Trump Administration Proposes Rules for Federal School Voucher Program

The Trump administration proposed regulations Thursday for the Federal Scholarship Tax Credit, the nation's first federally funded school voucher program, set to launch January 1. The program offers a 100% federal tax credit for donations to scholarship-granting organizations that distribute funds to families for private school, homeschooling, and other educational expenses.

At least 30 mostly Republican-led states have already opted in, making nearly 96% of children in those states eligible. Unlike many state programs, public school students can also use funds for tutoring or special education therapies without leaving their public schools.

“States cannot restrict the types of schools that benefit, meaning public funds could go toward a religious school that bars LGBTQ students or a private school that doesn't have certified teachers.”

The plan creates a political dilemma for Democratic governors in non-participating states. While most oppose voucher programs, refusing to join means forfeiting federal dollars that could support public school students. Governors have until January 1 to decide whether to participate.

Treasury and Education officials stated that states cannot restrict the types of schools receiving funds, meaning money could go to religious schools that bar LGBTQ students or private schools without certified teachers. The program also simplifies applications for low-income and foster children.

A 60-day public comment period on the proposed rules is now open. The tax credit allows donors to be reimbursed up to $1,700 for every dollar donated, significantly exceeding incentives for charitable giving to churches or hospitals.