Pennsylvania’s Educational Tax Credit programs represent a large public investment in non-public education in the commonwealth, totaling $680 million in fiscal year 2025/26. A decade ago, these tax credits were capped at $150 million, meaning they have more than quadrupled in ten years. Meanwhile, a report by the Independent Fiscal Office found that “key data necessary to thoroughly evaluate the program are not available.” 
This legislation serves to close these reporting gaps while also ensuring that these scholarships are directed toward the students proponents claim to want to support.

Key changes include:

• Reallocating credits in 2026/27 to better align with program demand.
• Creating a new program beginning in 2027/28. The new program:

1. Increases oversight of scholarship granting organizations.
2. Targets resources to students living in the attendance area of a low-achieving public school or attending a nonpublic school in a low-income zip code.
3. Increases transparency on how scholarship dollars are used, including requiring reporting by income level and amount of remaining tuition charged to the student.
4. Expands funding opportunities to include childcare costs.

It is critical for policymakers to understand how these programs function and who they serve. This information will allow the legislature to direct resources where they are most needed and fully evaluate the impact of these scholarships on students, schools, and the state budget.