New Report: Demand for Tax Credit Scholarships Rises as Wait Lists Grow

Rising, unmet demand for EITC and OSTC programs necessitates expanded educational choice options like Lifeline Scholarships.

Harrisburg, Pa., February 26, 2025 — Demand for school choice scholarships in Pennsylvania hits record numbers, according to a new report from the Commonwealth Foundation.

The analysis, which includes new data from Right to Know requests, explores the continued success of the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC), which awarded scholarships to 85,570 K–12 students during the 2022–23 school year.

Demand for these programs is growing rapidly. More than 164,000 students applied for scholarships—the highest number of applicants on record. The funding sources for these scholarships are voluntary individual and business donations to scholarship organizations, supported by state tax credits.

Unfortunately, arbitrary caps on these tax credit scholarships, plus the unpredictability in fundraising, have left thousands of students stranded. While over 85,000 students received scholarship awards, nearly 80,000 applications remain unfilled.

Rachel Langan, the senior education policy analyst at the Commonwealth Foundation and report author, issued the following statement:

“It is encouraging to see such a desire for educational choice options and witness Pennsylvania families using the available options in record numbers. However, the caps on EITC and especially OSTC scholarships severely limit the reach of these programs. Nearly one in two students who apply are turned away.

“The Opportunity Scholarship Tax Credit (OSTC) specifically denied almost 75 percent of applicants—nearly 50,000 students—in the 2022–23 school year.

“These denied students reside in the lowest-performing school districts in our commonwealth—the exact demographic that would be eligible for the Lifeline Scholarship Program. If enacted, this program would provide additional scholarships to tens of thousands of students stuck in these failing schools. For these denied families, Lifeline Scholarships would offer real hope to save their kids.

When current programs cannot satisfy demand, thousands of ousted families have no other choices for their children; the only solution is to find more options. That’s precisely what the Lifeline Scholarship Program does.”

Andrew Lewis, President and CEO of the Commonwealth Foundation adds:

“Lifeline Scholarships build on the success of other programs like EITC and OSTC. More options mean more children accessing high-quality schools of their choice.

“Applicant numbers alone illustrate how strongly families want educational options. As more parents learn about scholarships and tax credits available to them, waiting lists will only grow.

“To meet increasing demand, Pennsylvania must employ further educational options—starting first and foremost with Lifeline Scholarships. “The time for expanded educational choice is now. Pennsylvania families are waiting.”

### 

The Commonwealth Foundation transforms free-market ideas into public policies, empowering all Pennsylvanians to thrive.