Pennsylvania’s Best Education Idea Turns 25

A quarter century ago, Pennsylvania quietly did something remarkable: created a scholarship program that gave low- and middle-income families an opportunity to choose the best schools for their kids. This first-of-its-kind program galvanized the national school choice movement, ushering in much-needed reforms that put students first. 

That program is the Educational Improvement Tax Credit (EITC), which marks its 25th anniversary. From its inception, EITC’s design was simple yet revolutionary: Allow businesses to invest in scholarships and empower families to choose educational environments that are best for their kids.

Twenty-five years later, EITC is still delivering on that promise.

In fact, the program achieved a new milestone. For the first time in its history, EITC—in conjunction with its partner, Opportunity Scholarship Tax Credit (OSTC) — awarded more than 101,000 scholarships in the 2023–24 school year—an almost 20% increase over the previous year. Since their inception, both programs have offered more than 1 million scholarships to children across our great commonwealth.

These scholarships are going to the households that need them the most. The average household income of families receiving EITC scholarships in the Philadelphia area was about $76,000 per year — well below the statewide median of $100,557 for Pennsylvania families.

But these scholarships don’t just go to kids in Philly. EITC and OSTC scholarships went to students in all 67 Pennsylvania counties, meaning all families — rural, urban, and suburban — benefit from these programs. 

While these recent numbers highlight remarkable achievements, they also reveal areas for improvement. In 2023–24, more than 68,000 applicants didn’t receive a scholarship. That means 40% of applicants walked away disappointed and empty-handed. Today, these children remain on a wait list, hoping for an education that will give them the opportunity for a brighter future.

This issue is even more acute with OSTC. Out of about 61,000 applications, only about 15,000 kids received an OSTC scholarship. That’s OSTC denying a staggering 75% of applicants.

And it wasn’t because these students didn’t qualify. Instead, this is a simple case of supply not keeping pace with demand. Arbitrary program caps have limited the number of scholarships available each year.

Fortunately, we know exactly how to fix this issue. Automatic indexing — a legislative mechanism that would expand the program by 25% annually when the commonwealth has allocated 90% of credits — would allow EITC and OSTC to grow with its demand.

But that isn’t the only legislative solution. EITC created a template and a model for success that other innovative programs could emulate.

In 2023, Pennsylvania nearly adopted the Lifeline Scholarship Program. The program would have awarded $100 million in educational savings accounts to eligible students attending Pennsylvania’s lowest-achieving schools based on statewide testing. Unfortunately, Gov. Josh Shapiro vetoed Lifeline Scholarships, breaking his campaign promise to deliver a high-quality education to “every child of God.”

There’s also the Federal Scholarship Tax Credit (FSTC). Signed into law last July, the FSTC grants dollar-for-dollar tax-deductible donations up to $1,700 to scholarship-granting organizations (SGOs). Thanks to EITC and OSTC, Pennsylvania is home to more than 100 SGOs, primed and ready to award millions of scholarships to families in need. And this federal tax credit does not take any money away from our public schools.

Again, Shapiro holds the keys. Before students can benefit from the FSTC, the governor must opt in. Failing to do so would leave, by one estimate, about $500 million in lost scholarship funding. Leaving money on the table would be an unspeakable insult to families in dire need of better educational options for their kids.

Plus, polling shows that there’s overwhelming support for this. Seven out of ten Pennsylvanians support opting into the FSTC, and nearly 80% want to expand tax-credit scholarships in Pennsylvania.

And it’s understandable why Pennsylvanians are hungry for change. The majority of Pennsylvania students score below proficient in math and reading in statewide testing.

Families want it. Businesses support it. Students are far better for it. The only thing standing between kids and these scholarships is the political courage to grow a time-tested program that has already earned its credibility a hundred thousand times over.

And while we should celebrate these decades of achievement, we still have our work cut out for us. With more than 200,000 kids trapped in Pennsylvania’s failing schools, we cannot rest until each and every one has the opportunity and resources to break free.

So, happy birthday, EITC. Here’s to many more because we are just getting started.