Public Schools First NC Urges North Carolinians to Reject the Federal Voucher Program

The federal voucher program scheduled to start in 2027 will divert essential funds from public accountability.

RALEIGH, NC, UNITED STATES, October 8, 2026 /EINPresswire.com/ -- On October 1, the U.S. Treasury Department released regulations for the federal tax credit voucher program (Federal Scholarship Tax Credit - FSTC) that was slipped into the “One Big Beautiful Bill Act” and pushed through reconciliation. The program is a dollar-for-dollar federal tax credit, up to $1,700, for an individual donation to a scholarship-granting organization (SGO), which is allowed to keep up to 10 percent of the donation and distribute the rest as educational “scholarships” (Families earning up to 300 percent of their area median gross income are eligible to receive a voucher).

PSFNC urges North Carolinians to reject the federal voucher program: North Carolina legislators were wrong to opt into this fiscally disastrous program that will primarily benefit private schools while leaving few avenues for public schools to use the funds. This tax credit program allows the federal government to subsidize private education using public taxpayer dollars. It fails to adequately provide equal opportunities for public school students, and it disproportionately benefits the wealthy.

The NC General Assembly passed legislation (and overrode Governor Stein’s veto) to opt North Carolina into the new federal voucher program before waiting for final program rules to be published. Now that the rules are published, we can confirm that this program prioritizes sending public dollars to private and religious schools, including schools that freely discriminate. The regulations fail to protect equal access to a high-quality education for all students by creating a system that favors directing funds to private schools and their students.

The proposed federal guidelines explicitly prohibit states from imposing stricter regulations on Scholarship Granting Organizations (SGOs) than the minimal requirements established by the original federal statute (passed in July 2025). thereby promoting the use of vouchers without placing any requirements on how the organizations collecting the money operate. In other words, SGOs have authority over the funds and how they are distributed, not states. SGOs get to decide which students receive vouchers.

States cannot block money from flowing into schools with poor fiscal or academic records or with discriminatory admissions policies. They cannot require public reporting on how funds are used or which students are served. They cannot add safeguards against waste and fraud. Because states cannot establish or enforce additional guardrails, states will be powerless to prevent these federal voucher funds from financing segregation and discrimination against students and families.

The federal voucher program only pays for services that schools are already charging for in the school program. This does not benefit public schools. Public schools cannot and do not charge for educating our children. Public schools should NOT have to shift from providing services at no cost, to charging a fee for the same services to receive this federal benefit. Public schools will likely receive very little if any of the voucher funding.

The regulations allow “scholarships” for public school students to cover services such as tutoring or extra special education services that are not provided by public schools at no cost. However, public schools may not receive the funds directly. Instead, a separate entity must be established to provide the service (e.g. tutoring), students (families) must apply to an SGO for a voucher to pay for the service, and the tutoring company receives the payment. This will be a cumbersome process for many families and will leave out students who need help but cannot participate in the program.

At this point, the Treasury has not yet released detailed guidance on the full scope of expenses that will be eligible or prohibited under the program. When the guidance is released, North Carolina may find out that virtually any spending that makes its way to public schools or districts has been disallowed.
North Carolina is registered for the program for 2027 because the NCGA forced NC to participate despite Governor Stein’s objections and veto. However, states must opt in each year, so legislators elected in 2026 will have to decide to OPT IN or OUT in 2028. We encourage all North Carolinians to urge their lawmakers and Governor Stein to stop this harmful federal voucher program as soon as possible.

In summary, the federal voucher program does not protect the civil rights of our students, it does not have safeguards for fraud or waste, it does not promote a high-quality education for all students, and it does not benefit public schools. This program clears the way for private schools and wealthy programs to receive public tax dollars with little to no accountability.

We also ask you to urge your members of Congress to repeal the voucher legislation. Join the millions of Americans who treasure public education and recognize this voucher program for what it is—a stealth attempt to destroy our public schools.

Heather Koons
Public Schools First NC
info@publicschoolsfirstnc.org
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