For most of American history, where you lived determined where your child went to school. That’s changing fast. More than 1.3 million students now use a state-based private school choice program, up 25 percent from a year ago, according to SPN partner EdChoice.

Seventeen states currently offer choice programs open to all students regardless of income, and the number keeps growing.

But “school choice” isn’t one thing, and states fund their programs in very different ways. The structure behind a program shapes how much flexibility families actually get, how quickly it can grow, and how well it holds up in court.

There are four main funding models, and many states choose to embrace multiple rather than just one.

Education Savings Accounts

Education savings accounts, or ESAs, have become the go-to model for new school choice programs. The state deposits a set amount into a dedicated account for each participating student, and parents have the latitude to spend that money private school tuition, or other approved educational expenses like tutoring, curriculum materials, therapies, transportation, or technology.

The Goldwater Institute pioneered the ESA concept in Arizona, where the first program launched in 2011 and now serves more than 100,000 students. Florida runs the largest ESA in the country, with more than 3.3 million students eligible and roughly $3.7 billion in annual spending.

In Texas, the Texas Public Policy Foundation spent years building the case for education freedom before lawmakers passed a universal ESA in 2025, a $1 billion program offering $10,000 per child. Tennessee, Wyoming, New Hampshire, and several other states also launched or expanded ESA programs that same year.

Pros:

  • Broadest flexibility. Families can mix and match schools, tutoring, therapies, and other services from one account.
  • Strong appeal to families with children who have disabilities or unique learning needs.
  • Scalable design that states can launch targeted and expand over time.

Cons:

  • More administratively complex for families and states.
  • Requires robust systems to verify spending and prevent misuse.

Tax-Credit Scholarships

In this type of program, rather than funding accounts directly, the state offers tax credits to individuals or corporations who donate to nonprofit scholarship-granting organizations, known as SGOs. Those organizations then award scholarships to eligible students. The donor receives a dollar-for-dollar credit on their tax bill. The student gets a scholarship. And because the money flows through private donations, public funds never technically leave the treasury.

Today, 18 states operate 22 such programs. Florida’s tax-credit scholarship ecosystem, administered largely by Step Up for Students, serves hundreds of thousands of students. Alabama’s CHOOSE Act, signed in 2024, uses a tax-credit ESA hybrid offering families up to $7,000 per child.

The model just got a major boost at the federal level. The One Big Beautiful Bill Act created the first-ever federal tax-credit scholarship. Beginning in 2027, individual taxpayers can claim up to $1,700 in credits for donations to qualified SGOs.

As of early 2026, 23 states have opted in. For states that have never had a school choice program, this federal framework offers a ready-made on-ramp.

Pros:

  • Strong legal footing. Courts have generally upheld the model because public funds don’t flow directly to private schools.
  • Established track record in 18 states.
  • The new federal program creates a nationwide on-ramp.

Cons:

  • Funding depends on donor participation, so the total pool can be unpredictable.
  • Credit caps can limit the number of scholarships available.
  • Programs tend to be narrower than ESAs in what expenses they cover.

Vouchers

Vouchers are the oldest and most straightforward approach to funding school choice. The state redirects a portion of per-pupil funding and gives it directly to families as a scholarship for use at a participating private school. Unlike ESAs, vouchers are typically limited to tuition and fees.

Milwaukee launched the first modern voucher program in 1990, and the model has been a pillar of the school choice movement ever since. Ohio now operates one of the largest voucher systems in the country through its EdChoice Scholarship. Indiana’s Choice Scholarship went universal in 2025.

Pros:

  • Simple and easy to understand. Families pick a school, the money follows the child, and the school handles the rest.
  • Easiest to administer of any mechanism.

Cons:

  • Limited to tuition and fees.
  • Vouchers have faced significant legal challenges. In 2025, an Ohio judge ruled the EdChoice program unconstitutional (the case is being appealed), and Utah’s universal voucher was struck down as well.

Individual Tax Credits and Deductions

Individual tax credits and deductions are the most modest tool in the school choice toolkit. These programs let families reduce their own tax bills based on qualifying education expenses like tuition, textbooks, tutoring, or homeschool costs.

Minnesota adopted the first education tax deduction back in 1955. More recently, Idaho broke new ground in 2025 with a refundable parental tax credit of up to $5,000 per child, with $7,500 available for students with disabilities. The law survived a constitutional challenge when Idaho’s supreme court unanimously upheld it in February 2026.

Pros:

  • Simple and direct with minimal government involvement.
  • No accounts to manage, no SGOs, no bureaucratic middlemen.

Cons:

  • Only helps families who owe enough in taxes to benefit, which can leave lower-income households behind unless the credit is refundable.
  • Dollar amounts tend to be smaller than ESAs or vouchers.

Where the Momentum Is

The trend line points clearly toward ESAs. Since 2021, education savings accounts have been the preferred vehicle for states launching or expanding school choice. Nine states enacted universal ESAs in just the last few years, and ESAs drove the largest growth in participation during 2025.

Tax-credit scholarships are gaining new momentum from the federal program, which could bring school choice to states that have never had it. Vouchers remain a force in many states but face legal turbulence that may slow new adoption. Individual credits are a useful entry point, though on their own they are unlikely to drive large-scale change.

Increasingly, though, states are choosing to go with a combination of approaches. The James Madison Institute, an SPN affiliate, has documented how Florida’s layered approach — combining tax-credit scholarships, vouchers, and ESAs — gives families multiple pathways to education freedom.

What all four approaches share is a core principle: families, not systems, should decide how children are educated. The mechanisms differ, but the goal does not.