David 
By Brian Jodice, National Press Secretary, American Federation for Children
In a landmark move for American families, the One Big Beautiful Bill Act (OBBBA) ushers in the most significant federal advancement for school choice in history. By establishing a permanent, uncapped 100% federal scholarship tax credit, the OBBBA opens the door for millions of families to access a broader range of educational opportunities, driven by philanthropic support and student-centered funding.
At its core, the tax credit scholarship empowers individual taxpayers to contribute up to $1,700 to non-profit scholarship granting organizations (SGOs), receiving a dollar-for-dollar federal tax credit in return.
This credit is federal tax law, not education policy, and bypasses the U.S. Department of Education entirely, an important qualifier that aligns with President Trump’s mandate to send education back to the states. It also carefully coordinates with state-level programs, ensuring a seamless, scalable structure for national participation.
To take part, states will opt in and, once participating, submit annual lists of approved SGOs, which must meet a set of standards, including providing scholarships to students at multiple schools, prioritizing returning students and siblings, and allocating 90% of donations directly to scholarships. Importantly, SGOs are barred from earmarking scholarships for specific individuals and must separate federally qualified funds from other revenue sources.
Eligibility for students is equally expansive: families earning up to 300% of the area’s median income – roughly 90% of students nationwide – qualify. Scholarships can cover a wide range of qualified expenses, from tuition and tutoring to curriculum materials, special needs services, transportation, and technology.
This new federal tax credit generates publicly supported, privately funded scholarships. It is not a voucher. This is not a federal program.
OBBBA’s tax credit is a bold, legally sound mechanism for giving families control over their children’s education, regardless of income or zip code. And with implementation rules coming from the U.S. Treasury Department – not Education – it sidesteps bureaucratic gridlock and preserves state and local control.
As the law takes effect on January 1, 2027, it signals a monumental shift: the federal government is finally using its tax code to back parents, not systems. For the school choice movement, for American families, and most of all, for children, this is history in the making.
And the best part–Governors maintain the choice to opt-in to this program. Hopefully, Governor Dunleavy will choose for the kids!
And you can hear the details from Leslie Hiner of EdChoice.or at our October 11 event. Register here: https://ak4pf.org/2025-conference/
For more information go to www.federationforchildren.org
