Illinois Students Face Potential Loss as Scholarship Bill Advances
Illinois lawmakers are considering a bill that could block students from accessing privately funded educational support, even though the state wouldn’t bear any cost. Senate Bill 3966 threatens to prohibit Illinois from participating in the Federal Scholarship Tax Credit program, a fresh initiative designed to provide financial assistance for tutoring, dual enrollment fees, and educational therapies.
A Federal Opportunity at Risk
In 2025, Congress passed legislation creating a federal tax credit for donations to Scholarship Granting Organizations. This program, set to begin in 2027, allows individuals to receive a tax credit for supporting educational opportunities for students. However, states must actively opt-in to allow their students to benefit. Illinois risks losing out on potentially millions in scholarship funds if it doesn’t participate.
How the Program Works: A Win-Win Scenario
The Federal Scholarship Tax Credit program is designed to benefit students in both public and private schools. Funds can be used for a variety of educational services, including tutoring, additional classes, books, exam fees, and dual enrollment opportunities. This means students struggling in specific areas can receive targeted support without leaving their current school.
Crucially, the program doesn’t divert funds from public schools. It relies entirely on private donations incentivized by a federal tax credit. Donors receive a dollar-for-dollar credit of up to $1,700, encouraging contributions that would otherwise be lost as tax revenue.
Why Illinois Could Miss Out
If Illinois doesn’t opt-in, residents can still claim the federal tax credit by donating to scholarship organizations supporting students in other states. This means Illinois students would be excluded from receiving these funds, while the financial benefit of the tax credit would simply flow elsewhere.
At least 28 other states are already taking steps to participate, recognizing the potential benefits for their students. Illinois would be an outlier in denying its students access to this support.
Supporting Students with Disabilities
The scholarship funds can also be used for educational therapies for students with disabilities, whether they attend public, private, or homeschool. In Illinois, nearly 375,000 students with disabilities were enrolled in public schools in the 2024-2025 school year, potentially benefiting from these additional resources.
Addressing Academic Challenges
Recent state test scores reveal significant academic challenges in Illinois. In spring 2025, only half of students in third through eighth grade were reading at grade level, and just 39% were proficient in math. The scholarship program offers families a way to address these gaps and provide their children with the extra support they need.
What’s Driving the Opposition?
Opponents of the program, including some teachers unions, argue it could harm public schools. However, proponents emphasize that the program doesn’t take money from public schools, but rather adds additional resources for students.
Did you know?
The federal tax credit is available regardless of Illinois’s decision. The only question is whether Illinois students will be eligible to receive the scholarship funds.
FAQ: Federal Scholarship Tax Credit Program
Q: Will this program take money away from public schools?
A: No, the program is funded by private donations and does not divert any state or federal funds from public schools.
Q: Who benefits from this program?
A: Students in public, private, and homeschools can benefit from the scholarships, using the funds for tutoring, therapies, and other educational resources.
Q: What happens if Illinois doesn’t opt-in?
A: Illinois residents can still claim the federal tax credit by donating to scholarship organizations in other states, but Illinois students won’t be eligible for the funds.
Q: When does this program start?
A: The program is set to begin in 2027.
Pro Tip: Contact your state representatives to voice your support for Illinois opting into the Federal Scholarship Tax Credit program.
Learn more about Senate Bill 3966 here.
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