Michigan families could qualify for new federal scholarships to cover private school tuition, tutoring and other K-12 expenses under Trump administration rules that critics say lack adequate safeguards against discrimination and misuse of taxpayer-supported funds.
The proposed regulations, released Oct. 1, could make an estimated 96 percent of schoolchildren in participating states eligible for scholarships beginning in 2027.
The program, authorized under President Donald Trump's 2025 tax and spending law, would offer federal income tax credits to people who donate to nonprofit organizations that distribute scholarships. Thirty states had agreed to participate as of Sept. 14, according to the IRS.
Governors in Arizona, Minnesota, Wisconsin and Oregon have rejected the program, with some arguing it would divert resources from public schools. Other states are still weighing participation.
Michigan has not opted into the federal Education Freedom Tax Credit program. Gov. Gretchen Whitmer has not indicated whether she will make that decision before her term ends.
In Massachusetts, Gov. Maura Healey faces competing demands over a program that would mark a major shift from the state's longstanding policy against taxpayer-funded private school tuition.
The Massachusetts Association of School Superintendents opposes participation, warning that public districts without established fundraising nonprofits would be at a disadvantage against private school networks.
Former Boston City Councilor and public schoolteacher Annissa Essaibi George favors joining. She argues Massachusetts taxpayers could direct donations to scholarship organizations in other states regardless of Healey's decision, missing an opportunity to bring money to Boston students.
The disagreement illustrates the choice facing holdout states: whether the program would bring additional educational resources to students or put already struggling public schools at a disadvantage.
Here's what Michigan families should know.
K-12 students whose families earn no more than 300 percent of the median income in their area could qualify.
That's a high ceiling. In some communities, families earning more than $300,000 annually could qualify, according to The Associated Press.
Treasury officials estimate about 96 percent of schoolchildren in participating states would meet the income requirements.
There is no fixed scholarship amount. Nonprofit scholarship organizations would decide which eligible students receive awards and how much, based on available donations and their award policies. Qualifying would not guarantee a scholarship.
Michigan does not have a state-funded private school voucher program, Education Savings Account (ESA), or state tax-credit scholarship program.
Florida, Ohio, Wisconsin and North Carolina have voucher programs. Arizona and West Virginia offer education savings accounts, while Pennsylvania has tax-credit scholarship programs. Eligibility and funding vary by state.
Unlike state vouchers, which generally use public funds to pay participating schools, the federal program would rely on private donations subsidized through federal tax credits. It would operate separately from existing state programs, potentially providing families another source of assistance.
The nonprofit EdChoice, which advocates for school choice, maintains a state-by-state dashboard of programs, participation, eligibility and funding.
Private donors would provide the scholarship money, but federal taxpayers would help cover the cost through tax credits that reduce government revenue.
Beginning Jan. 1, 2027, someone donating $1,700 to an approved scholarship organization could get $1,700 knocked off their federal income tax bill. Married couples filing jointly could claim up to $3,400, provided they owe enough federal income tax to use the full credit.
The nonprofit organizations would use the donations to award scholarships for qualifying K-12 expenses.
The federal government wouldn't send scholarship checks directly to families. Instead, it would collect less in taxes from donors. Treasury officials estimate the program could generate nearly $26 billion in annual donations by 2030, with a corresponding loss of federal tax revenue.
Scholarships could cover private or religious school tuition, tutoring, textbooks, computers, educational supplies and certain special education services.
Public school students could also qualify for help paying for tutoring, specialized services and other eligible expenses. Families wouldn't have to leave public schools to benefit.
The proposed federal rules do not require all private schools receiving scholarship money to be accredited. Instead, they rely on state laws defining elementary and secondary schools. Accreditation, licensing and other requirements vary by state.
The rules also limit states' ability to impose additional restrictions on scholarship organizations based on the types of schools students attend.
Homeschooling families could qualify for help with instructional materials, tutoring, computers and other educational expenses, depending on state law and federal eligibility requirements. They would not receive automatic cash payments. Scholarship organizations would handle payments or reimbursements for documented qualifying expenses.
Treasury officials say further guidance is needed to clarify which schools and expenses qualify.
Parents can check the Department of Education's state-by-state guidance for private school and homeschooling requirements.
MichiganPrivate schools must participate in the following accreditation programs: Michigan Association of Nonpublic Schools or North Central Association.
Michigan is widely considered homeschool-friendly, with no registration, testing or routine reporting.
The debate comes down to who gets the money, which schools benefit and who's watching the spending.
The Center for American Progress, a progressive policy organization, warns that taxpayer-subsidized scholarships could flow to unaccredited, poorly performing private and religious schools without adequate protections against discrimination and fraud.
Critics also worry that wealthy families already paying private school tuition could benefit while lower-income students compete for limited scholarships.
Oversight is another concern. Scholarship organizations would have to submit financial reports and undergo independent annual audits, safeguards federal officials say would help prevent fraud and misuse of funds. Critics argue those requirements aren't enough, particularly because states would have limited authority to impose tougher standards or influence how organizations select scholarship recipients.
Supporters say the scholarships would expand educational choices and make private schooling and tutoring affordable for more families.
Treasury officials estimate the program could support as many as 2.2 million scholarships annually by 2030.
The public has until Dec. 1 to comment on the proposed rules, with a Treasury Department hearing scheduled for Dec. 15.
The program launches Jan. 1, 2027, but families won't apply through a single national system. Participating scholarship organizations will set application procedures, select recipients and determine award amounts.
Families can follow updates on the IRS Federal Scholarship Tax Credit website.
The Associated Press contributed to this report.
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