28 States Join Federal Education Tax Credit Program as Unions Oppose Expansion

A new federal tax credit for private school scholarships, included in the 2025 One Big Beautiful Bill Act, has been adopted by 28 states, with most participation coming from Republican-led states and strong opposition from national teachers unions.

The divide highlights a growing battle over education funding, parental choice, and the influence of unions in shaping public school policy.

The tax credit, which takes effect in January 2027, allows individuals to claim up to $1,700 for contributions to Scholarship Granting Organizations, which parents can use for private school tuition, fees, and other educational expenses. States must opt in to participate, and according to the IRS, 25 of the 28 states that have joined are led by Republicans, while only Colorado, New Hampshire, and Virginia are Democratic-led states participating.

Partisan Divide Over Participation

The partisan split in state participation has drawn attention from education advocates and union leaders. The American Federation of Teachers (AFT) and the National Education Association (NEA), the two largest teachers unions, have publicly opposed the program. In an open letter to Democratic governors, union leaders called the tax credit a "Trump private voucher scheme" and argued that "public education ... is the foundation of a thriving democracy," describing vouchers as a betrayal of that principle.

"Public education ... is the foundation of a thriving democracy."

— Leaders of the American Federation of Teachers and National Education Association

Union leaders contend that expanding private school choice undermines public schools and restricts resources for the majority of students. The NEA and AFT have urged Democratic governors not to opt in, but three Democratic-led states have joined regardless. Among the 25 states with the strongest teachers unions, as ranked by a Thomas B. Fordham Institute study, only Ohio and West Virginia have opted into the new program.

Union Spending and Political Influence

A May 2026 study by the Network Contagion Research Institute and the Gevura Fund, affiliated with Rutgers University and the University of Maryland, reported that combined NEA spending on political activities, lobbying, and contributions to outside organizations totaled approximately $175 million in FY2025, nearly four times the $45 million spent on direct member representation. The study also found that 90% of NEA candidate-directed spending and nearly all of AFT’s has consistently gone to Democrats over decades.

Union websites, according to the source, focus heavily on progressive political issues, with little emphasis on core academic subjects such as reading, math, and science.

U.S. Education Performance and Spending

International assessments continue to show U.S. students lagging behind peers in other developed countries. The most recent Programme for International Student Assessment (PISA) results, administered by the Organization for Economic Co-operation and Development (OECD), ranked the United States 18th in math, science, and reading among 80 countries, behind nations such as Poland, Czechia, and Denmark. Top performers included Singapore, China, Japan, Taiwan, and South Korea.

Despite this, U.S. education spending per student in 2025 was $20,387, compared to the OECD average of $15,022. U.S. education spending as a share of GDP was 5.8%, higher than the OECD average of 4.7%. Singapore, which led in PISA scores, spent just 2.2% of GDP on education in 2024, according to the World Bank.

Analysis from the Cato Institute found that inflation-adjusted U.S. education spending per student rose 140% from 1971 to 2019, while test scores for 17-year-olds in math and reading showed little change over the same period.

Responses and Next Steps

Supporters of the new tax credit argue it expands education freedom and gives parents more control over their children's schooling. Critics, led by the teachers unions, maintain that the program diverts resources from public schools and undermines the public education system. Democratic officials in most states have not joined the program, and union leaders continue to lobby against further expansion.

The tax credit program is scheduled to begin in January 2027, with state participation subject to ongoing political and policy debates.