The Friedman Foundation for Educational Choice

Advancing Milton and Rose D. Friedman's Vision of School Choice for All Children

Indiana HB 1003 Overview


HB 1003 establishes a new school voucher program, expands Indiana’s preexisting tax credit scholarship program and institutes a tax deduction for families with children homeschooled or already enrolled in private school.

Establishment of Indiana’s New School Scholarship Program


Any child who attended a public school for the preceding two semesters and who does not come from a family whose income exceeds 150% of the federal free-and-reduced-price lunch program is eligible to receive a scholarship to attend any approved and/or accredited private school.

Student Eligibility

  • Children in 1st- 12th grade who attended a public school for the preceding two semesters and who are from families earning 150% of the federal free-and-reduced price lunch program, which is $61,190 for a family of four.
  • By the end of the third year, approximately 60% of the state’s entire student enrollment, or 600,000, will be eligible to receive a voucher. In the first year, however, the program is capped at 7,500 children. In the second year, it is capped at 15,000.

Scholarship value

  • Children who qualify for the federal free-and-reduced price lunch program will be eligible to receive a voucher worth up to 90% of the state tuition amount for the sending school district. Children from families earning up to 150% of the federal free-and-reduced price lunch program will be eligible for a voucher worth up to 50%.
  • The maximum scholarship for a child enrolled in 1-8 is $4,500.
  • A family is allowed to supplement the voucher.
  • There is no overall financial cap on the program.

Regulations on the program

  • Non-public schools that voluntarily agree to participate must be accredited by either the state board or a national or regional accrediting agency that is recognized by the state board.
  • Non-public schools must administer the state test, ISTEP, and submit testing data to the Department of Education so that they, like all public schools in the state, can be assigned a letter grade, A-F.
  • Non-public schools are allowed to utilize their own admissions standards for students but can’t discriminate on the basis of race, color or national origin.
  • Non-public schools must hold a lottery if oversubscribed.
  • Accredited Non-public schools already have a number of regulations that they adhere to regarding the keeping of documents and various instructional requirements; these requirements would now extend to non-state accredited Non-public schools that participate in the program.

Expansion of Indiana’s Tax Credit Scholarship Program


In 2009 Indiana passed a school scholarship tax credit program that allowed individuals and corporations to claim a 50% tax credit for contributions to approved scholarship granting organizations that distribute scholarships to children from families who earn up to 200% of the Federal free-and-reduced-price lunch program. The program serves entering kindergartners and children in grades 1-12 HB 1003 expands the total amount of the tax credits available from $2.5 million to $5 million and makes changes that allow scholarship granting organizations to serve two or more private schools.

Establishment of Indiana’s New Tax Deduction Program


Any taxpayer who has a child already enrolled in a private school or who is homeschooled will be eligible to claim a $1,000 tax deduction per child for approved educational expenses including private school tuition, textbooks, fees, software, tutoring and supplies.

Overview of Votes on HB 1003

Senate Education Committee
Senate floor
House Education Committee
House floor
House concurrence