Can Virginia get out of §25F? A Democratic bill to block it stalled, and the real lever is Spanberger's to pull

Ever since outgoing Gov. Glenn Youngkin (R) made Virginia the first state in the country to opt into the federal Education Freedom Tax Credit (§25F) days before leaving office, Virginia Democrats and the state’s teachers’ union have been looking for a way back out. With the program not launching until January 1, 2027, the question has become one of the most-watched in the country: can a new administration unwind an opt-in its predecessor locked in? The short answer, as of mid-June 2026, is that Virginia has not left, and that there are exactly two routes out, one stalled and one untouched. This piece lays out where each actually stands, because the rumor that Virginia is “getting out” runs well ahead of the record.

The legislative route was tried and stalled. The vehicle was HB 359, carried by Del. Dan Helmer (D-Fairfax), which never named §25F but would have effectively closed the door on it. Rather than repeal anything, the bill imposed a sweeping regulatory framework on any private school that accepts scholarships funded by a state or federal tax credit: mandatory participation in Virginia’s Standards of Learning assessments, Board of Education accountability ratings, nondiscrimination rules barring admissions decisions based on a family’s statement of faith, financial audits, teacher-credentialing requirements, and civil penalties for noncompliance. For many of the faith-based schools that §25F scholarships are meant to reach, those conditions would make participation impossible, which is the point: one Virginia Christian school warned the bill would “eliminate” its ability to take part in “the federal tax credit for private school scholarships that goes into effect next year.” HB 359 was reported from the House Education Committee on a party-line 13-to-7 vote on February 9, 2026, then continued to the 2027 session in House Appropriations two days later, so it did not pass this year. Its official status on the Virginia Legislative Information System is simply “Continued.” It is parked, not dead.

The surer route never required a bill at all. Because the §25F opt-in is an annual election, a participating state’s governor must resubmit a qualifying list of Scholarship Granting Organizations to the U.S. Treasury each year, a successor is not bound by a predecessor’s choice in future years. Gov. Abigail Spanberger (D), who inherited Youngkin’s opt-in, can keep Virginia out simply by declining to file the next election, no legislation, no veto fight. The Virginia Education Association has pressed exactly that, urging the state to “proactively reject participation” and the General Assembly to “preemptively prohibit” it, and citing its own estimate that participation could cost Virginia public schools between $222 million and $956 million a year once the credit takes effect. Spanberger’s campaign education plan pledged to “reject efforts to divert funding from public education to pay for voucher programs.”

And yet she has not pulled that lever. As of mid-June 2026, Spanberger has issued no withdrawal, declined no renewal, and her office has not said when or whether she will, leaving Virginia formally opted in. The decision point is approaching rather than passed: Treasury’s June 10 preview of the forthcoming §25F regulations removed the “wait for final guidance” rationale critics had urged her to honor before deciding, and the program’s 2027 launch sets a real deadline for the first renewal call that is unmistakably hers. It is worth not confusing two different Virginia programs here: the state’s own Education Improvement Scholarships Tax Credit is a separate, pre-existing measure, and HB 359’s reach over “state or federal” aid is what links it to §25F. Notably, Youngkin moved the other direction on his way out, expanding Virginia’s approved SGO roster with five additional organizations in January 2026, so any reversal would mean unwinding a participation framework that is already built.

Virginia’s dilemma is now the template other states are copying in more explicit form. Where Virginia’s exit hinges on one governor’s discretion, Rhode Island just enacted a law requiring both the legislature and the governor to approve any opt-in, and Vermont’s H.933 sought to condition participation the same way, sharpening the unresolved question of whether §25F is a federal floor or a ceiling on what states may add. For Virginia donors, families, and prospective scholarship organizations, the practical takeaway is that nothing changes before the January 1, 2027 launch unless Spanberger declines to renew or a future General Assembly revives HB 359 and passes it. The federal credit’s mechanics are unaffected either way: donors in participating states can give up to $1,700 to a qualified SGO and claim a dollar-for-dollar federal credit, a cap that is fixed regardless of how Virginia’s fight resolves, as we explain in why the credit is $1,700, not $3,400. The broader opposition driving these moves is detailed in our coverage of who opposes §25F. Virginia’s status is tracked on our Virginia state page and the national participation map; operators weighing whether to stand up an SGO in case Virginia stays in can start with our explainers and the SGO directory.