to last year.
Stacey LaRouche, spokesperson for Whitmer, referred Bridge to previous comments Whitmer made on the program. Whitmer previously said she was waiting for more guidance and called the program a “high-level talking point.”
That hasn’t stopped school choice advocates from planning. Here is what to know.
What’s happening in other states
So far, 30 states have opted into the federal program, according to Ballotpedia. In early May, New York Gov. Kathy Hochul said she intends to opt the state in but is waiting on the rules to formally opt in.
Many states already have their own education tax credit programs too.
Eighteen states have tax credit scholarship programs, according to a 2025 analysis from the National Conference of State Legislatures. Neighboring states Indians and Ohio have programs but efforts to pass a program in Michigan have been unsuccessful.
The case for and against tax credits
Five Democratic members on the State Board of Education earlier this month adopted a resolution urging Whitmer to stay out of the program, saying it “functions as a voucher-style subsidy for private school attendance.” The two lone Republican members disagreed. Republican Tom McMillin called the program “a no brainer” and said the state’s constitutional ban on public funds for private schooling is not relevant here.
“We’re not talking about tax dollars. The credit is going to a scholarship-granting organization and that organization will give it out,” McMillin told board members.
Doug Pratt, director of communications & public engagement of the Michigan Education Association, said when considering the federal tax credit program leaders should not ignore the “politics of its creation.”
For years, former US Education Secretary Betsy DeVos has pushed for a nationwide tax credit scholarship program. But the program signed into law last year gives states the choice of whether to opt in instead of an earlier version that would have had universal participation.
“This was a DeVos-driven national approach to try to get school vouchers nationally inside the Big Beautiful Bill,” Pratt said. “And so if that’s the impetus behind it, that calls into question the veracity of people saying ‘oh this is good for public schools too.’ What this is intended to do is drive public money into private schools via these tax credits.”
(Editor’s note: The MEA Center for Leadership and Learning is a sponsor of Bridge’s Education Watch. It had no role in the reporting, writing or editing of this story.)
The Institute on Taxation and Economic Policy estimates that 138 million taxpayers could take advantage of the program. Assuming an estimated 59 million people contributed, that would cost the federal government $101 billion per year, according to the group’s analysis.
A coalition of school administrator, union and district groups urged Whitmer to stay out of the program in a letter this spring arguing the program “risks widening existing educational inequities.
The politics is evident on the other side of the debate too.
“Just because it came from one administration, it just means automatically that there’s one side of the aisle that is not going to support it, no matter what,” said Stacy McGhee, president and CEO of Lutheran Special Education Ministries, which supports Michigan opting in. Without opting in, McGhee said, Michigan is “just going to fall further behind.”
US Secretary of Education Linda McMahon has visited Michigan at least twice touting the benefits of the program, which she called “a unique opportunity to access education freedom.”
Targeting Michigan’s next governor
Republican gubernatorial candidates, Sen. Minority Leader Aric Nesbitt, US Rep John James, Pastor Ralph Rebandt and Former Attorney General Mike Cox have all previously told Bridge they support the program. Businessman Perry Johnson did not answer the question.
Democratic Secretary of State Jocelyn Benson did not directly answer whether she supports the program but said her aim would be “strengthening the public education system” while fellow Democratic Genesee County Sheriff Chris Swanson said “no vouchers for private schools.”
McGhee worries staying out of the program for political points harms students. McGhee’s organization works in 12 states to provide special education teachers to Christian schools. In total, they serve about 3,000 students with disabilities.
“I know that we need systemic change, but systemic change takes 10,15, 20 years, and in that time we’re going to lose an entire generation of students because we’re fighting a political battle,” said McGhee.
What’s in it for public schools?
Jim Blew, former assistant secretary under DeVos, said public school districts often have foundations that could raise funds for scholarships, and the work is already happening in red states that have opted in.
“They’re already doing that work in red states because the red states are opting in. As soon as Whitmer opts in, she’s going to see those people stand up operations in Michigan too,” said Blew, who is also an adviser to the Federal Scholarship Tax Credit Coalition and co-founder of the conservative Defense of Freedom Institute.
With 90% of students nationwide attending public schools, Georgetown University research professor Marguerite Roza, estimates the gains in funding for public schools will offset any funding losses from students moving from public to private school.
But timing is important, said Roza, the director of the Edunomics Lab. Afterschool groups will also want funding.
“Districts would have to kind of go all in. And if they wait too long … it will be school districts against every other provider out there,” Roza said.
Funding for religious education
Blew said he is watching “very carefully” that the federal rules match the law, and that it’s clear that the law “does not mean that governors get to curate their own list.”
“Governors are very powerful. They’ll use their bully pulpit to promote the things they like the most. But if you’re an SGO (scholarship granting organization) and you qualify, under the law, you get to operate.”
The Michigan Association of Non-Public Schools is setting up a scholarship granting organization that would be used to distribute funds to students “when and if a governor decides to opt the state in,” said executive director Brian Broderick.
