All4Ed Flash: The Big Questions Behind SGOs and Career Education Funding
⚡️ Welcome back to the All4Ed Flash!
This week on the All4Ed Flash, Jenn Ellis breaks down two major federal education policy developments shaping the future of schools and workforce learning nationwide.
First, policymakers and education leaders are awaiting long-anticipated Treasury Department regulations tied to the new federal education tax credit program established under the One Big Beautiful Bill Act. Jenn explains how Scholarship Granting Organizations (SGOs) would operate, why states are rapidly deciding whether to opt in, and the unanswered questions surrounding equity, oversight, and access for public school students.
Then, the episode turns to the growing debate in Washington over the transfer of certain federal career and technical education (CTE) and adult education programs from the U.S. Department of Education to the Department of Labor. As lawmakers raise concerns about implementation challenges and long-term impacts, All4Ed CEO Amy Loyd weighs in on why career-connected learning must prioritize lasting skill development — not just short-term workforce placement.
Listen to the Podcast
Read This Week’s Update:
Nationwide, policymakers and education organizations are anxiously awaiting the release of federal regulations from the Treasury Department that will provide critical details regarding the federal education tax credit passed in the One Big Beautiful Bill Act.
The language of the bill outlined that the program intends to provide a new federal tax credit of up to $1700 for individual donations to Scholarship Granting Organizations, or SGOs, that fund scholarships for eligible students in participating states. States must opt-in to this federal tax credit through their Governor or another designated state official, with the program slated to begin in January of 2027.
However, crucial components of the tax credit remain unknown, including the types of activities and expenses that can be covered by scholarships, and even whether and how state policymakers can limit the list of SGOs allowed in their state. The anticipated federal regulations should go a long way toward providing clarity that will allow lawmakers to plan and make decisions around participation in the program.
But questions remain regarding how best to ensure that funding under this tax credit is available to public school students and to build infrastructure that distributes opportunities and funding equitably across all student demographics and geographic regions of participating states.
As of today, May 5, of 2026, 27 states have elected to participate in the program. The program’s adoption is currently split along party lines with only 2 participating states having Democratic Governors, Colorado and Virginia, though it’s notable that Virginia opted into the program under its former Republican Governor.
We will plan to provide an update after the release of the anticipated regulations, so please check back here for more!
In other news, a major policy debate continues to intensify in Washington over the future of federal career and technical education programs — especially since the U.S. Department of Education has, through an Interagency Agreement, officially transferred the funding, administration, and oversight of certain programs from its Office of Career and Technical Education to the U.S. Department of Labor.
This shift is part of the administration’s broader effort to consolidate workforce development programs under one agency. But the move is raising significant concerns on Capitol Hill, where lawmakers from both parties are questioning the impact on students, states, and the integrity of the programs themselves.
These programs — including career and technical education and adult education — currently deliver more than a billion dollars to states to support pathways that blend academics with real‑world skills. Many state leaders have already reported technical and operational challenges following the transfer, and lawmakers want more transparency before any further changes are made.
Last week Education Secretary Linda McMahon faced pointed questions from both Republicans and Democrats about how the transfer is being managed, what metrics are being used to measure success, and whether states are experiencing disruptions.
All4Ed CEO Amy Loyd — who previously led the Office of Career, Technical, and Adult Education — is urging Congress to consider the long‑term consequences of shifting these programs away from the education system.
“Our members of Congress should be thinking about how they are improving outcomes for people through policy related to people — not just short‑term job placement.”
She emphasizes the need for “long‑term skill development, the balance of academic rigor and career‑connected learning,” rather than simply filling immediate job vacancies.
Career and technical education works because it integrates strong academics with hands‑on learning. Perkins funding helps schools update equipment, train teachers, and build programs that keep pace with industry needs. Without it, many districts would struggle to offer high‑quality pathways.
As Congress continues its oversight of the interagency transfer, one thing remains clear: the decisions made now will shape the future of these programs — and the opportunities available to millions of learners nationwide.
Thank you for subscribing to the All4Ed Flash. Be sure to follow us on your favorite podcast service and social media. You can find us on linktree at All4Ed.
