These Pennsylvania scholarships help kids escape failing schools. But they are not enough. 

Pennsylvania once was a national leader in school choice programs. The commonwealth’s two tax-credit scholarships—the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs—were some of the first of their kind nationally.  

Now, the demand for EITC and OSTC scholarships has surpassed the supply, leaving Pennsylvania’s most vulnerable students behind.  

Who receives these scholarships? 

• Pennsylvania scholarship organizations awarded a record-high 85,570 scholarships in the 2022–23 school year.  

• Scholarship applicants must be below a household income limit and live within the attendance boundary of a low-achieving school. The Pennsylvania Department of Education defines a low-achieving school as one that ranks in the bottom 15 percent on statewide testing. 

• These programs benefit students and families all over Pennsylvania. Students attend K–12 private schools on EITC or OSTC scholarships in 66 of 67 counties. 

What’s the problem? 

• Demand has outpaced supply. About one in two applications—almost 80,000 student scholarship applications—went unfunded due to arbitrary program caps. While Pennsylvania’s tax credit scholarship programs provide transformative opportunities to tens of thousands of students, inefficiencies and administrative challenges limit the programs’ effectiveness.  

• About 50,000 students were denied OSTC scholarships because of program caps. These students are from families earning between $41,000 and $73,000 annually and do not have the means to enroll in a non-public school without assistance. 

• More than 200,000 students attend Pennsylvania’s lowest-achieving public schools. Most of these students come from families who cannot afford to move to zip codes with more desirable public schools or pay out of pocket for private school tuition or tutoring to close the gaps. Many of these schools are serving fewer and fewer students each passing year while receiving increasing rates of these families’ tax dollars—all while demonstrating little to no academic improvement. Pennsylvania students and families deserve better educational options.  

How do we fix this problem? 

• Remove the caps. The program caps deny and waitlist too many applicants. By removing the caps, more students can receive the financial assistance they need to attend the school of their choice. 

• Provide predictability in tax credits and refunds. Government delays—especially prolonged waiting periods for tax refunds—make these programs less predictable for the donors whose tax credits make EITC and OSTC possible. This lack of stability results in fewer scholarships. The Department of Revenue should investigate the delays preventing these programs from running as intended.  

• Allow funding to follow the student. Pennsylvania spends about $22,000 per student—many of whom would like to attend a better school. Why can’t these funds follow students? This solution is bigger than EITC and OSTC. Other policy proposals—everything from Lifeline Scholarships to the Child Learning Investment Tax Credit—can also achieve this goal.  

With these reforms, Pennsylvania can again lead the nation in educational freedom. 

More reading 

To learn more about school choice and Pennsylvania education, please read the following: 

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

• 2025 State of Education Spending in Pennsylvania 

• Pennsylvania’s Education Tax Credit Scholarships: How EITC Serves Children and Families in the Commonwealth 

• EITC and Economically Disadvantaged Schools