The School Choice Credit Is Here—What Parents Need to Know

On July 4, 2025, something big happened in Washington, D.C.—and it could dramatically expand education options for families across the country. 

Tucked into the newly signed One Big Beautiful Bill Act (OBBBA) is a provision called the School Choice Credit, and it’s being called one of the most ambitious federal education policies in decades. Whether your child is in public school, private school, or homeschooled—or you’re exploring a change—this is something every parent should have on their radar. 

Let’s break it down. 

So, What Exactly Is the School Choice Credit?

Think of it as a new way to fund scholarships for K–12 students—not through government spending, but through private donations that come with a 100% federal income tax credit. 

Here’s how it works: 

• Taxpayers donate cash to a qualifying Scholarship Granting Organization (SGO) and can get every dollar back as a tax credit, up to $1,700 per year. 

• Those SGOs then use the money to award scholarships to students—covering everything from tuition and tutoring to curriculum, transportation, even internet access. 

• The credit is non-refundable, and you can’t also claim a charitable deduction for the same gift. 

This means more funds for families to access the schooling that best fits their child—without dipping into federal education budgets or increasing federal oversight. 

Who’s Eligible?

Here’s the good news: about 90% of U.S. families may qualify for scholarships funded through this program.  

To be eligible: 

• Students must be eligible to attend public school in Maryland. 

• Families must earn less than 300% of their area’s median income (for example, if the local median is $90,000, the cap would be $270,000). 

• SGOs must award scholarships to more than one school and follow strict transparency rules. 

But Here’s the Catch: Maryland Has to Opt In

This is not automatic. Maryland needs to opt in to allow SGOs and families to participate. 

That means if Maryland’s leadership chooses not to join the program, the benefits—including scholarships—won’t be available to families there. 

• What can you do? Contact the governor’s office or Maryland’s education agency and ask whether they plan to participate. If they haven’t decided yet, speak up and share why it matters to your family. 

What Can Scholarships Pay For?

A lot more than just tuition. Eligible expenses include: 

• Private school tuition 

• Homeschooling materials 

• Curriculum and technology 

• Tutoring and special education services 

• Transportation 

• Internet access 

There are no restrictions on what kind of K–12 school a family chooses-even religious and faith-based schools are included. 

When Does It Start?

The School Choice Credit goes live on January 1, 2027, but there’s plenty families can do to prepare now. 

How Parents Can Get Ready

Here’s your to-do list: 

1. Watch For Updates. Find out if Maryland is joining the program. If not, get involved by contacting your state and local representatives. 

1. Research SGOs. Look up which Scholarship Granting Organizations may operate in Maryland. 

1. Talk to a Tax Professional. If Maryland begins to offer education tax credits, you might be able to stack benefits with the federal program, but the rules will vary. 

1. Explore School options. This might be your chance to consider a different kind of education—whether that means smaller class sizes, a faith-based curriculum, or something more flexible for your child’s needs. 

The Bottom Line

This isn’t a school voucher. It is a federal tax incentive for private giving—built to grow access to alternative education pathways while letting parents remain in control. Supporters say it will supercharge school choice across the country, and here in Maryland. Critics worry it may draw attention and resources away from traditional public schools. But no matter where you land, one thing is clear: families will soon have more options than ever before. Now’s the time to get informed, get involved, and prepare for what’s ahead.