State and Legislative Updates from SEF’s Government Affairs Team

The weeks of 9/28 – 10/9

Greetings all,

Late last week, the U.S. Department of the Treasury announced long-awaited regulations for the Federal Scholarship Tax Credit (FSTC), a federal education tax credit that pays for specific services for students attending public and private schools. Officially beginning January 1, 2027, the FSTC program will allow individual taxpayers to receive a federal tax credit of up to $1,700 (married couples $3,400) for qualifying contributions to approved scholarship granting organizations, or SGOs, that provide education-related services in states that opt in. As of September, at least 30 states have indicated their intention to participate in 2027.

The Treasury released temporary regulations for 2027 and a proposed rule that would govern future years. The public will have until December 1, 2026, to submit comments. A public hearing on the proposed rule is also scheduled for Tuesday, December 15, 2026, at 10 AM ET. To participate in the public hearing, Treasury is asking interested parties to submit a speaker request and outline of their comments by December 1. There are many resources and articles on this subject. We have listed some directly below and more near the end of this newsletter.

Additionally, Lincoln University students and alumni sued the state of Missouri over claims of unequal funding, seeking $550 million to address what they allege are decades of underfunding at the state’s historically Black land-grant University.

As always, we hope you find this newsletter helpful and meaningful in your work to advance educational opportunity for students of color and students from low-income families across the South.

Resources on the Federal Scholarship Tax Credit Program

  • What does the new Federal Scholarship Tax Credit program mean for states? – The U.S. Department of the Treasury has released regulations for the new Federal Scholarship Tax Credit for donations to scholarship granting organizations created by the One Big Beautiful Bill Act. Together, the statute and regulations provide the clearest picture yet of how the program would operate beginning in 2027. (Learning Policy Institute) Read More 
  • Unpacking the new Federal Tax Credit Scholarship regulations – The AASA and EducationCounsel webinar breaks down the key provisions of the regulations, highlights what they mean for public education stakeholders, and examines how the new rules may affect the ability of public-school-focused Scholarship Granting Organizations (SGOs) to participate in the tax credit marketplace. (The School Superintendents Association) Read More
  • Federal voucher program regulations released! A PFPS webinar with everything you need to know right now – The PFPS webinar overviews the U.S. Treasury Department’s proposed regulations to implement the federal private school voucher program. They explain key aspects of the regulations and outline next steps for public education advocates. (Public Funds Public Schools) Read More
  • What You Need to Know About the Regulations for the Federal Tax Credit Private School Voucher – On October 1, the U.S. Treasury Department issued regulations on the federal tax credit voucher program created by the One Big Beautiful Bill Act. Please review the coalition’s main takeaways. (National Coalition for Public Education) Read More

The Latest From SEF

  • ICYMI! Our recent webinar, Public School Students First, Ensuring the New Federal Tax Credit Works for Public School Students – In September, SEF President and CEO Raymond C. Pierce and education leaders discussed the FSTC’s potential impact on public school students, unanswered questions, and key considerations for implementation. Watch the webinar and explore shared resources here.
  • Our resource hub on the Federal Scholarship Tax Credit program to expand opportunity for public school students – We have developed a resource page collecting critical information regarding the Federal Tax Credit Scholarship program to ensure public school students benefit. You can access the resource page here.
  • SEF’s President and CEO, Raymond Pierce, published an op-ed in the Chattanooga Times Free Press: When Congress created a federal tax credit for scholarship contributions, skepticism gave way to a closer look at how the law could direct resources to public school students. Read the full op-ed here.
  • SEF’s President and CEO quoted in The Washington Post article on the Federal Scholarship Tax Credit – The Trump administration took a major step toward launching the nation’s first federally funded school voucher program, set to steer billions of tax dollars to private schools — but also, perhaps, to public school students. “This is an opportunity to bring additional resources to students, particularly Black students and students from low-income communities who have historically had less access to educational opportunity, while also bringing evidence and accountability to how those resources are used, ” said Raymond Pierce. Read the full article here.
  • SEF’s Senior Director of Public Policy and Advocacy, Fred Jones, quoted in Chalkbeat –  A growing number of organizations are working to direct federal tax credit funds toward public school students. Fred Jones highlights how the 15 states participating in the FSTC program could redirect resources to better serve low-income students and students of color. Read the full article here.

State Updates

Alabama

  • Four more Alabama school districts released from federal desegregation oversight – Four more Alabama school districts have been declared unitary and released from decades-old federal desegregation cases in the last week. (Alabama Daily News) Read More
  • Alabama public four-year college enrollment mostly steady with some key movements – Enrollment at Alabama’s public four-year universities is mostly steady this fall, as growth in undergraduate enrollment was offset by a decline in graduate students. (Alabama Daily News) Read More

Arkansas

  • Arkansas lawmakers adopt recommendations for per-student school funding – The Joint Education Committee recommended that Arkansas increase the per-student funding directed to public schools by more than 2% over the next two years. (Arkansas Advocate) Read More
  • U.S. Representative French Hill and state HBCU leaders to discuss federal funding – U.S. Rep. French Hill and leaders from the state’s historically Black colleges and universities held a press conference to discuss additional federal funding for HBCUs and efforts to strengthen the institutions. (KARK.com) Read More
  • We’re reporters, not teachers. We were able to start private schools anyway. – In Arkansas, all it took to establish a private school was filling out a form on a state website, $45, and the purchase of an American flag. Having no experience running a school or even teaching didn’t stand in the way of founding schools. (ProPublica) Read More

Delaware 

  • School accountability proposal faces pushback as DOE seeks feedback – With the Department of Education poised to invest millions of additional dollars into Delaware schools with a new school funding formula, State Education Secretary Cindy Marten says the state needs to track what that investment produces. (Delaware Public Radio) Read More

Florida

  • Free speech groups warn new education orders will expand book bans – A national free speech group is concerned that a new directive from the state’s education chief could worsen the state’s book censorship problem. (Tallahassee Democrat) Read More

Georgia

  • Georgia could owe HBCU $603 million – For three decades, Georgia and other states collectively underfunded their historically Black land-grant universities by roughly $13 billion, according to a 2023 federal analysis. (Atlanta-Journal Constitution) Read More

Kentucky

  • Kentucky’s Enrollment Squeeze – By 2040, Kentucky will need about 53% of its public high school graduates to enroll directly in a Kentucky college, up from 47.5% for the class of 2024, just to maintain current enrollment levels of traditional-age students. (The Council on Postsecondary Education) Read More
  • Teachers in a Third of Kentucky School Districts Received No Raise This Year – One in three school districts (58 of the state’s 171) provided no raise for teachers and other certified employees this school year, according to an annual report released by the Kentucky Department of Education. (Kentucky Center for Economic Policy) Read More

Louisana

  • Carrying the Cost: How Louisiana Providers Are Covering the Financial Burden of Child Care Report – The findings suggest that providers want to reinvest in staff and programs but currently lack the resources to do so. Sustained public investment in ECE, and in the educators who provide it, is the only way to build a robust ECE system in Louisiana that can serve all children and their working families. (Louisiana Policy Institute for Children) Read More
  • State improves Advanced Placement (AP) scores, but many students can’t access AP courses – More high school students are earning high marks on Advanced Placement exams, yet many lack access to the college-level courses. (The Advocate – Subscription Required) Read More
  • New Orleans working to get cash payments for new parents – New Orleans leaders are exploring how to provide direct cash payments for new parents. The payments could combat poverty, which health officials say contributes to high maternal mortality rates and other poor family health outcomes. (Axios) Read More

Maryland

  • How Successful is the Maryland Future Blueprint Five Years Later – The state is now halfway through its ambitious 10-year plan to revamp education, yet questions continue about whether the sweeping Blueprint for Maryland’s Future is making the grade. (WBFF News) Read More

Missouri

  • As Missouri’s Student Population Shrinks, Schools Face a New Demographic Reality – Total enrollment across Missouri schools has fallen over the last quarter-century, a gradual slide that has accelerated since the COVID-19 pandemic. And with birthrates falling below the replacement level, as in other states, most local leaders will have to rely on an aging tax base to pay for schools educating fewer and fewer children. (The 74) Read More
  • OPINION: When will adequately funding Missouri public schools become a legislative priority? – Even when Missouri lawmakers fund public schools in accordance with the state’s foundation formula, the level is still inadequate to meet the needs of schools across the state. The practice of selling our public schools short has become the pattern — year after year, irrespective of the need. (Missouri Independent) Read More
  • Private donors are funding Missouri education board’s commissioner search, strategic plan – The State Board of Education has begun work searching for a new commissioner and crafting a new strategic plan with funding for the projects anticipated to come from philanthropic sources. (Missouri Independent) Read More
  • Rural Missouri literacy coaching program boosts scores, inspires statewide model – The Missouri Rural Schools Early Literacy Collaborative brought in literacy coaches to support 50 kindergarten and first-grade teachers with their reading instruction, meeting monthly in person and virtually. The collaborative’s five school districts observed jumps in student reading proficiency by the end of the program’s first year. (The 74) Read More
  • Lincoln University students, alumni sue Missouri over unequal funding – A lawsuit filed in U.S. District Court seeks $550 million to address what it alleges are decades of underfunding at Missouri’s historically Black land-grant university. (Missouri Independent) Read More

North Carolina

  • State received $75 million for childcare centers after Helene. Providers haven’t received funds – In February, the state received $75 million in federal relief funding for child care centers that experienced physical and financial damage from Hurricane Helene. However, those funds have yet to leave state coffers, leaving early learning staff to wonder if they will ever receive the aid. (Citizen Times) Read More
  • State school finance officials call for more flexibility in funding rules – School finance officers told a state commission that the state’s complicated funding rules and delayed state budget decisions make it harder for districts to plan and spend money where they need it most. (NC Newsline) Read More
  • Some charter schools want NC to rerun test results. Why the state is saying no – Some North Carolina charter schools want the state to recalculate last school year’s test scores because they say they’ve been unfairly penalized by a change made by the state Department of Public Instruction. (The News and Observer) Read More

Oklahoma

  • Tulsa school closures part of statewide picture of enrollment decline – Tulsa Public Schools last week became the latest district to reveal a closure plan that leaders say is necessary to ensure financial stability. Oklahoma City Public Schools and other large, urban districts across the country have taken similar measures as a result of decreasing enrollment. (Oklahoma Voice) Read More

South Carolina 

  • State colleges can apply to offer new Pell Grants aimed at in-demand trades. So far, none have – Nursing and medical assistants, mechanics and commercial truck drivers, welders and construction equipment operators are among the careers newly eligible for federal education grants. But so far, no colleges and trade schools in the state have sought approval for training programs under the recently expanded Pell Grant program. (South Carolina Daily Gazette) Read More
  • SC expanding student loan forgiveness for teachers in effort to keep them in the classroom – South Carolina is spending $10 million to help more teachers pay off or erase their student loans. (South Carolina Daily Gazette) Read More

Tennessee

  • Should the state expand school vouchers? Gubernatorial candidates Blackburn and Green disagree – State voters are weighing whether school vouchers should expand as gubernatorial candidates Marsha Blackburn and Jerri Green take opposite sides. (The Tennessean) Read More
  • The Federal Scholarship Tax Credit: An Opportunity to Support Student Success in Tennessee – Beginning in 2027, the state will participate in a new program that could create a significant new source of funding for K-12 students and families in a variety of school settings, including traditional public schools, public charter schools, and private schools. (State Collaborative on Reforming Education) Read More

Texas 

  • From kindergarten to disciplinary school: Texas sends kids as young as 6 to harsh alternative campuses – State law requires school districts in Texas to have a disciplinary alternative education program, or DAEP, to send misbehaving students. Students 5 and younger are not allowed to be placed in these programs; however, state law places no limits on DAEP placements for any child age 6 or above. (The Hechinger Report) Read More
  • Special needs kids get more funding with state school voucher, but families can’t always find a school – While special education and school choice advocates saw the larger state voucher awards and prioritization as a win, several also rang the alarm that there wouldn’t be enough supply of special education services in the private sector to match demand. A 2023 Texas Tribune analysis of private schools with comprehensive special education programs showed San Antonio only had five, one of which is now closed. (San Antonio Report) Read More
  • How the state helped a private school chain’s AI tool get into public school classrooms – A Texas effort to bring AI tools into public schools began about a year ago with support from Education Commissioner Mike Morath. Despite the State Board of Education voting 10–3 against the charter, Morath and agency leaders could still help introduce Alpha’s AI model into public schools. (ProPublica) Read More

Virginia

  • Undergraduate enrollment at the state’s public colleges and universities remains steady despite steep declines in graduate students at some institutions – Undergraduate enrollment is holding steady at Virginia’s public colleges and universities even as some of the same institutions are grappling with steep graduate student declines and as enrollment across the state’s private colleges has dropped. (Cardinal News) Read More

West Virginia

  • State Board of Education president is among those being sued over education funding, but he agrees system is inadequate – The state school board president has consistently described his concerns about the adequacy of West Virginia’s school funding formula. The ACLU of West Virginia filed a lawsuit asking the state Supreme Court to determine that the state school funding formula is inadequate. The lawsuit names state legislative leadership, agency heads and the state board of education as respondents. (MetroNews) Read More

National/Federal Updates

Early Childhood Education News and Resources

  • Ten Years, Hundreds of Policies, Millions of Families – This report highlights how states transformed their systems of care over the last decade in the areas where transformation has been the most significant. (Prenatal-to-3 Policy Impact Center) Read More
  • Stanford Paper Highlights Research Supporting School–Early Childhood Zones and Hubs: A new paper from the Stanford Center on Early Childhood examines research on the importance of trust, social cohesion, and social capital in shaping children’s outcomes and highlights community examples of zones and hubs strengthening coordination among schools, early childhood programs, and family-serving organizations. (Stanford Center on Early Childhood) Read More

K-12 Education News and Resources

  • Trump, bucking Congress yet again, cancels $100 million for education – The Trump administration canceled nearly $100 million Congress appropriated for expanding college-level foreign-language instruction and helping transient U.S. agricultural workers get GEDs and go to college. The Government Accountability Office released a letter to congressional leaders affirming that President Donald Trump’s “pocket rescissions” are illegal, reaffirming its earlier opinions on the topic. (EducationWeek) Read More
  • 2026 state elections gearing up to impact education – Changes in political leadership influence how education policy is prioritized, created, and implemented in states and territories. As we look ahead to November, this year’s general elections are expected to have a tremendous impact on the education landscape across states. (Education Commission of the States) Read More
  • Students’ rights. State power. A model for action – The National Center for Youth Law’s Students’ Civil Rights Act is model legislation to help states protect students from discrimination and build the authority to enforce their rights. (National Center for Youth Law) Read More
  • Research Evidence Against Dismantling the U.S. Education Department: How to Support Students and Disabilities – This review provides an overview of the evidence about how private school vouchers have shaped educational experiences and outcomes for students with disabilities. (Education Law Center) Read More
  • Education Department wants grantees to ‘defend the spend’ – Officials say written justifications will add accountability, but some administrator associations are concerned the additional layer will lead to funding delays. (K-12 Dive) Read More
  • State Accountability for Charter Schools – Developing school accountability systems at the state level is a complex process; the unique qualities of charter schools can, at times, require unique approaches. (Education Commission of the States) Read More
  • Sealing the Trapdoors: The State Policies That Matter for Equitable K-12 School Funding – This guide covers the policy factors that determine the answers to these questions—things like states’ use of grants, the amounts districts are expected to raise locally, rules about class size, and how often property values are reassessed. (New America) Read More
  • Where Money From the Meta Settlement Is Going Within States – Following a settlement with Meta, the parent company of popular social media platforms Facebook, Instagram, and WhatsApp, states are starting to announce how they intend to use their funds. (Education Commission of the States) Read More
  • What a Democratic Congress Could Mean for Trump’s K-12 Agenda – Investigations into the Education Department’s dismantling are possible, but some also urge Democrats to pass legislation that embodies their K-12 vision. (EducationWeek Subscription Required) Read More
  • If our product doesn’t help students learn, we shouldn’t get paid – With districts under financial pressure and student achievement below pre-pandemic levels, outcomes-based contracting can help align providers, districts, school leaders, and teachers around shared goals by tying a portion of payments to agreed-upon student outcomes. (District Administration) Read More

Additional FSTC Articles and Resources

  • The Trump Administration advances the establishment of America’s first nationwide school choice program – The U.S. Department of the Treasury and the Internal Revenue Service issued proposed regulations to implement the new Federal Scholarship Tax Credit. (U.S. Department of the Treasury) Read More
  • IRS proposes rule for groundbreaking school choice program – States would have limited power to set specific conditions for how the first nationwide school choice program would operate in their localities, according to a proposed rule published today by the U.S. Treasury Department. (K-12 Dive) Read More
  • Public schools see ‘money on the table’ in education tax credit designed for private school choice – A small but growing set of organizations is working to turn a tax credit primarily designed to cover private school tuition into a benefit for public school students. The extent of their success could determine how many children are ultimately helped by the tax credit, and influence whether more Democratic governors in particular opt their states into the program. (Chalkbeat) Read More
  • Treasury regulations for the Federal Scholarship Tax Credit fail to protect students – As governors and state legislators review the proposed federal scholarship tax credit rules, concerns remain about potential gaps in civil rights protections, increased risks of waste and fraud, and whether benefits will reach wealthy families rather than public school students most in need. (The Center for American Progress) Read More
  • Civil rights organizations urge governors to reject the Trump Administration’s federal private school voucher scheme – The Legal Defense Fund, the Advancement Project, and 14 other civil rights organizations yesterday urged governors in all fifty states and the District of Columbia to reject the invitation for their respective states to opt into the federal “Education Freedom Tax Credit”, a private school voucher scheme created by President Trump’s One Big Beautiful Bill Act. (NAACP Legal Defense Fund) Read More 
  • Public Funds Public Schools and national allies call on governors to reject the federal private school voucher program – Public Funds Public Schools, a project of Education Law Center, and over 20 national education, civil rights, labor, and faith-based organizations published an open letter to governors in all 50 states urging them to protect students, families, and public schools by not opting in to the federal private school voucher program set to begin in January 2027. (Public Funds Public Schools) Read More
  • New rules for Federal Scholarship Tax Credit: What you need to know – Proposed rules from the IRS offer some details on how the federal scholarship tax credit program will work. Some questions remain unanswered. (EducationWeek Subscription Required) Read More
  • OPINION: Public educators are skeptical of the new federal tax credits. They needn’t be – We understand why many educators are skeptical of this tax-credit program. There are legitimate debates about how this law will work and the net impact it will have. But now that the law exists, public educators should consider the opportunities it puts on the table for their students. (EducationWeek) Read More
  • Federal scholarship for private school and homeschooling opening to most kids in at least 30 states – Nearly all schoolchildren in at least 30 states can apply for a new federal scholarship next year to help pay for private school, homeschooling and other educational expenses, according to regulations proposed by the Trump administration. (Associated Press) Read More 
  • Feds release guidance on education freedom tax credit – The U.S. Department of the Treasury and Internal Revenue Service released guidance on the federal Education Freedom Tax Credit, giving states more details on the rules and regulations intended to protect scholarship funds from fraud and abuse. (The Center Square) Read More
  • Federal Education Tax Credit Rules Are Finally Here. What We Know So Far – Ahead of the January launch, the Treasury Department unveiled regulations governing a massive infusion of education funding nationwide. (EducationWeek Subscription Required) Read More
  • School Vouchers Defund and Destabilize Public Education – A resurgence of school voucher legislation at the state and federal levels is putting the promise of a free, high-quality education accessible to all learners at risk. (Asian Americans Advancing Justice) Read More
  • OPINION: A warning to blue-state governors from the Florida voucher wreckage – The federal government is dangling billions of dollars in school choice money in front of your states, and Florida’s experience shows exactly what that money actually buys. (The Hill) Read More

Higher Education News and Resources

  • National College Attainment Network’s 2026 analysis finds affordability gaps widened for students – This year’s Affordability Gap analysis finds that financial aid remains insufficient to cover the true cost of attending public four-year colleges and community colleges for low- and moderate-income students. Despite a record-high maximum Pell Grant, fewer than half of public colleges in either sector met NCAN’s affordability standard. (National College Attainment Network) Read More
  • High school dual enrollment reaches a new high: 3.1 million students – More than 3 million high school students took a college course in 2024–25, according to the third annual release of new dual enrollment data, setting another record increase. (Community College Research Center) Read More
  • College tuition rates are falling but nobody seems to have noticed – While sticker prices have gone up over the last two decades, adjusted for inflation, the average net price has trended down at both public and private colleges, according to detailed data produced by the College Board. These days, the typical family pays a fraction of the advertised tuition, though this varies by school. (Chalkbeat Subscription Required) Read More

Please let us know if you have any questions or concerns, and if we can assist with any government affairs or advocacy issues moving forward.

Sincerely,

Fred Jones, Senior Director of Public Policy and Advocacy,

fjones@southerneducation.org  

Darian Burns, Legislative and Public Policy Analyst,

dburns@southerneducation.org  

Allison Boyle, Research and Policy Specialist,

aboyle@southerneducation.org