Parents and students across the country have reason to celebrate after President Trump signed the "One Big Beautiful Bill Act" into law on Independence Day.
For the first time in U.S. history, the federal government established a tax credit to provide scholarship funding for students’ kindergarten through 12th grade education. This marks a historic step toward universal education choice, parent-directed funding, and freedom from failing systems.
The first ever federal tax credit scholarship will mirror successful programs in 23 states. Beginning a year and a half from now, the program will allow every individual taxpayer to donate up to $1,700 per year to a nonprofit scholarship granting organization and receive a dollar-for-dollar credit on his or her federal tax bill. In other words, if you value giving children more educational opportunities, there is no reason not to give to the program, as you would be paying either the federal government or a nonprofit that you believe in.
The nonprofits will collect the funds and distribute them on behalf of worthy students to help pay for private school tuition, tutoring, online courses, dual enrollment, or special education services. This is a broad array of allowable expenses that could include such customized learning options as online courses, faith-based programs, or even hybrid microschools. The scholarships are aimed at children who need them most: students must be members of a household with income no greater than 300 percent of the average income in their geographical area. The scholarship amounts and who will receive them will be left up to the nonprofits, subject to the nonprofit being approved for the program by the state. The law truly empowers both families to choose the best education and donors to choose how their funds are best spent.
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In the final days before passage, the Senate added a provision to the tax credit scholarship program to allow governors or other individuals designated by state law to decide whether to opt their states into the program. Critics claimed this will prevent school choice from entering Democrat-controlled states, but that need not be the case. The traditional argument against school choice does not apply to this program. Opponents often claim that state tax credit programs take local money away from public schools, but this program is paid for entirely by private donors. There should be no reason for Democratic or Republican governors to leave this money on the table and leave their state’s children out of the benefits being offered.
For over 25 years, tax credit scholarship programs have helped families access better educational opportunities. First launched in Arizona in 1997, these programs now serve more than 325,000 students annually, most from low- and middle-income households. Research shows that they have improved parent satisfaction and expanded access to private, faith-based, and specialized education settings.
Even research from progressive think tanks like the Urban Institute have found that students in Florida’s tax credit scholarship program—including those from low-income backgrounds—are more likely to enroll in college and persist through graduation. Tax credit scholarship programs also deliver fiscal savings to states, as average per-pupil costs are lower than those in traditional public schools. In short, tax credit scholarships have proven to be a durable, cost-effective, and equitable model of school choice, delivering consistent success across diverse states for decades.
Enacting tax credit scholarships into federal law is a huge win for families, especially those that have never had access to school choice before. When governors are finally willing to put students over politics, families in every state will have a pathway for real education opportunity. The "One Big Beautiful Act" sent a clear message that, in America, every child deserves the chance to succeed, and every family deserves the freedom to choose how.
Erika Donalds serves as Chair of Education Opportunity at the America First Policy Institute.
Editor's Note: President Trump is fighting to dismantle the Department of Education and ensure America's kids get the education they deserve.
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