NEPC Review - The Economic Impact from Colorado’s Choice to Participate in the “Education Freedom Tax Credit” Provision in the One Big Beautiful Bill Act - Report Review

Oct 15, 2026

NEPC evaluates a Common Sense Institute Colorado report on Colorado’s decision to participate in the “Education Freedom Tax Credit” provision in the One Big Beautiful Bill Act. It summarizes the proposed federal tax credit and the intended uses for scholarship-granting organizations, including private school tuition and related K-12 expenses. The review argues that predicted statewide economic benefits are unlikely, participation rates may be far lower, key assumptions lack evidence, and the report overlooks warning signs from similar scholarship tax-credit programs.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages14

Reading Time35 min

AccessFree to download

Summary

Introduction

NEPC Review: The Economic Impact from Colorado’s Choice to Participate in the “Education Freedom Tax Credit”(Common Sense Institute, March 2026) Reviewed by: Joydeep Roy Teachers College, Columbia University May 2026 National Education Policy Center School of Education University of Colorado Boulder [nepc.colorado.edu](nepc.colorado.edu) Acknowledgements NEPC Staff Faith Boninger Publications Manager Mark Paige Academic Editor Elaine Duggan Production Design Alex Molnar NEPC Director Kevin Welner NEPC Director Suggested Citation: Roy, J. (2026). NEPC Review: The economic impact from Colorado’s choice to participate in the “education freedom tax credit”provision in the One Big Beautiful Bill Act. Boulder, CO: National Education Policy Center. Retrieved [date] from [https://nepc.colorado.edu/review/co](https://nepc.colorado.edu/review/co)tax-credit Funding: This review was made possible in part by funding from the Great Lakes Center for Education Research and Practice. GREAT LAKES CENTER For Education Research & Practice This work is licensed under a Creative Commons Attribution-NonCommercialNoDerivatives 4.0 International License. This publication is provided free of cost to NEPC’s readers, who may make non-commercial use of it as long as NEPC and its author(s) are credited as the source. For inquiries about commercial use, please [contact NEPC at](contact NEPC at nepc@colorado.edu)[ nepc@colorado.edu](contact NEPC at nepc@colorado.edu). The National Education Policy Center (NEPC), a university research center housed at the University of Colorado Boulder School of Education, sponsors research, produces policy briefs, and publishes expert third-party reviews of think tank reports. NEPC publications are written in accessible language and are intended for a broad audience that includes academic experts, policymakers, the media, and the general public. Our mission is to provide high-quality information in support of democratic deliberation about education policy. We are guided by the belief that the democratic governance of public education is strengthened when policies are based on sound evidence and support a multiracial society that is inclusive, kind, and just. Visit us at: [http://nepc.colorado.edu](http://nepc.colorado.edu) NEPC Review: The Economic Impact from Colorado’s Choice to Participate in the “Education Freedom Tax Credit” Provision in the One Big Beautiful Bill Act (Common Sense Institute, March 2026) Reviewed by: Joydeep Roy Teachers College, Columbia University May 2026 Summary As part of the One Big Beautiful Bill Act passed in July 2025, the federal government established a nationwide tax credit for contributions to so-called scholarship-granting organizations that can fund some K-12 educational expenses. Taxpayers may receive a credit of $1,700 each year for these donations. Key rules are still being drafted by the Trump administration, but eligible families will likely be able to use these funds on a range of educational expenses, including private school tuition, tutoring, transportation, instructional materials, and taking courses at either private or public educational institutions. A recent Common Sense Institute Colorado report claims significant benefits for Colorado, where the current governor is opting into the program. The report predicts that the tax credits will keep Colorado taxpayer money in state (instead of sending it away to federal coffers), boost incomes, create jobs, generate revenues for public schools and increase enrollment in private schools. But these large hypothesized positive benefits are unlikely. Participation rates in similar scholarship programs have historically been much lower than the report predicts for Colorado, likely capping meaningful gains from a diversion of federal tax dollars into educational expenses in Colorado. The economic impact model employed by the report leaves many questions unanswered, and assumptions re

FAQs

What policy does the NEPC review examine?

The review examines a Common Sense Institute Colorado report’s assessment of Colorado participating in a nationwide “Education Freedom Tax Credit” provision created by the One Big Beautiful Bill Act.

How is the tax credit described and what expenses are it intended to support?

Taxpayers may receive a federal one-for-one credit of up to $1,700 each year for donations funding scholarship-granting organizations that support K-12 students, with funds used for a range of approved educational expenses.

Why does the NEPC review challenge the report’s predicted benefits?

The review argues that historical participation rates in similar scholarship programs are typically lower than predicted, that the economic model leaves key questions unanswered, and that assumptions about increased private school enrollment are not supported by evidence.

Oct 15, 2026

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