Sara Mauskopf
Sara Mauskopf is the co-founder and CEO of Winnie. She’s also the mom of three young children and vocal advocate for high quality child care and early education for all.
In July 2025, the U.S. government passed a major education reform that could significantly expand schooling options for millions of families. Tucked into the broader budget bill known as the One Big Beautiful Bill, the federal government created the first nationwide private school choice program in American history. If you're a parent wondering what this means for your family, you're not alone.
Here's an overview of what the new federal school choice policy does, who qualifies, and how it might impact your family's options for K-12 education.
What Is the New Federal School Choice Program?
The policy centers around a federal tax credit program that incentivizes donations to Scholarship Granting Organizations (SGOs). These SGOs then provide scholarships to families who want to send their children to private schools or access other educational services.
Until now, school choice policies such as voucher programs or ESAs have existed only at the state level. This new federal program creates a nationwide framework that states can choose to opt into.
At the heart of the policy is a tax benefit: individuals or corporations can donate to approved SGOs and receive a dollar-for-dollar federal tax credit, up to $1,700 per individual taxpayer. Unlike a tax deduction, which only reduces taxable income, a tax credit directly reduces the amount of tax owed, making it more financially advantageous.
How the Scholarships Work
SGOs will distribute funds to eligible families to cover a wide range of educational expenses. These may include private school tuition and fees. Each SGO will operate independently, meaning the exact scholarship amounts, eligibility criteria, and application process could vary by organization and by state.
Who Qualifies for Scholarships?
The new program is open to students from families earning up to 300% of their area’s median income. This means eligibility will vary depending on where you live. For example, in a region where the median income is $90,000, families earning up to $270,000 may qualify.
It's also important to note that states must choose to participate in the program. If your state opts out, you won’t be able to access federal school choice scholarships, even if you meet all the other eligibility requirements.
When Will the Program Begin?
The tax credit portion of the program will go into effect on January 1, 2027. That means the first scholarships will likely be distributed for the 2027–28 school year, though exact timing could vary by state and by SGO.
Why This Matters for Families
This federal program could significantly increase access to private education, especially for families who previously could not afford it. It also opens up opportunities for parents to customize their child’s education by choosing the school and services that best meet their needs, whether that's a religious school, a specialized program for students with disabilities, or a school focused on STEM, the arts, or another area.
Because of the generous income cap, this program may also be accessible to families who are typically excluded from public assistance programs.
However, the benefits will depend heavily on how each state chooses to implement the policy. Some states are expected to embrace the program quickly, while others may decline to participate entirely due to political or philosophical opposition to school choice initiatives.
What You Can Do Now
Although the program doesn’t begin until 2027, there are steps families can take now:
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Track your state's response. Monitor whether your state plans to opt in. This information will likely be announced by your state’s Department of Education or governor's office.
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Learn about SGOs. Once your state opts in, SGOs will need to be approved by state officials. Keep an eye out for announcements and start researching their application requirements.
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Plan ahead financially. If you are in a position to donate, you may be able to take advantage of the federal tax credit starting in 2027.
FAQ: Federal School Choice Policy
Will I be able to choose any private school I want?
Yes, assuming your state participates and the school is authorized under the program. Each SGO may have its own list of eligible schools.
How much money can I expect from a scholarship?
It depends. SGOs will determine the amount based on their funding and the number of applicants. Some scholarships may cover full tuition, while others may offer partial support.
Do I have to contribute in order to receive a scholarship?
No. You do not have to donate to receive a scholarship. The donations that trigger the tax credit come from other individuals, corporations, or community organizations.
What if my state opts out of the program?
If your state declines to participate, you won’t be able to apply for these federal scholarships. However, many states have their own school choice programs, which may still be available.
Is this the same as a voucher program?
Not exactly. While it has similar outcomes—helping families afford private education—it’s structured around a tax credit system rather than direct government vouchers.
At Winnie, we’ll continue to track updates and help families navigate their K-12 school options. As the 2027 rollout approaches, we’ll provide more resources to guide you through the process of applying for scholarships, evaluating schools, and understanding your rights and opportunities. Stay tuned!
