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ClassWallet has replaced CEO Stephen Lindeman with board chair Kathy Perrotte as states prepare for a new federal education tax credit program. The company says Lindeman’s departure followed a planned commitment and was unrelated to a recent phishing attack; how the leadership change may affect the company’s capacity for expanded work is not yet clear.
ClassWallet has named Kathy Perrotte its new CEO, replacing Stephen Lindeman as the financial technology company prepares to administer education-related funds amid an expected expansion of school choice programs. The Florida-based company’s leadership change comes as states get ready for a federal tax credit program that could channel substantial donations toward tuition, tutoring and other educational services.
Perrotte, a software executive who had been ClassWallet’s board chair, took over Monday, The 74 reported. Lindeman had led the company since April 2025. Company spokesman Eric Knobloch said Lindeman joined ClassWallet as chief operating officer in 2023 as part of a “planned three-year commitment” and will remain involved in an advisory capacity.
The change follows a phishing incident disclosed about a month earlier. Cybercriminals impersonated ClassWallet to obtain login credentials from vendors participating in South Carolina’s private school choice program, with service providers in multiple states affected. Knobloch said the leadership change was not related to the incident. The source report did not identify the attackers or provide details about financial losses or the full scope of compromised credentials.
ClassWallet says it has distributed more than $7.5 billion since its founding in 2014 and manages transactions for education savings account programs in eight states, alongside other state and federal programs. Knobloch said the company already supports scholarship and fund administration “at scale” for students in public and private schools. Those statements describe the company’s own account of its operations; they do not resolve concerns raised by some state officials about how well its platform has kept pace with expanding programs.
Pressure on Education Payment Systems
The appointment comes as a new federal program could add a major source of funds to an already growing network of school choice and education services. The program is estimated to generate about $25 billion per year, according to the source report, which describes that amount as exceeding any current federal education program. If donations and participation reach that scale, payment administrators may face more transactions, more participating families and providers, and greater demands for oversight.
Education finance platforms handle public and donated funds across programs with different rules. Their ability to process payments accurately and keep records organized can affect families, service providers and government agencies. Adam Newman, a co-founder of education consulting and investment firm Tyton Partners, told The 74 that the federal tax credit program would make existing education savings account programs “look like child’s play.” That is an expert’s assessment of the likely scale, not a confirmed forecast of ClassWallet’s workload or performance.
For ClassWallet, the CEO change is occurring alongside scrutiny of vendor capacity. In Arkansas, where the company administers a $379 million Educational Freedom Accounts program, a June report by education officials said the platform appeared to be maturing too slowly for the program’s growth and complexity. The source material does not state whether those concerns have since been resolved. The leadership news therefore matters both as a corporate change and as a development in the readiness of organizations that may be asked to manage larger education funding flows.
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A Larger Federal Funding Pipeline
The federal Scholarship Tax Credit is scheduled to launch next year. It allows taxpayer donations to support a range of educational services, including tuition and tutoring. According to The 74, 31 states had opted in at the time of its report, while nonprofits serving students in public and private schools were organizing to raise and distribute funds. The program’s final participation, volume of donations and operating arrangements remain developing matters.
ClassWallet began operating in 2014, before Arizona adopted the first universal education savings account program in 2022, according to the report. The company’s digital wallet system is intended to administer approved spending through a platform rather than relying only on debit cards or reimbursement after families pay expenses themselves. It now competes with other providers, including Odyssey, which won a contract for Texas’ new Education Freedom Accounts, and Student First Technologies, which holds contracts in West Virginia and Tennessee.
Newman told The 74 that expanding programs require different leadership skills and operational capacity than smaller or earlier-stage businesses may have needed. The report also cited a Florida audit that found officials lost track of students moving between district schools and scholarship programs, creating what the audit called a system in which “funding did not follow the child.” That finding concerned Florida’s oversight system; it is not evidence of a specific failure by ClassWallet.
“Lindeman joined as chief operating officer in 2023 as part of a “planned three-year commitment” and will “remain involved in an advisory capacity.””
— Eric Knobloch, ClassWallet spokesman
Capacity and Program Details Remain Open
The report does not explain why Perrotte was selected beyond her prior role as board chair and experience as a software executive. It also does not provide her plans, her priorities for the first months in the role, or details of how responsibilities will be divided with Lindeman in his advisory capacity.
The company says the change was unrelated to the phishing attack, but the source material offers no independent findings about the incident’s scope, the number of affected vendors, or whether any accounts or funds were misused. It also does not say what security changes ClassWallet has made. Separately, Arkansas officials’ concerns are documented, but the available information does not establish the platform’s current status or whether the state has taken further action.
The federal program’s estimated annual funding is not a confirmed amount of money that will flow through ClassWallet. The report does not say whether the company has been selected to administer funds under the federal program, how many participating organizations will use its services, or what operational and oversight requirements will apply. Those details will shape the significance of the CEO change and the demands placed on the company.
Federal Launch Tests Vendor Readiness
The federal Scholarship Tax Credit is expected to launch next year, giving states, nonprofits and service providers time to organize fundraising and distribution. As implementation advances, participation decisions, program rules and vendor arrangements should clarify how the new funding will be administered. The source report does not identify a specific federal launch date or say that ClassWallet has secured a role in the program.
Perrotte’s leadership and the company’s response to state feedback will be watched as ClassWallet continues work in its existing programs. Further information about the phishing incident, the Arkansas platform concerns and the company’s capacity for additional work could help establish whether it is prepared for a larger funding pipeline.
Key Questions
Who is ClassWallet’s new CEO?
Kathy Perrotte, a software executive and the company’s former board chair, has replaced Stephen Lindeman, according to The 74.
Why did Stephen Lindeman leave?
Company spokesman Eric Knobloch said Lindeman’s tenure followed a planned three-year commitment. He is expected to remain involved in an advisory capacity. The company said the change was unrelated to the phishing incident.
What is the federal Scholarship Tax Credit?
It is a federal program that allows taxpayer donations to support educational services such as tuition and tutoring. The source report said it was expected to launch next year and estimated it could generate about $25 billion annually.
Has ClassWallet been chosen to administer the federal program?
The source report does not say that ClassWallet has been selected to administer funds under the federal program. Its role, if any, remains unclear.
What concerns have been raised about ClassWallet’s operations?
An Arkansas education officials’ report said in June that the platform appeared to be maturing too slowly for the state program’s growth and complexity. The source material does not say whether those concerns have since been resolved.
Source: the74million.org
