21-07-2025
New federal voucher law could add to Arizona school choice programs
Arizona, home to some of the nation's broadest school choice systems, could see even more through a new federal program created this month as part of President Trump's "big beautiful bill," if the state chooses to opt in.
Why it matters: The law creates the first federal school voucher program, known as Qualified Elementary and Secondary Education Scholarships.
How it works: People can contribute up to $1,700 annually to a scholarship-granting organization (SGO) and receive a dollar-for-dollar federal tax credit in return.
Those organizations use the money to award scholarships for expenses like private school tuition, books, equipment, tutoring and other services.
Eligibility is limited to students whose families earn up to 300% of the area median income.
Zoom in: The program bears resemblances to two school choice programs in Arizona.
Under the tuition tax credit program, people can contribute money to School Tuition Organizations (STO) to provide scholarships for private school tuition.
The Empowerment Scholarship Account (ESA) program gives funding, which can be used for tuition, equipment, tutoring and other educational expenses, to students who aren't enrolled in public schools.
Between the lines: The American Federation for Children (AFC), a national school choice advocacy group, touted that in states with preexisting private school choice options, federal scholarships "can be stacked … increasing purchasing power for parents and helping more students."
State law prohibits students from using ESAs and STO money concurrently.
Yes, but: It's unclear whether the federal program will be available to Arizona students, given a provision that requires states to opt in.
The law requires states to annually provide the feds a list of qualified SGOs.
Those decisions will be left to the governor or whichever "individual, agency or entity" state law designates to make determinations regarding federal tax benefits.
In Arizona, the Department of Revenue would likely decide, leaving it to the governor's administration, Arizona Department of Education spokesperson Doug Nick told Axios.
The intrigue: A spokesperson for Gov. Katie Hobbs did not respond to Axios' questions about whether Arizona would opt into the program.
Hobbs has been a vocal critic of ESA program, which she and other Democrats argue siphon money from public schools and are unaccountable to taxpayers.
What's next: The federal program doesn't go into effect until 2027.
The fine print: Unlike ESAs, federal vouchers have income-based restrictions, so not all Arizona recipients would be eligible for both.
What they're saying: "For a generation, our movement has fought to give all families, especially lower-income families, the freedom to choose the best K-12 education … and now President Trump has signed into law the single biggest advancement of that goal," AFC CEO Tommy Schultz said in a statement on the group's website.
