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• By Morgan Craven, J.D. • IDRA Newsletter • March 2026 •

The new federal voucher program could divert billions in public funds from public schools while expanding access to private school subsidies with limited oversight.

The July 2025 budget reconciliation bill (aka the Big Beautiful Bill Act) included a federal private school voucher program that, like other voucher programs, could siphon billions of public tax dollars away from public services that benefit millions of children and families, for the benefit of a select few individual families.

The federal voucher program is a threat to public education and to the diverse students and families in our public schools.

Beginning in the 2027 tax year, the federal program will provide a dollar-for-dollar tax credit to individuals who donate to scholarship-granting organizations (SGOs). These organizations provide vouchers to families to send their children to private schools and/or cover other educational expenses, like tutoring, uniforms, transportation or supplies.

These vouchers will be available to families whose household income is less than 300% of the area median income, opening them up to 90% of families, some with incomes of more than half a million dollars (PFPS, 2026).

The law caps eligible individual contributions for the tax credit at $1,700 per year. But the law provides no cap on funding for the program, potentially costing tens of billions of dollars in federal tax dollars each year (Davis, 2025).

The massive diversion of funds weakens educational opportunities for the majority of children who attend public schools in this country.

This is taxpayer money that will no longer be available for public use on public goods, including programs that serve children and families across the country. And, unless federal or state regulations prohibit it, the federal program could allow significant funds to be concentrated in single communities.

For example, a religious community that operates a private school receiving vouchers could also act as an SGO. Parishioners in a Catholic community, for instance, could donate to their SGO and receive the tax credit. The diocese that operates their local Catholic churches could then use the money to fund its own schools and collect the 10% administrative funds for SGOs the law allows.

In this scenario, all money that would otherwise be paid into the public coffers would stay within that single religious community, to the detriment of the public and the public schools that serve the majority of children around it.

Many details of how the vouchers will operate will be outlined in yet-to-be-released federal and state regulations. In a public comment submitted to the Internal Revenue Service (IRS) regarding these regulations, IDRA noted the inherent harms of voucher programs and urged transparency, accountability and oversight. However, those critical elements tend to be at odds with voucher program design.

A growing body of evidence documenting the negative impact of state vouchers demonstrates the harms that can be caused to students and the public schools that lose much-needed public resources. The expansion of these programs through the federal voucher will divert public funds away from public programs and allow them to be used in ways that undermine civil rights protections, weaken public education systems, and exacerbate longstanding educational inequities. (IDRA, 2026)

These harms are inherent to private school voucher programs, and along with other organizations, families, educators and students across the country, IDRA has opposed the implementation of the federal voucher program.

It is important to continue telling members of Congress to oppose the program when opportunities arise, and to invest in public education and other programs and protections for the diverse students in our schools.

Federal-State Voucher Program Double Dipping

The federal voucher program is open to individuals who may also be taking advantage of state vouchers. States can decide whether to accept the program. As of mid-March, 29 states have opted into the federal program, or their governors have announced their intention to do so (Stone et al., 2026).

For example, in late January, Georgia’s Governor Brian Kemp announced the state would opt into the federal program. This decision was made without public input or consultation with the legislature, even though, like other states, Georgia has consistently underfunded its public schools and has implemented a state voucher system that lacks sufficient transparency and accountability, according to the state’s own Department of Audits (Arciaga, 2026).

In Texas, Governor Greg Abbott announced in late 2025 his intention to opt the state into the federal voucher program. This will add to the state’s own new robust voucher scheme, which has already attracted more than 200,000 applicants – more than are covered in the state’s initial budget for the program (a fact that will surely be used to argue for program expansion) (Texas Comptroller, 2026).

An analysis of state data obtained by the Texas Center for Voucher Transparency shows that three out of four of these applicants are likely already enrolled in private schools or are homeschooled, despite proponent’s claims that vouchers will “save” students from struggling public schools (Yu, 2026). By subsidizing private education and paying families whose students have not attended public schools, the program could drive up costs to the state by millions of dollars.

Heightened Harms to Students and Public Schools

The federal voucher program will exacerbate the harms of state programs by expanding taxpayer-funded private school options for individual families and enabling further divestment from public education. This massive diversion of funds weakens educational opportunities and other publicly funded programs for the majority of children attending public schools in this country.

Denying public schools much-needed public funds harms children of every background in every state and community across the country, including those with disabilities and those who make up the majority of public school students: Black, Latino and Indigenous children, children from families with limited means and children in rural communities (see IDRA et al., 2025).

The programs also compromise civil rights protections for vulnerable students and threaten to increase economic and racial segregation in schools (Kahlenberg et al., 2016). Voucher programs often provide little oversight, accountability or transparency regarding where and how funds are used and whether students who use them are receiving a quality education (see IDRA et al., 2025).

Continued Advocacy is Critical

Despite the passage of the federal program, IDRA and many other individual and organizational advocates continue to oppose it fundamentally and to push for robust regulation that provides some level of protection for students and public schools.

It is important to continue telling members of Congress to oppose the program when opportunities arise, and to invest in public education and other programs and protections for the diverse students in our schools.

For more information about IDRA’s work, sign up for updates (https://idra.news/GetUpdates) and see advocacy tools and tips at www.idraseen.org.

Resources

Arciaga, M. (January 20, 2026). Georgia Opts into Federal Voucher Program as Public Schools Face Funding Strain. IDRA.

Davis, C. (July 6, 2025). Megabill Takes Cap Off Unprecedented Private School Voucher Tax Credit, Potentially Raising Cost by Tens of Billions Relative to Earlier Version. The Institute on Taxation and Economic Policy.

IDRA. (January 29, 2026). Public Comment Opposing Implementation of the Federal Private School Voucher Program. IDRA.

IDRA, EdTrust, Advancement Project, Legal Defense Fund, & Southern Poverty Law Center. (December 2025). Federal and State School Vouchers: Impacts on Student Civil Rights Talking Points for Education Advocates.

Kahlenberg, R., Potter, H. & Quick, K. (December 19, 2016). Why Private School Vouchers Could Exacerbate School Segregation. The Century Foundation.

PFPS. (2026). Federal Voucher Program – FAQs. Education Law Center, Public Funds Public Schools.

Stone, M., Schultz, B., & Liu, L. (March 18, 2026). Federal Private School Choice: Which States Are Opting In? Education Week.

Texas Comptroller of Public Accounts. (March 16, 2026). Texas Education Freedom Accounts Reach 200,000 Student Applications Ahead of Tomorrow’s Deadline.

Yu, I. (March 9, 2026). Many Texas voucher applicants are already enrolled in private or home school, data show. San Antonio Express-News.

Morgan Craven, J.D., is the IDRA national director of policy, advocacy and community engagement (morgan.craven@idra.org).

FAQs 

What is the federal voucher program?

The federal voucher program provides tax credits to individuals who donate to scholarship-granting organizations that fund private school tuition and other educational expenses.

Who can receive vouchers under the federal program?

Families earning up to 300% of their area’s median income may qualify, making the program available to most households, including some high-income families.

How does the program affect public school funding?

The program could redirect billions of dollars in tax revenue away from public schools and other public services, reducing resources available for the majority of students.

Can families use both state and federal vouchers?

Yes. Individuals may be able to benefit from both state and federal voucher programs, increasing public costs and expanding private school subsidies.

What are the concerns about accountability and oversight?

Voucher programs often lack strong transparency and accountability measures, raising concerns about how funds are used and whether students receive a quality education.

How can voucher programs affect students and communities?

Research shows voucher programs can increase segregation, weaken civil rights protections and reduce funding for public schools that serve most students.

[© 2026, IDRA. This article originally appeared in the March edition of the IDRA Newsletter. Permission to reproduce this article is granted provided the article is reprinted in its entirety and proper credit is given to IDRA and the author.]