RICHMOND, VA – Governor Glenn Youngkin announced that Virginia was the first state in the nation to opt in to the Education Freedom Tax Credit, also known as the Federal Scholarship Tax Credit (FSTC), a new federal program that incentivizes individuals and companies to donate funds to provide scholarships for K–12 students to expand school choice. On January 1, 2026, Virginia formally elected to participate in the FSTC.
“Virginia is proud to lead the nation once again as the first state to opt in to the Education Freedom Tax Credit,” said Governor Glenn Youngkin. “This decision expands school choice for families across the Commonwealth by opening access to federally tax credit-funded scholarships, empowering parents and helping ensure students, especially those with the greatest needs, can choose the learning environment that is right for them. Thank you President Trump, Secretary Bessent, and our congressional leadership in the House and Senate for delivering school choice across America.”
“Every child, no matter their zip code, deserves a great public, charter, or private school their parents choose for them. President Trump’s Working Families Tax Cuts delivered on this and the largest expansion of education freedom in history,” said United States Treasury Secretary Scott Bessent. “I am pleased to support Governor Glenn Youngkin, who announced that Virginia has opted into the program. Virginians will join the many Americans who are excited about the Education Freedom Tax Credit and supportive of educational choice.”
Beginning January 1, 2027, the Education Freedom Tax Credit program allows taxpayers to claim a dollar-for-dollar nonrefundable federal tax credit of up to $1,700 that fund K-12 scholarships through approved Scholarship Granting Organizations (SGOs). Scholarships funded through the Education Freedom Tax Credit can be used for tuition, tutoring, educational therapies for students with disabilities, and other education-related services that help families, including those enrolled in public schools, choose the learning environment that best meets their children’s needs.
As part of Virginia’s opt-in, Governor Youngkin submitted a letter to the U.S. Department of the Treasury and the Internal Revenue Service identifying the Commonwealth’s initial list of eight Scholarship Granting Organizations—including two Virginia-based and six national organizations—that will serve Virginia students and families when the program commences in January 2027. The letter can be viewed here.
The initial list of Scholarship Granting Organizations submitted to Treasury includes:
- Step Up, Virginia! (statewide)
- Torah Education Scholarship Fund (statewide)
- The Endowment Project Foundation (national)
- American Federation for Children (national)
- Children’s Scholarship Fund (national)
- Reficio (national)
- ACE Scholarships (national)
- EducationSuperHighway (national)
This initial list may be updated as additional federal guidance becomes available.
“We know that one-size-fits-all education doesn’t work. This is why Governor Youngkin has prioritized more quality options for families to choose from – whether it be by expanding access to college course through dual enrollment and CTE opportunities that lead to industry-recognized credentials, or our growing network of lab schools,” said Secretary of Education Aimee R. Guidera. “Participation in the Education Freedom Tax Credit will make it possible for our families who don’t have the financial means to now have the ability to participate in tutoring and other enrichment programs with a fee through our public schools, as well as getting tuition assistance to attend a private school if that is the best place for their child. Virginia benefits when every student is in a learning environment in which they thrive.”
The Commonwealth will continue to coordinate with Treasury and the Internal Revenue Service as additional implementation guidance becomes available and will work with participating scholarship-granting organizations to support compliance, transparency, and effective program administration.
Expanding Options for Families in Virginia
Since Day One, the Youngkin Administration has focused on moving away from a one-size-fits-all approach to education in Virginia by expanding options and reimagining classroom practice to better support student success. By opening 15 Lab Schools led by partnerships between colleges, local school divisions, employers and other community organizations that tear down the walls between schools and the world around them; restructuring our Charter and Governor’s School processes reflecting national best practices leading to the first approved Governor’s School since 2009; providing seat time and transportation flexibilities to ensure access to student-centered outcomes and opportunity; and providing dual enrollment to every high school student in the Commonwealth, Governor Youngkin has delivered on this promise.
The Governor’s decision to have Virginia participate in the Education Freedom Tax Credit further builds on this work by creating additional learning options for families, including public school families, that need them most and reinforcing the Commonwealth’s commitment to a student-centered education system.
About the Education Freedom Tax Credit
The Education Freedom Tax Credit, also known as the Federal Scholarship Tax Credit (FSTC), is a federal tax credit for individual and corporate contributions to Scholarship Granting Organizations (SGOs), which in turn provide scholarships to support K–12 educational expenses for eligible students. For a contribution to qualify for the federal credit, the SGO must be listed by a participating state for the applicable calendar year. The program begins in 2027.
Additional guidance on state participation and federal requirements is available from the United States Department of the Treasury and the Internal Revenue Service.
