For the first time, school choice is going national. As part of the One Big Beautiful Bill Act signed by President Donald Trump on July 4, a new federal tax credit scholarship program creates the first nationwide school choice initiative — building on models already in place in states like Alabama.
The federal program, set to begin in 2027, offers taxpayers a dollar-for-dollar income tax credit — up to $1,700 annually — for donations to nonprofit organizations that provide scholarships to eligible K-12 students.
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While Alabama has operated a similar state-level program since 2013, the new federal version has broader income eligibility, no cap on scholarship amounts, and allows funds to be used not just for private school tuition but also for tutoring, therapy and other educational services.
“This is kind of the perfect time for a program like this to come out, because so many families in Alabama are talking about educational options for their kids,” said Andy Ryan, director of the Alabama Opportunity Scholarship Fund, one of the state’s seven scholarship granting organizations, or SGOs, operating under the AAA.
“We’ll be able to do a lot of different things than we’re currently able to do in the state with these [federal] funds,” Ryan said. AAA scholarships are capped at $10,000 per student, but federal scholarships have no cap.
“I’m thinking particularly of all of our families with students that have unique needs, because the [state caps] are much too low to cover the full education for many of those students.”
While Ryan is optimistic, focusing on opportunities available to students, critics of tax credit scholarship programs argue that these initiatives, often referred to as vouchers, divert resources away from public education.
States will have to opt-in to get the federal program up and running.
EDITOR’S NOTE — This story was written by Trisha Powell Crain and originally published by Alabama Daily News.
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