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.
“Education freedom is the key to unlocking opportunity and success for our next generation of students,” said U.S. Secretary of Education Linda McMahon in a statement issued Thursday. The federal scholarship program, she said, will ensure “every child has access to the education they need, not one limited by ZIP code, family income, or government‑imposed barriers.”
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 a 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 amount.
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. For a family of four in Houston, for example, that equates to more than $300,000.
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.
