Nearly all schoolchildren in at least 30 states can apply for a new federal scholarship next year to help pay for private school, homeschooling and other educational expenses, according to regulations proposed Thursday by the Trump administration.
The first national school choice scholarship program, the Federal Scholarship Tax Credit, will launch Jan. 1, establishing a taxpayer-funded incentive for families to choose private or homeschooling in participating states.
California is among the states that has not opted in to the federal program, although state officials have time to participate if they change course.
Taxpayers who donate to an organization passing out the scholarships will receive a federal tax credit, a perk expected to further fuel the conservative school choice movement. California taxpayers can take advantage of the federal tax credit, but the funding they trigger will go to students in other states.
About 96% of children in participating states should be eligible for benefits from the federal program, according to the department.
Children attending public schools could use the scholarships for extra learning expenses. The federal program departs from most state programs by not forcing students to leave public school to qualify for the scholarship. Public school students could use the money for tutoring or special education therapies, although the Republican administration has not provided specific criteria for eligible expenses yet.
Public school officials and advocates generally have no objection to the portion of the program that benefits public school students. In fact, the federal dollars for public school students offer a rare new infusion of federal education support. But the driving force behind the new rules is to provide education dollars that benefit students who are outside the public school system.
School choice scholarships have been available for decades in conservative-led states and throughout the South, giving individual students taxpayer-funded grants ranging from a couple thousand dollars to more than $30,000 a year. In places where they are available to all students regardless of income, such as Florida and Arizona, the majority of students using the money were already in private or home school or were from affluent neighborhoods, an analysis by the Associated Press showed.
California does not provide vouchers or scholarships to students who wish to attend private school or to homeschooling families. However, homeschoolers affiliated with a public charter school can frequently receive education benefits to enhance their homeschooling. Charters are free, privately managed public schools that rely mostly on traditional government-funded education support.
Regulators say they have set up the program in a way that will make it easier for poor students to apply, proposing to let students use proof of participation in a government assistance program in lieu of providing income documentation. Foster children would not have to provide any income verification when they apply, officials said.
Experiences with school choice scholarships in other states have shown barriers to using the programs go beyond paperwork hurdles. Many families often do not know scholarship programs exist. Federal officials have not said how they would tell taxpayers and students about the scholarships.
How the scholarship and tax credit will work
Taxpayers will have the chance to donate to a scholarship program in a participating state, even if they do not live there, starting Jan. 1. Individuals can donate up to $1,700 and receive a federal tax credit for the same amount in exchange. Federal officials propose a couple filing jointly could give as much as double that.
Scholarship organizations in each state would decide how much to grant to each child who applies, depending on available funds and student need. Children could qualify if they are in elementary through high school and their families earn up to three times the area’s median income.
Scholarship recipients could use their funding to pay for religious or private school tuition, homeschooling costs, tutoring and special education therapies, books, computers and other expenses connected to enrollment or attendance, according to officials at the Treasury Department.
At least 30 states have opted in and more may sign up
States could not turn to laws or regulations to narrow the uses for the scholarships or the type of organization that can grant them, federal officials said. That restriction alone has made California less likely to take part in the program. If the state could have limited the benefit to students in public schools, joining the federal program would have been an easy call for California officials.
As of Thursday, the program had not been outright rejected or embraced by Gov. Gavin Newson or state Supt. of Public Instruction Tony Thurmond.
The chance to capture additional federal funding has prompted some more liberal states to opt in. Ultimately, states can choose whether to participate.
According to the most recent Treasury Department list, as of mid-September these states are in for 2027: Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming.
Governors from Arizona, Minnesota, Wisconsin, and Oregon have said their states will not join, with some arguing these programs divert resources from public schools.
More than two dozen states have yet to say what they will do. In New York, Democratic Gov. Kathy Hochul has been supportive and the state is expected to sign up.
Governors deciding whether to participate face many competing objectives and interests. There is the opportunity to bring significant new education money to students who need extra support, such as tutoring or extra speech therapy that their public school does not provide. At the same time, large scholarship programs in states such as Florida and Arizona have accelerated a growing enrollment crisis in public schools.
Even so, the federal program is expected to bring taxpayer money for private school tuition to several states that have yet to embrace vouchers or education savings accounts.
In just a few years, after donations from taxpayers pick up, the IRS and the Treasury Department predict the program will direct nearly $26 billion into as many 2.2 million scholarships each year.
The federal tax-credit scholarship program was signed into law last year by President Trump as his signature tax breaks and spending cuts bill. The public has 60 days to comment on the Treasury Department’s proposed regulations.
Toness writes for the Associated Press. Blume is a Times staff writer.
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