U.S. Education Secretary McMahon Urges Whitmer to Join Federal Scholarship Tax Credit Program

Federal Tax Credit Program Offers New School Choice Option for Michigan Families

U.S. Secretary of Education Linda McMahon visited Metro Detroit on Friday and called on Governor Gretchen Whitmer to opt Michigan into a new federal scholarship program that would allow donors to receive tax credits for contributing to student scholarship funds.

The program, known as the Education Freedom Tax Credit, is included in President Donald Trump's Working Families Tax Cuts Act. Under the proposal, taxpayers can claim a federal tax credit of up to $1,700 for donations made to approved nonprofit organizations that fund student scholarships.

The tax credit directly reduces the amount a taxpayer owes, dollar for dollar, unlike a traditional tax deduction. The credit is expected to be available for donations beginning in 2027.

How the Program Would Work

The program relies on a multi-step process outlined by the federal Education Department:

States must first choose to participate. Participating states approve eligible scholarship organizations. Taxpayers donate to those organizations. Donors then claim a federal tax credit of up to $1,700 when filing taxes. The nonprofit groups, referred to as Scholarship Granting Organizations, would use the funds to provide scholarships to students for education-related expenses.

The credit is expected to generate up to $24 billion annually in scholarship funding, depending on participation levels, according to a report cited in the Education Department's fact sheet.

Eligibility Requirements

Eligibility for scholarships is based on income and school enrollment criteria. The Education Department says students must be eligible to attend a K-12 public school and come from households earning no more than 300 percent of the local median income.

Scholarship funds could be used for a variety of education expenses, including private school tuition, academic tutoring, services for students with disabilities, and other approved K-12 costs.

Political Dynamics in Michigan

The program is optional for states, meaning Michigan would need to opt in for residents to participate. That decision could ultimately determine whether families in Metro Detroit and across the state are able to access scholarships funded through the tax credit.

On Friday, McMahon called on Governor Whitmer to opt the state into the program. Speaking at Hamtramck Academy, a charter school that enrolls about 550 students, McMahon said "The Education Freedom Tax Credit isn't some distant idea, it's a homegrown solution that puts Michigan families in charge."

Michigan House Speaker Matt Hall, a Republican from Richland Township, and state Rep. Tim Kelly, a Republican from Saginaw, also spoke at the event. Hall said he is working with Whitmer on efforts to improve literacy and said the federal program is another way to improve student achievement.

"If they're in a failing school, this could be the lifeline for their family with these scholarships to go into another school that will help unlock their potential," Hall said. "So this is another tool that Michigan needs, and I'm very hopeful that Gov. Whitmer will see that, to see what other governors have seen and opt us in."

Whitmer's Position

Whitmer has previously said the program is a "high-level talking point" and that she needs more information before making a decision. A Whitmer spokesperson said Friday she had nothing to add from Whitmer's previous comments about the program.

Previously, Whitmer has vetoed similar state efforts to pass a tax-credit scholarship program.

State Education Officials' Response

State Superintendent Glenn Maleyko did not directly answer whether he wants the state to opt in. "My priority is adequate and equitable funding for public schools in Michigan," Maleyko said in a statement to Bridge Michigan Friday. "I believe federal resources should be devoted to those priorities."

Critics' Concerns

Critics of the program liken it to school vouchers and say it would weaken public schools. Katherine Nitz, media relations coordinator for the Michigan Education Justice Coalition, told Bridge Michigan the program would "weaken public schools" and "sets the stage for privatization."

"This would wind up gutting public school funding, which is already tenuous in Michigan," Nitz said.

The Michigan Constitution prohibits using public funds for private school attendance. So far, 27 states have opted into the program, according to McMahon.

Only two Democratic governors, in Colorado and North Carolina, have said their states will likely join, according to Chalkbeat.

Previous Federal Visit

Last September, McMahon visited public charter schools in Detroit and nearby Redford, Renaissance High School in Detroit, and Hillsdale College, a private college that does not accept federal funding. That evening, she touted the benefits of the tax-credit scholarship program at an event hosted by the Midland County Republican Party.

McMahon also posted on social media Friday urging the state to act and linking to a Detroit Free Press opinion piece she wrote about why the state should join.

What Comes Next

The U.S. Treasury Department and IRS are expected to finalize implementation details in the coming months. The tax credit would apply to contributions made beginning Jan. 1, 2027.

Michigan families are also allowed to home-school their children and do not have to notify the local district or state about their choice. Michigan does not have a state private school choice program, but roughly 1 in 4 Michigan public K-12 students attend a charter school or use the state's choice program to attend a school outside their local district, according to a previous Bridge Michigan analysis.