The program, set to begin in 2027, lets qualifying taxpayers claim a dollar-for-dollar federal income-tax credit for donations of up to $1,700 to scholarship-granting organizations. Those organizations distribute the money to families for costs that can include private-school tuition, tutoring, summer programs and computers.

The Treasury Department estimates the program could generate nearly $26 billion in scholarship donations by 2030. For comparison, the federal Title I program, which helps schools serve low-income students, distributed more than $18 billion in 2023.

Colorado Gov. Jared Polis, a Democrat, has opted in, calling the choice an obvious way to make Colorado children eligible for the benefits. New York Gov. Kathy Hochul is the only other Democratic governor reported to have joined voluntarily. Minnesota Gov. Tim Walz has said his state will not participate. Fifteen Democratic governors and Washington, D.C.’s mayor remained undecided, according to a state tracker cited in the report.

States that do not opt in can still have residents donate to scholarship organizations and claim the federal credit, but families in those states will not qualify for scholarships. States may change their participation from one year to the next.

The decision has divided public-education supporters. Some see an opportunity to secure funding for public-school students; others fear the program will expand private-school subsidies and weaken public education. Jessica Levin, litigation director at the Education Law Center, describes the policy as designed to create political divisions, with governors potentially pressured to join because of the benefits available to some public-school families.

The Southern Education Foundation, which opposes private-school vouchers, is organizing scholarship-granting groups focused on public-school students. Its senior director of public policy and advocacy, Fred Jones Jr., said the organization shifted toward helping students after many of the Southern states where it works opted in. The groups could raise money for tutoring, after-school programs and summer learning.

Former Tulsa Public Schools Superintendent Deborah Gist has also started a national scholarship organization aimed at public-school students. But public schools may have fewer straightforward ways to use the program: They generally cannot charge for core instruction, while private schools can use scholarships to cover tuition. Georgetown University education finance expert Marguerite Roza said public schools might seek reimbursement for optional services such as tutoring, after-care or field trips.

Roza said districts would need to work with public-school-focused scholarship organizations and encourage employers to make donations available through payroll systems. The money will not flow automatically, she said; districts that do not participate may receive nothing.

That approach troubles Levin, who argues that public schools should receive direct funding rather than rely on a program that also supports private education. She predicts most of the money will go toward private-school tuition and related expenses, in part because private schools already have established scholarship organizations and promotional networks.

There are also concerns about how donations will be distributed. Brookings Institution researchers estimate the wealthiest counties could generate about three times as much money through the program as the poorest counties. Jon Valant, a Brookings education policy fellow, said donations are likely to favor scholarship organizations serving donors’ own communities, leaving rural and lower-income areas at a disadvantage.

Eligibility is broad: A student can qualify if household income is below 300% of the area’s gross median income. Treasury estimates that threshold would cover about 95% of students. Valant warned that the program could end up serving affluent families as well as those with fewer resources.

The federal credit is available to qualifying donors nationwide, but a state’s opt-in decision determines whether families there can receive scholarships. That leaves Democratic governors weighing a practical question—whether participation could bring some resources to public-school students—against concerns that the program could channel public revenue toward private education and disproportionately benefit wealthier communities.