We asked five school choice proponents to offer their advice on what the forthcoming regulations from the Department of the Treasury on the new federal scholarship tax credit should be. Our five-part series continues today with an essay by Jorge Elorza.

Anyone who works in advocacy knows that passing legislation is only the beginning of reform. The second step—rulemaking—is where laws are translated into practice and where the intent of a bill is either realized or restricted, depending on how agencies define the path forward.

This is especially true for the Educational Choice for Children Act (ECCA), which is included in the One Big Beautiful Bill Act. As the first nationwide private-school choice program, it is designed to expand opportunity, especially for students and families who have historically had the fewest education options. Treasury’s rulemaking should honor that goal by ensuring consistency, fairness, and equity across participating states while preserving the flexibility needed for new approaches and school models to emerge.

Maintain a consistent standard for including scholarship-granting organizations. To ensure fairness and prevent political favoritism, Treasury should establish a uniform federal standard to determine which scholarship-granting organizations (SGOs) may participate. States should not be allowed to selectively recognize or exclude qualified organizations based on political considerations or other preferences.

This is not only a matter of legal consistency; it is also a matter of fairness. Many SGOs are deeply rooted in communities of color, immigrant neighborhoods, and under-resourced regions. These organizations are often best positioned to reach families who have been historically underserved by traditional education systems. Treasury must ensure that all qualified SGOs have an equal opportunity to participate.

Support equity through flexible program design. The new law gives SGOs discretion over which qualified expenses to fund, how to distribute scholarships, and what amounts to offer. That flexibility is not a loophole; it is a feature. It allows the program to reach students who are not well served by one-size-fits-all public school systems, including students with learning differences, students in rural communities, students from low-income households, and those still recovering from pandemic-related learning loss.

Treasury should not impose rigid programmatic requirements that limit the ability of SGOs to meet these diverse needs. Some organizations may focus on tutoring or afterschool care for public school students. Others may prioritize private-school tuition, transportation, early childhood programs, or dual enrollment. These differences reflect the unique priorities of different communities and should be supported, not restricted.

In addition, the law defines eligible students as those who come from households earning no more than 300 percent of the area median income and who are eligible to enroll in public school. Treasury should allow SGOs within each state to tailor their programs to advance particular goals, such as prioritizing support for the most financially needy students. Once a state opts in, local SGOs should be empowered to respond to the needs of their communities, as long as these organizations adhere to the statutory mandate not to serve students from wealthy families.

Allow for flexibility and innovation. We are living through a moment of profound social, political, and cultural change. In times like these, education policy must make room for reinvention rather than retrenchment. The ECCA rulemaking process presents a rare opportunity to do just that.

Treasury should not narrowly define what counts as a legitimate learning environment and should instead preserve flexibility so that new forms, approaches, and models can emerge. Microschools, hybrid programs, community-led learning pods, and other innovations may not look like traditional schools, but they are meeting real needs for families today. Guardrails are important, but overly prescriptive rules risk reimposing the same bureaucracy and standardization that families are trying to escape.

If ECCA is to catalyze a more pluralistic, responsive, and equitable education system, policymakers must act with humility and place trust in the creativity of communities to shape what learning looks like next.

The Treasury Department’s rulemaking decisions will determine whether ECCA fulfills its promise or falls short. If implemented thoughtfully, this program can expand opportunity, empower families, and foster innovation across the country.

By ensuring equitable opportunities to access the tax credits, protecting community-rooted organizations, and resisting arbitrary limitations, Treasury can help build an education system that is not only more accessible but also more adaptive to the needs of today’s students and tomorrow’s.

Jorge Elorza is the former mayor of Providence, Rhode Island, and the CEO of Democrats for Education Reform.

Suggested citation format:

Blew, J., Elorza, J., Enlow, R., Luebke, R. and Murphy, P. (2025). “How Should the New Federal Scholarship Tax Credit Be Regulated? Treasury Department rulemaking could make or break the OBBBA’s school choice provision”. Education Next, 25(4), 19 September 2025.