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Federal scholarship for private school and homeschooling will be open to most kids in 30-plus states

Oct 1, 2026, 6:23 AM | Updated: 6:52 am

FILE - Sixth graders read a passage and give constructive feedback to their partners during Nancy B...

FILE - Sixth graders read a passage and give constructive feedback to their partners during Nancy Barajas' class at Fairview Elementary School on Wednesday, May 6, 2026, in Modesto, Calif. (AP Photo/Annie Barker,File)
Credit: AP Photo/Annie Barker

(AP Photo/Annie Barker,File)

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 proposed regulations issued 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. 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.

About 96% of children in those states should be eligible, according to the department. Children attending public schools could use the scholarships for extra learning expenses.

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.

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.

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.

30-plus 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.

But states can choose whether to participate in to the program. More than 30 states, mostly in the South and conservative-led, have opted in. Colorado, New York and New Hampshire have signed up, too. 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, including California, New Mexico and Massachusetts, have yet to say what they will do.

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, including Colorado, Nebraska, New York and North Dakota, 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 Donald Trump as his signature tax breaks and spending cuts bill. The public has 60 days to comment on the Treasury Department’s proposed regulations.

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The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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