The America First Policy Institute released an interactive tool on Monday showing that states declining to opt into the Education Freedom Tax Credit could forgo nearly $23 billion in education funding over the next three years.
The Funding Loss Calculator, designed by the center-right policy organization, projects that 23 states could miss out on nearly $23 billion between 2027 and 2029 — equivalent to more than 4.1 million scholarship opportunities for students. The tool allows users to model different participation rates and view projected losses on a state-by-state basis.
What the Right Is Saying
Supporters of the Education Freedom Tax Credit argue it expands educational freedom for all families, particularly those trapped in failing public schools. Erika Donalds, chair of educational opportunity at AFPI, told Fox News Digital that the program provides not just private school tuition but also homeschool expenses, curriculum assistance, tutoring, special needs services, and dual enrollment options.
"Every parent deserves to make education decisions on behalf of their children. We have seen state after state where parents are begging for school choice options," Donalds said, citing high demand in states like Texas where 250,000 applicants sought spots in a program with capacity for only 80,000 students.
The America First Policy Institute says the funds come entirely from private donations and not state budgets, meaning participating states do not redirect money from existing public school allocations. Twenty-eight governors have already opted into the program, and supporters say the tool is designed to show residents what their states are missing.
What the Left Is Saying
Progressives and teachers' unions have long opposed federal expansion of school choice programs, arguing they divert resources from public schools that serve the majority of American students. The National Education Association and other labor organizations have called such programs a threat to neighborhood schools.
Critics of the Education Freedom Tax Credit argue that federal tax credits for private school expenses effectively subsidize private education at the expense of public school systems. They contend that low-income students and those with disabilities are often left behind in states that expand school choice, while wealthier families benefit most from tax credit scholarships.
Some progressive lawmakers have also raised concerns about accountability in private schools that receive scholarship funds, noting that unlike public schools, many private institutions are not subject to the same civil rights and accessibility protections. Additionally, opponents argue that redirecting education funding through tax credits reduces the tax base available for public services.
What the Numbers Show
According to AFPI's analysis, 23 states that do not participate in the Education Freedom Tax Credit could forgo nearly $23 billion between 2027 and 2029. The projection estimates more than 4.1 million scholarship opportunities could be lost during that period.
Under the policy, taxpayers can receive up to $1,700 in dollar-for-dollar federal tax credits for donations to scholarship-granting organizations that fund K-12 expenses including private school tuition, homeschooling, tutoring and special needs services. However, only students in participating states are eligible to benefit.
An unusual feature of the program is that taxpayers in states that opt out can still claim the federal tax credit — but their contributions are redirected to organizations in other states, effectively sending education funding elsewhere. Currently, 28 governors have opted into the program.
Data from states with existing school choice programs shows significant demand: Texas received 250,000 applications for a program accommodating about 80,000 students, while Tennessee saw over 50,000 applications for a 20,000-student capacity program.
The Bottom Line
The Education Freedom Tax Credit remains a polarizing policy as states weigh whether to participate. Supporters argue the program expands educational options without straining state budgets, while critics contend it undermines public school systems and primarily benefits wealthier families.
The America First Policy Institute's calculator aims to influence state-level decisions by showing potential funding losses. As more states consider joining the program, the debate over school choice is likely to intensify ahead of the 2028 election cycle. Parents and educators in non-participating states may increasingly push their governors to opt in as awareness of the program grows.