A new federal law inside H.R. 1 creates the largest expansion of private school vouchers in U.S. history. Beginning in 2027, the Educational Choice for Children Act offers dollar-for-dollar federal tax credits for "donations" to private voucher organizations — so-called "scholarship granting organizations," or SGOs. A donor who gives to an SGO can claim up to $1,700 back on their federal taxes, and most of that money is expected to flow to private and religious school tuition.
In short, the program lets tax dollars that would have funded public services instead pay private school tuition for other people's children — with none of the transparency or accountability the public expects in return.
A state only takes part if its governor opts in, and Governor Hochul has signaled her intent to opt New York into the program.
Here's what families, educators, and voters should understand about how these programs actually work.
The Basics on Private School Vouchers
What is a school voucher?
A voucher redirects public tax dollars to pay for private school tuition. The branding varies — "Education Savings Accounts," "tax credit scholarships," "school choice" — but the mechanism is the same: public money flowing to private schools.
Who is eligible under the federal program?
Eligibility extends to families earning up to 300 percent of their area's median gross income — more than $500,000 in parts of New York. This is not a program designed to assist struggling families, but rather it’s structured primarily as a tax break for the wealthy and a way to divert public funds to private organizations.
Where does the money actually go?
Not directly to families. Funds flow to private Scholarship Granting Organizations (SGOs), which decide who receives the money. These organizations are not required to be transparent or accountable to the public, and the private schools they fund can turn away students based on disability, academic record, behavior, religion, gender, or any other criteria they choose.
Where did school vouchers come from?
Vouchers were not invented to expand opportunity for all students or choice for families. They were invented to avoid integration. The first programs, called "tuition grants," emerged across as part of the coordinated campaign to evade school desegregation required by the Brown v. Board of Education Supreme Court decision in 1954. Between 1954 and 1965, Southern states passed as many as 450 laws and resolutions to block or delay desegregation, including measures that routed public money to all-white private "segregation academies" and gave white families tuition subsidies to leave newly integrating public schools.
Sadly, that history has a legacy that lasts to the current day: Nearly 300 schools that began as segregation academies still operate today, still serve majority-white student bodies and now collect modern voucher funds. Today's voucher proponents no longer state segregationist aims, but the effect the data shows is much the same, which is why the origin matters for any state weighing whether to opt in.
How Vouchers Work in Practice
Will vouchers help families who can't currently afford private school?
For most families, no. Vouchers rarely cover the full cost of tuition, and private schools can reject any applicant.
When Iowa launched vouchers, private schools raised prices 21–25 percent, putting them further out of reach for low-income families. The pattern elsewhere is telling: in Arkansas, 95 percent of voucher recipients were already enrolled in private school, and in Indiana, recipients were more likely to earn over $100,000 than under $50,000. In practice, vouchers primarily subsidize families who have already left — or never used — the public system.
Do students get better academic results with vouchers?
The research points the other way, with a few notable examples:
- In Louisiana, voucher students were 50 percent more likely to fail math.
- Indiana saw significant learning losses that persisted for years.
- In Ohio, voucher students performed worse than their public school peers.
And private schools receiving voucher dollars are exempt from most public school accountability standards, with no required financial audits or transparency.
What happens to public school budgets when students leave with vouchers?
Public schools lose the full per-pupil funding when a student leaves, but their fixed costs — buildings, buses, utilities, staff — don't shrink with one fewer student. That forces cuts to teachers, programs, and support services for the majority of students who remain.
For example, in Cleveland, a 5 percent enrollment loss translates to $654 less per remaining student and $31 million in total harm to the district. The school doesn't get smaller; it gets hollowed out.
Are voucher programs affordable for taxpayers?
History says they grow far beyond projections and end up costing taxpayers far more than originally promised. Some notable examples:
- Arizona's universal vouchers were projected to cost $65 million; the first-year cost was $332 million, and by fiscal year 2024 it had reached $738 million — 1,229 percent over budget. It became a primary driver of a $1.4 billion state shortfall, forcing cuts of $333 million from water infrastructure, $54 million from community colleges, and tens of millions from highway repairs.
- Indiana's program started at $15 million and now costs nearly $500 million a year, projected to top $600 million by 2027.
- Ohio's is approaching $1 billion annually.
These programs don't stay small — they grow without a cap and destabilize entire state budgets.
Does the public actually support vouchers?
Support depends heavily on how the question is framed. Polls showing strong "school choice" support typically don't mention the cost to public schools. When voters learn the trade-offs — especially how vouchers negatively affect public schools — support drops sharply.
- A national All4Ed poll found that two-thirds of voters prefer increasing public school funding over vouchers.
- In Texas, 65 percent of voters opposed a voucher program once they understood it would defund popular public schools.
Do vouchers help low-income and minority students achieve greater equity?
The evidence shows voucher programs tend to increase school segregation rather than reduce it. Affluent families are the likeliest to leave public schools and take per-pupil funding with them. Over time, this concentrates students in poverty in public schools with less and less funding over time. As programs expand, recipients skew whiter and wealthier.
When North Carolina removed its income limits, white students rose to 73% of voucher recipients while Black students fell to 11%, in a public school population that is 42% white and 24% Black.
After South Carolina dropped its public-school enrollment requirement, white recipients jumped from 30% to nearly 70% in a single year, while Black and Hispanic students fell from 54% of participants to just 26%.
The reason these programs sort students this way is built into how private schools operate. Unlike public schools, private schools are not bound by the same civil rights laws that public schools must follow, so they can legally exclude students based on religion, disability, academic record, behavior, sexual orientation or gender identity, or for any other reason they choose. Some even require families to waive their children's disability protections as a condition of enrollment.
In short, the private schools that receive these vouchers can reject any child who doesn't fit their business model — and the students most likely to be turned away are precisely the ones who are costliest to serve: children with disabilities, English learners, and those with greater needs. By contrast, our public schools are duty-bound to educate and support every child who walks through the door.
Could public school supporters create their own SGO and use this program to their advantage?
In theory, yes. But in practice, it's very unlikely to work, and it would be a mistake to count on it.
This federal voucher program deck stacks the deck toward private schools by design. The program was built to channel money to private and religious education, and private schools already have the organizations, donor networks and administrative systems in place to start drawing down these funds the moment the program opens.
Tapping public subsidies is already part of how many of them operate — they're positioned to move first and move fast. Public school supporters, by contrast, would be standing up new SGOs from scratch. And the federal rules being written may close the door entirely: the U.S. Treasury has signaled that its regulations could bar states from directing this money toward public school students and from controlling which SGOs operate within their borders.
Even if it were workable, it would be a convoluted way to solve a simple problem. Funneling public dollars through a private tax-credit program and a private middleman just to reach public school students is a long way around a goal we can meet directly: by funding public schools properly, through the channels built for exactly that purpose.
Which is the real point: public dollars should go to public schools — directly and accountably — not on a detour through a program designed to drain them.
Aren't those who oppose this federal program just opposed to school choice?
No. This isn't about whether private schools should exist, or whether families may choose them — they do, and they may.
It's about a specific bargain: when public tax dollars flow to a school, the public has a right to accountability for how that money is spent and assurance that the school serves students fairly. Voucher-funded private schools take the public money but are exempt from the transparency, financial audits, and civil rights protections that every public school upholds. And they remain free to turn away any child that doesn’t fit their business model.
Redirecting public taxpayer dollars to institutions that don’t answer to taxpayers and don’t serve entire communities isn’t school choice; it’s a misappropriation of public funds and a breach of the public trust.
The Bottom Line
Opting into the federal voucher program would launch a massive, uncapped privatization effort at the expense of the public schools that serve the overwhelming majority of New York's students. The evidence runs one way: on cost, student outcomes, equity, and public opinion, vouchers fail to deliver — while draining the very public schools who serve entire communities and welcome every child.
This was never about whether families may choose private schools; they always could. It's about whether public dollars should flow to institutions that take taxpayers' money while answering to no one. They shouldn't. New York's tax dollars belong in New York's public schools that are open to every student and accountable to every community.
Public dollars should go to public schools, period.