The One Big Beautiful Bill Act signed by President Trump on Independence Day 2025 launched a historic expansion of the federal role in American education, directing the U.S. Treasury Department to use the federal tax code to flow potentially billions of dollars in “scholarships” to families for a wide range of schooling services, beginning in 2027. At the center of the new Education Freedom Tax Credit program are scholarship-granting organizations (SGOs), nonprofits that collect scholarship donations from taxpayers, select scholarship recipients, and decide where they can spend the funds they receive.
Many of the nation’s established SGOs primarily channel funding to families for private schooling and are likely to do the same under the new federal program (former U.S. Secretary of Education Betsy DeVos, a harsh critic of public education, wrote the early drafts of the new tax credit during the first Trump administration). But the Big Beautiful Bill Act stipulated that the public education sector—traditional school districts and charter schools—could participate in the new federal program as SGOs, partners to SGOs, and providers of educational services.
To Deborah Gist, the former top public education official in Rhode Island and the District of Columbia and the former superintendent of the Tulsa schools in Oklahoma, that presented an opportunity for public education. She has launched Future School Fund, an SGO that plans to work in every state that opts into the federal program and one that supports students in traditional and charter public schools exclusively. FutureEd Director Thomas Toch spoke with Gist about her new organization and the forthcoming federal scholarship program.
Thanks for taking time to talk. Why did you create the Future School Fund?
After the federal legislation passed, I very quickly, wearing my public-school superintendent hat, started thinking about the things that we could offer students with these dollars—tutoring, out-of-school time, high-quality summer programming to avoid summer learning loss.
And I thought about the fact that in Oklahoma, where I’ve most recently been a superintendent, we have a universal state education tax credit program that also includes public schools. But the public schools in Oklahoma struggle to take advantage of it. It is complex, and many don’t have the additional capacity to take something like this on while they’re focused every day on teaching, learning, and supporting students. So, it has never really gotten off the ground. I felt someone needed to help public schools benefit from the federal program.
That feeling was reinforced when I went to an ExcelinEd [an education advocacy organization founded by former Florida Republican Governor Jeb Bush] conference and heard most of the conversations emphasizing the program’s potential to increase private school access. I left feeling motivated to make sure that public-school students also had access.
How are you hoping to help public schools participate in the program?
I decided the best way for me to contribute would be to create a national scholarship-granting organization exclusively focused on scholarships for students remaining enrolled in public schools.
Some school districts will set up their own SGOs. But for many districts and charter networks across the country, taking on that level of a project isn’t possible. And it isn’t necessary. We are building an organization that makes the program plug-and-play for them. We do all the back-office infrastructure.
Just to be clear, public-school students don’t have to participate in the program through their school districts. They can seek scholarships from SGOs independently and then use the funds on publicly or privately provided education services approved by the SGO. You plan to partner with school districts or charter networks to target their students with the greatest academic needs more systematically.
Generally, yes. We want school systems to identify the opportunities they want to make available to eligible students and families, based on their local priorities and students’ needs. Families choose whether to participate, and services could be provided by the school system itself or by approved community partners. We support donor education, helping districts raise scholarship funds. Then we handle the management of the donor funds, the compliance and auditing the program requires, the verification of student eligibility, the matching of students to ensure that the scholarships they’re receiving are the ones that they’re eligible for, and all of the tracking of scholarship funds and everything that goes along with that, including the distribution of funds to the school systems and potentially other providers.
The Trump Treasury Department, trying perhaps to generate support for the program in blue states, has stressed the potential of public sector schools to participate, both traditional public schools and charter schools. But it sounds like that may be more difficult than some are suggesting.
Existing SGOs certainly have a head start. They have capital, teams, and infrastructure already in place. But this is also a completely new program, particularly when it comes to implementation in public schools. That’s why we’re building Future School Fund specifically around the needs of school districts and charter organizations, rather than adapting a model designed primarily around private-school tuition.
Some have suggested that every taxpayer can be a philanthropist under the program. But about a third of Americans don’t pay any federal taxes and some two-thirds pay less than the $1,700 maximum individual tax credit under the new federal program. Are you concerned that taxpayers with the resources to contribute to their local schools are going to be concentrated in more affluent communities where fewer students need the financial support?
Many people can participate even if they don’t have a $1,700 tax liability, because that’s the maximum, not the amount someone has to contribute. At the same time, many families in some of the school systems we work with won’t be able to participate as tax-credit donors because they don’t have sufficient federal tax liability. So we have to pay close attention to what that means for ensuring students across the country have access to scholarships, regardless of where they live.
And it isn’t just about parents. It’s about employees, community members, people whose kids are grown who still care deeply about public schools, and some of the largest employers in the country helping their employees understand the opportunity. There are a lot of strategies we’re going to need to use to get there.
Some say SGOs can easily work with employers to establish payroll deduction systems to support the scholarship program. Others say SGOs must make partnerships “frictionless” for employers, a challenging task requiring the creation of communications and accounting infrastructure and a lot of computer software development, among other things.
It’s new for everyone, and that makes it hard. Employers need the process to be easy, but the same is true for individual donors and others participating in the program. We’re all building new systems and helping people understand what’s possible. I expect that to get easier as the program becomes more familiar.
Since public school districts and charter schools can serve as providers of educational services, like tutoring and summer schooling, under the federal program (in addition to being SGOs and partners to SGOs), the federal program seems likely to boost the trend toward “unbundling” educational services. Do you agree?
It’s an opportunity. A lot of families are increasingly experiencing the world as much more of a customized, choice-based experience. And it’s important for public school systems to change in response. This program can help school systems figure out the way that they can offer opportunities to students on a per-pupil basis and then receive funding as a result. And that prepares them for other ways they can evolve.
In the partnerships you’re pursuing, school districts and charter school organizations would identify their students who need support. You as an SGO would designate scholarships for those students. And school districts would give families the opportunity to say “thank you” or “no, thank you” for the chance to receive tutoring or other support paid for by the scholarship program. If families say yes, the tutoring could be delivered by the districts or by outside vendors that your SGO would approve. Do I have that right?
Yes. Let’s use summer learning as an example. And add the caveat that we’re having this conversation prior to the publication of the Treasury Department’s regulations for the program. Anybody who’s been a parent has done the puzzle of how I’m going to make sure my children are engaged in the summer while I work. It may be that for four of those weeks, the school system is delivering summer learning that has a combination of academics and enrichment. And maybe the local YMCA or the Boys & Girls Club deliver services on different weeks, in a different part of town. They would be paid with scholarship monies directly from Future School Fund, as an SGO, or through the school system or charter organization, depending on what’s allowed.
SGOs, in your case Future School Fund, are responsible under the law for approving every service provider, in your example the school district, the YMCA, and the Boys & Girls Club, right?
Anyone we’re sending money to, for sure.
There are many advocates of the new federal program who say that parents alone should be the arbiters of the quality of the educational services they purchase with their scholarships. In that scenario, SGOs are merely conduits of resources, right? They’re not necessarily approving providers based on their performance. What’s your take on that?
I’ve spent most of my career as a public servant and it’s in my DNA to be a good steward of taxpayer dollars. It’s both accountability for public dollars—even though the tax credits are technically not public dollars—and accountability to your donors. It’s really important to make sure that we’re not only avoiding waste, fraud, and abuse, but also that we are demonstrating results for what people are giving us. It’s giving families choice, but also collecting information so that we know that we’re making a difference for kids.
Some of the program’s strongest advocates say that it’s up to families to make the best use of their scholarships, but that information on providers’ performance, information that would help families make informed choices, isn’t necessary. Does that surprise you?
I believe strongly in giving families choices. And I also believe we have a responsibility to give them good information to help them make those choices. Those things aren’t in conflict. To me, information about quality and results makes choice more meaningful. Quality is an important differentiator for us as a scholarship-granting organization.
How concerned should we be about fraud under the program? Taxpayers giving money to bogus SGOs that abscond with it? Providers paying SGOs kickbacks to get on SGOs’ approved-provider lists?
All of us as Americans should be concerned. Instances of fraud are relatively rare, but they happen. I’ve experienced fraud firsthand in my work in education, unfortunately, which is why my antenna are always so incredibly high.
Every governor who’s approving scholarship-granting organizations, every scholarship-granting organization, and every school system needs to be just hypervigilant about this and make sure that strong controls and auditing procedures are in place.
The Treasury Department has announced its intention to require every SGO to submit annual “financial and programmatic” audits to state officials. Having been a state and local education official, do you think states have the resources to review the audits and act on problems?
Again, all of this is so completely new for everyone that it remains to be seen how much capacity it will take at the state level to effectively implement the program for those who opt in, the ways in which they will need to lean in, given that it is a federal program.
Where does Future School Fund go from here?
We plan to be an approved scholarship-granting organization in every state that opts in and are now talking with school systems across the country to be ready to help them implement the program. In some cases, we’re having conversations with state leaders that may result in MOU-type statewide arrangements.
Where are you focusing first?
As a native Texan and current resident, Texas is definitely one of the states we plan to serve. We’ve also spent a lot of time with school systems in Colorado, in part because the governor [Democrat Jared Polis] has been so supportive of the program, and because an organization has been bringing public school systems leaders together to explore the program since last fall.
Are you making progress in building partnerships with school systems and charter networks?
We’re at the stage of entering into non-binding letters of intent. I expect many public-school systems will want to see Treasury’s draft regulations before entering into more significant relationships. Their boards need enough information to understand what they’re committing to.
Given that school district leaders and school boards are going to have to approve partnerships and that the relationships are going to have to work their way through district contract and procurement offices, when are scholarship monies likely to start flowing to students? By the start of the 2027-28 school year?
We’re encouraging the school systems we’re working with to use back-to-school messaging to get their donors ready, to educate people about the program. So hopefully, there will be something of an early surge of donations in January when the program launches. Then we imagine donations will slow down a bit and then pick back up again with end-of-year giving. [Donors making contributions in 2027 would be able to claim their federal tax credits when they file their 2027 returns in 2028].
So not a lot of money reaching students in calendar 2027?
I think the program will be smaller in year one. It will be a time for us to help Americans understand how they can take advantage of the program to invest in things that they care about.