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For 27 years, the BASIC Fund, a nonprofit, has awarded scholarships to help families in nine Bay Area counties in California to send their children to private school. CEO Rachel Elginsmith likes to collect testimonials from parents about what the financial assistance means to them. 

鈥淧rivate school gives us peace of mind,鈥� Rolando Zamora, a father of two, wrote to her. 

With a family of six living on one income, Chris Meija said the scholarship 鈥渃ertainly helped ease some of the financial burden.鈥�

Organizations like the BASIC Fund, many of which are located in blue states, have operated out of the spotlight, quietly raising money from private donors to support kids from lower-income families. But now, with recent passage of the first-ever for private school choice, part of President Donald Trump鈥檚 鈥淥ne Big Beautiful Bill,鈥�  they could soon be thrust into a public debate over the next phase of the school choice movement.

鈥淲e鈥檝e been much more focused on just trying to help families and don’t want to get into the political fray, necessarily,鈥� Elginsmith said.  This fall, the BASIC Fund will help 3,100 students to attend 260 private schools. But with the federal tax credit coming in 2027, she can鈥檛 resist thinking about reaching more of the 300 to 500 applicants each year who don鈥檛 receive funding, she said. 鈥淲e’re not against public schools; we just think that they aren’t the best thing for everybody.鈥�

Ever since Trump gathered with Republicans on the South Lawn of the White House on July 4 to sign the bill, commentators have focused on one central question: What will blue states do?  The Treasury Department still has to write rules for the program, but overall, the law allows taxpayers to get a dollar-for-dollar credit, up to $1,700, if they donate to a scholarship granting organization, like the BASIC Fund. Because the legislation lets states choose whether to participate, many assume that those under Democratic control will remain firmly opposed to anything that looks like a voucher. But Colyn Ritter, a senior research associate at EdChoice, an advocacy organization, said he 鈥渨ouldn鈥檛 argue with anyone鈥� who thinks states with existing scholarship programs would be in the best position to opt in. 

BASIC is among several groups affiliated with the Children鈥檚 Scholarship Fund in New York, which annually helps about 7,000 students from low-income families across New York City attend private school. The nonprofit has partners that grant scholarships in Oregon, Massachusetts and New Jersey, to name a few other blue states. 

鈥淭hose folks presumably have relationships with some state policymakers, which we think could be helpful,鈥� said John Schilling, a consultant and adviser to the conservative American Federation for Children, a school choice advocacy group. He worked to keep the tax credit in the Republicans鈥� reconciliation bill, but is now shifting his attention to the states. Listing other Democratic strongholds, like Massachusetts and Illinois, he said, 鈥淭hese are places where parents desperately need some additional options.鈥�

Supporters of the tax credit describe it as 鈥溾�� for education and argue it鈥檚 misleading to call it a voucher because the scholarships are funded by private donations 鈥� not federal funds directly. Still, tax experts predict the could range anywhere from $8 billion to more than $100 billion per year, and opponents hope to convince political leaders and the public that the program is a bad idea. 

鈥淲hether you call it a voucher or a scholarship program 鈥� this is what鈥檚 going to happen,鈥� former Education Secretary Miguel Cardona warned last month on a media call. 鈥淧ublic education dollars will be siphoned off to pay for vouchers for private schools that don’t have to accept all students. If students in many of these private schools struggle, they’re going to be sent back to these underfunded public schools.鈥�

Others argue that private schools participating in choice programs aren鈥檛 subject to the same accountability and anti-discrimination requirements as public schools. 

鈥淭here are no testing requirements, no standards, no teacher certification mandates or any other mechanisms to ensure that participating private schools would provide an adequate education to students,鈥� said Patrick Cremin, a staff attorney for the Education Law Center, which is opposed to the program. 

He doesn鈥檛 want blue states to be tempted by the fact that the federal program would also allow groups like BASIC to create scholarships for students in public schools. Families could put the money toward tutoring, books, therapies and technology 鈥� to name a few uses. Despite their 鈥渃onstitutional obligation to fund public schools,鈥� there鈥檚 a risk, Cremin said, that states would shortchange districts if they expect taxpayers鈥� donations to cover some expenses.

Powerful political forces鈥�

Because the tax credit doesn鈥檛 take effect for another year and a half, the debate over opting in could surface in the 38 states where voters will elect governors this year and next. 

For now, choice advocates in California, where voters are expected to elect another Democrat when term-limited Gov. Gavin Newsom leaves office, aren鈥檛 hopeful about their prospects. Lizette Vallas, who runs a in Los Angeles, blamed the . 

鈥淭he California Teachers Association is one of the most powerful political forces in the state. Any legislation or opt-in mechanism that diverts funding 鈥� even indirectly 鈥� from public schools to private or nontraditional models is almost always met with unified resistance,鈥� she said. 鈥淲hile federal policy is nudging open the door for school choice, California continues to reinforce the frame around its own tightly held model.鈥�

David Goldberg, the association鈥檚 president, 鈥渁 distraction.鈥� 

In other states, like and , the race for governor is , meaning the federal tax credit has the potential to become a central campaign issue, said Joshua Cowen, a Michigan State University professor and Democrat who is also running for Congress.

The bill that included the tax credit is already causing budget challenges for state leaders, he said. Michigan, for one, is facing in extra costs in 2026 because the federal package cut tax rates and shifted some nutrition and health care spending to states.. 

As a Democrat, Cowen said his party needs a platform that focuses on prioritizing support for public schools, but he said even governors who have been dead set against vouchers may have to consider how the tax credit could support programs like afterschool tutoring. 

鈥淪tates like mine are going to be desperate for new sources of revenue,鈥� he said. 鈥淚 could certainly see governors鈥� offices taking a look at this program 鈥� not because they necessarily love it 鈥�  but because you’ve got revenue problems caused by the same exact bill that’s authorizing this.鈥� 

鈥楩amilies who are pinched the most鈥�

Observers speculate that Pennsylvania could be the first blue state to opt in. came close to supporting an education savings account bill in 2023, and the state already offers two tax credit programs for corporations that donate to scholarships. 

A from the conservative Commonwealth Foundation showed that only about half of the students who applied for aid in Pennsylvania during the 2022-23 school year received it. Those figures, school choice advocates say, are further evidence that is soaring. 

Illinois, another Democrat-led state, had a tax credit scholarship program, serving about 15,000 students, until lawmakers allowed it to . Nonprofits and Republican lawmakers are now urging Gov. J.B. Pritzker to participate in the federal program. 

鈥淔amilies and kids have borne the brunt of the program ending with many being unable to continue at their school or having to give up on the hope of attending their dream school,鈥� said Bobby Sylvester, vice president of the Urban Center, a think tank. The tax credit 鈥渨ill cost Illinois nothing, but would make all the difference to the families who lost their scholarships.鈥�

While not as as Illinois, Colorado is the home state of ACE, another network of scholarship granting organizations. About $400,000 of the more than $11 million it awards in scholarships each year in the state goes to Mullen High School in Denver. The Christian Brothers, a Catholic congregation providing education to the poor, originally founded the school in the 1930s as an orphanage. Today, the 800-student Catholic school serves 鈥渟ome very rich kids and some super poor kids,鈥� said Raul Cardenas Jr., president and CEO.

The financial support from ACE, he said, has been especially helpful to middle-income families who otherwise wouldn鈥檛 be able to fit private school in their budget. Two years ago, when he reduced scholarship awards for families in that income bracket by just $1,000, several left the school. This coming school year, leaders, he said 鈥渨ere very intentional about addressing that gap,鈥� and if Colorado opts into the program, he would further expand financial assistance to those families.

鈥淚t’s always middle income families who are pinched the most,鈥� he said. 鈥淚 see this as a way to really help them.鈥�

Voters in the Centennial State have resisted private school choice. Colorado is one of where the issue failed at the ballot box last year. A constitutional amendment would have created a right to the full array of options, including private schools and 鈥渇uture innovations in education.鈥� The vote was extremely close, 50% to 49%. In two previous state elections, voters more decisively rejected vouchers, by a 2-1 margin in and with 60% of the vote in . 

Colorado might only opt into the federal program if the Treasury Department allows states the flexibility to 鈥渃arefully regulate鈥� scholarship granting organizations, said Kevin Welner,  an education researcher at the University of Colorado Boulder.

Gov. Jared Polis, or his successor in 2026, could find the tax credit acceptable if 鈥渟tudents in public schools receive the same level of benefits鈥� as those in private schools, he said. 

But Schilling, with American Federation for Children, would have a problem with states that approve organizations providing financial support to public school kids, but not those that supplement tuition at private schools.

鈥淏lue state governors who want to remain in the good graces of the teachers鈥� unions may say 鈥極K, I’ll opt in but we only want to serve students through public schools,鈥� 鈥� he said. Regardless of which students the nonprofits want to serve, states, he said, 鈥渟houldn’t be picking and choosing.鈥� 

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