Just Say NO to the "Education Freedom" Tax Credit
Virginia does not Want the Education Freedom Tax Credit Program
Now that the official regulations for the Education Freedom Tax Credit (EFTC) program have been published, it is time for each state Governor to decide whether this voucher scheme is right for their state. In Virginia, Governor Spanberger has promised to “oppose efforts that seek to erode faith in our public schools or take public dollars out of public schools.”
This is your opportunity to oppose the EFTC voucher scheme by clicking the button below before December 1, 2026 to provide comments.
Meanwhile, advocates for the program are pushing disinformation and pressuring Governor Spanberger in an effort to make her accept the program on behalf of Virginia. On the other hand, numerous public education advocacy groups have asked the nation’s governors to reject the EFTC.
The EFTC program is the Trump administration’s response to the perceived need to privatize public education that is explained in Project 2025, Mandate for Leadership: The Conservative Promise. The administration and privatization advocates have vigorously worked to disparage public education in an attempt to convince parents that public schools are flawed and that they should not want to send their children there. What is sad is that even though this type of school voucher program rarely benefits children, conservatives widely support them.
Before leaving office in 2026, one of former Governor Youngkin’s last actions was to formally opt Virginia into the EFTC, but Governor Spanberger can decide not to verify the paperwork, effectively opting the state out of the program. To date she has not decided and she has until February 15, 2027 to make a final decision by either submitting or not submitting an updated list of Scholarship Granting Organizations (SGOs) for the Commonwealth. SGOs are non-governmental, third-party organizations that take monetary contributions from taxpayers and hand them out to families as vouchers. If the Governor submits an updated list of SGOs, it would signify that she is accepting participation, while not submitting an updated list of SGOs has the effect of rejecting participation in the EFTC.
This article highlights the many reasons why the EFTC voucher scheme should be rejected by Governor Spanberger, including the following:
In the past, Virginia has rejected school vouchers.
Virginia values are not supported by the voucher scheme.
There is grossly inadequate oversight and accountability of private schools and SGOs.
The benefits of these vouchers to students and schools have been significantly inflated.
Private schools supported by vouchers can freely discriminate against students with impunity.
The Trump Administration has used a disinformation campaign and significant pressure to urge states to opt into the voucher scheme.
This voucher scheme will harm public school budgets and students.
Virginia Rejects School Vouchers
Private school vouchers are not popular in Virginia. Nearly all bills on school vouchers that have been introduced in the General Assembly have failed. Only one much smaller program was started in 2012 for low income students, but it has a relatively modest impact on state funding for public schools. All other legislative attempts to initiate private school vouchers have failed.
Meanwhile, two federal bills (H.R. 9289 and S. 2497) were introduced to Congress in 2026 with the intent of repealing the EFTC tax credit and school voucher granting components of the reconciliation bill (H.R.1). Those bills have not progressed to consideration in either Congressional chamber.
If the majorities of the US Senate and House of Representatives flip in the mid term elections, it is likely they will repeal the federal voucher program in their reconciliation budget, meaning the program would cause chaos for one year, and many students taking the vouchers would return from private to public schools in January, 2028. So if Governor Spanberger delays joining the federal program for at least a year the General Assembly and Congress may be able to resolve some critical issues that could impact the well-being of Virginia’s children.
Voucher Schemes do not Reflect Virginia Values
Some Virginia Democratic policymakers tried to pass additional requirements for the voucher program to bring it more in line with Virginia’s values. In 2026, a Virginia bill (HB 359) designed to add strict regulations to the new federal bill was introduced to the Virginia General Assembly by Del. Dan Helmer (D-Fairfax), but it was continued to the 2027 session. However, the Trump administration refused to let states attach any other restrictions. Those requirements prohibited by the Trump administration included: 1) prioritizing public school students and low income students, and 2) imposing accountability requirements on the schools accepting vouchers and the SGOs. Vermont was another state that tried this approach, but concluded that if they can’t adjust the regulations to meet their priorities, they are not interested in the program.
In fact, the statute and regulations will likely be disastrous to students, families, communities and public school systems. Additionally, it is unusual that states are prohibited from adding additional restrictions to federal regulations, since it is not uncommon for states to add rules to meet the specific needs of their state. And we must remember that it is the states that have the responsibility for overseeing public education, not the federal government. The prohibition of additional regulations is unfortunate because there are many aspects of this statute that can cause harm, reduce the quality of education, and waste taxpayer’s money, but these issues could be ameliorated if the Commonwealth was allowed to add additional guardrails and requirements to the EFTC program rules.
Below are additional unacceptable features of the EFTC program that would be imposed on the Commonwealth if Governor Spanberger accepts it for Virginia.
Grossly Inadequate Oversight and Accountability of the EFTC
The EFTC regulations released on Oct. 1, 2026 suffer from inadequate requirements for oversight and accountability. In addition, as mentioned above, since states can not add guardrails or additional restrictions there is a high expectation of poor education quality, waste, fraud, and abuse of public funds in schools that accept vouchers and with the SGOs that administer the vouchers. If the EFTC program is adopted in Virginia, Virginians must insist on better oversight and accountability requirements.
Before the proposed regulations were published, subject matter experts urged the Internal Revenue Service and Treasury to improve the quality control and fraud prevention requirements in the EFTC program’s interim rules. In response, a feeble attempt was made by the Trump administration to get around the accountability problem through the use of “digital wallets” to manage the voucher component. In this way, the SGOs can claim they meet accountability requirements because another entity was processing payments. However, there is little oversight or accountability of digital wallets, which is concerning because waste, fraud, and abuse of public funds are rampant in other school voucher programs.
Currently, thousands of private schools in other states take public money in the form of vouchers without adequate oversight or accountability. Adding to the problem is that it is easy for anyone to say they are starting a private school, enroll students, and collect vouchers with little to no evidence they are a legitimate school. To illustrate just how easy it is to start a private school, journalists pretended to start private schools and succeeded without anyone (including state regulators) noticing they were not educators. That experiment showed how easy it is to open a private school that takes public money (from taxpayers and public schools) without inspection of credentials or a background check. Any family should be terrified at that prospect, and any taxpayer should be infuriated by that level of fraud and abuse.
Regarding accountability for academic quality in schools that accept vouchers, private schools don’t have the same requirements for accountability, transparency, and safety as public schools, It has been reported that academic performance drops among students who switch from public to private schools that accept vouchers, but private school students are not required to take standardized tests like public school students, so it is hard to compare learning outcomes between private and public schools. One must remember that not all private schools accept vouchers, and those that do often are not financially stable; therefore, it is common for some to close a few years after opening.
Benefits of Vouchers have been Significantly Inflated
When the EFTC program was first introduced, some policymakers and advocates supported it because they thought public school students could benefit from the program based on the assumption that some SGOs could be incentivized to target public schools. However, the regulations explicitly limit any state from requiring SGOs to direct funds to public schools or public school students, despite the obvious intent to give SGOs significant leeway in how they disburse funds.
Unfortunately, some news sources continue to erroneously suggest that public school students can benefit from these EFTC vouchers. The proposed final regulations should dispel that misunderstanding, because it is clear that the regulations limit how public school students can benefit from the EFTC program. Additionally, since most public school services are part of a constitutionally guaranteed public education and those services are required to be offered for free, public schools cannot accept vouchers or other funding to pay for those services, whether the school actually provides the services or not.
Historically, most vouchers in program schemes like this go to students who already attend private schools. Even when public school students are approved for private school vouchers, most end up not using them. Studies show that public school students don’t switch schools for a number of reasons, including: the private school rejected their application; families cannot afford to pay the tuition that isn’t covered by the voucher, or; the family can not provide transportation to the private school. Private schools are not required to provide transportation for their students; therefore, that burden falls on families to arrange for transportation to and from school every day during the school year. Many families do not have the flexibility to chauffeur their children to private school.
Private Schools can Freely Discriminate Against Students
DISCRIMINATION: Public school students are protected by both federal and Virginia civil rights laws, but students may lose those protections when they move to private schools. Private schools operate with broad discretion over their mission and operations, and are only subject to civil rights laws if they receive federal funding. These vouchers created in the EFTC program do not count as federal funding because they are provided with funds from tax credits.
Private schools, especially religious schools and long‑standing segregation academies, are known to discriminate in admissions, often excluding LGBTQ+ students and students with disabilities. Some also maintain racially segregated enrollment patterns. Currently, millions of taxpayer dollars a year are given to segregation academies in the form of vouchers. This means that states can not prevent vouchers from potentially funding segregation and discrimination against students, because states cannot prohibit schools that accept vouchers from discriminating against students in admissions or disciplinary practices.
In fact, numerous civil rights organizations have urged governors in all 50 states and the District of Columbia to not opt into the EFTC program, warning that it could undermine public education and disproportionately harm Black children, children with disabilities, and other underserved communities.
Also, private schools are not obligated to support the basic civil rights of freedom of speech or free exercise of religion. This is an important issue since a majority of private school students attend faith-based schools. Both SGO’s and private schools can pick and choose the students that they serve. And private schools can choose the students they want to retain. For these reasons the promise of choice of school is limited by discrimination at two levels – by both the SGOs and the private schools. In fact Ohio courts found a similar type of voucher system unconstitutional for these same reasons
INEQUITY AMONG AWARDS: There is no mechanism to ensure that EFTC vouchers will be distributed equitably to students. Although public schools must accept all students eligible to enroll, SGOs have the freedom to select the recipients of EFTC vouchers and decide on the size of the award for each voucher. This results in inequitable allocation of funds, since some students may receive vouchers that cover their entire tuition, while other students may receive only partial funding or may not receive any funding at all, while states have no ability to require equitable distribution of EFTC voucher funding.
INEQUITY OF DISCIPLINE: Private schools tend to have very strict and brief disciplinary procedures and often may suspend or expel students more readily than public schools. This is a reason many private school students return to public school. It is not uncommon in private schools that harsh discipline practices are applied in misalignment with the severity of an infraction. In other cases, harsh discipline practices may be applied more readily to minorities or disabled students. This lack of protection from disciplinary actions is another way that the EFTC voucher program fails to serve Virginians.
LACK OF SERVICES FOR STUDENTS WITH DISABILITIES: An estimated 15% of students nationwide (14% in Virginia) in public schools are eligible for special education and related services under the federal Individuals with Disabilities Act (IDEA) and the Virginians with Disabilities Act. However, students with disabilities lose those protections if they transfer to private schools. Private schools can refuse to admit students with disabilities, discriminate in disciplinary procedures, and refuse to provide the services that a student would be entitled to in their Individual Education Program in public schools.
Students with disabilities are often not accepted by private schools because the school does not have the facilities or resources to educate a disabled student. Even if a disabled student is admitted, the education in private schools often is inadequate and does not meet their educational needs. Proponents of EFTC vouchers often promise students with disabilities a path to private schools using these vouchers but families’ experiences reveal that is not the reality.
Trump and Privatizers Used a Disinformation Campaign and Pressure to "Encourage" States to Opt into the Voucher Scheme
In the months since the interim regulations were shared, the Trump administration and privatization advocates have used misinformation to entice states to opt into the program. Now the administration is using “competitive pressure" to try to force states to opt in.
The pressure is applied by allowing residents from a non-participating state to take the Federal Scholarship Tax Credit by donating to another state’s program. The argument is that the non-participating state will lose benefits because their students will not be able to receive EFTC vouchers. Already one holdout, Governor Hochul of New York, succumbed to this pressure even as teacher unions protested. And legislatures of Kentucky, North Carolina, and Kansas overrode their Governor’s veto of voucher bills and the states were forced to opt into the scheme.
The status of each state’s participation in the EFTC voucher program can be viewed at this link.
Voucher Scheme will Harm Public School Budgets and Students
The EFTC program is designed to divert federal tax dollars that should be used to fund public education, to instead pay private education expenses. Although some claim this program will not impact public schools, this is not true. The ways this program will harm public education are well documented and outlined below.
False claims that the EFTC program won’t impact public school budgets are being made by both the Trump administration and school choice advocates. But experts warn that vouchers can destabilize public school districts and are likely to shrink public school budgets. This can result in public schools being forced to cut services to students, including popular and/or necessary programs like advanced academic coursework, special education programs for students with disabilities, and/or programming for English language learners.
Perhaps the biggest impact on public school budgets is that any state opting into the EFTC program will be responsible for funding oversight of their voucher program, including tracking donations and voucher recipients, and preventing waste, fraud and abuse in the program. None of that comes cheap, and it may require developing an entirely new bureaucracy within the state government. The costs of a well structured state oversight program can be substantial, sometimes even equaling or exceeding the vouchers themselves.
States with existing voucher programs learned the painful lesson about hidden oversight costs. Cost projections for voucher programs in other states have been greatly underestimated, and it is likely that this will be the case in Virginia. Arizona, Iowa, Oklahoma, and West Virginia saw their state budgets balloon well over the original estimates due to unexpected costs related to their school voucher programs. These unexpected expenditures are related to the lack of oversight and accountability demanded of SGOs which means that it falls to the states to perform these necessary functions. This is a key flaw in the EFTC program because fraud, waste, and abuse are rampant in states with voucher programs. More details about how vouchers financially impact public schools can be found at this link. This author encourages those who are considering opting into the federal voucher program to first determine what it will actually cost their state.
But, What Can I Do? ACT NOW!
Individuals, organizations, and advocacy groups can influence decisions on the Federal Tax Credit School Voucher policy advocating for their priorities and share evidence-based information by submitting public comments before the regulations are finalized. The official site for submitting comments is found at this link or via the button below. One can also view the comments of others on this site.
The deadline for submitting comments is December 1, 2026. ACT NOW!
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