Funding Expands, Access Grows, and New Battles Emerge in 2026

State of Choice 2026 Legislative Session in Review

With most legislative sessions winding down in 2026, no new choice programs have been created, but the volume of legislation impacting educational freedom remains high. However, our team has also seen an uptick in hostile bills that would adversely impact education choice. So far, at least three states will likely increase funding for their programs, two states have increased access to their programs by broadening eligibility, and nearly 30 states have opted in to the Federal Tax Credit for Scholarships program.

Efforts to Fund Existing Programs

• Alabama Gov.Kay Ivey signed a state budget that included $250 million to cover the costs for around 50,000 students who have applied to participate in the Alabama Creating Hope and Opportunity for our Students’ Education (CHOOSE) ESA program.
• Missouri’s Tax-Credit ESA, the MOScholars program, received a $60 million appropriation in the budget (HB 12), a $10 million increase from its previous appropriation. Gov. Mike Kehoe is expected to sign it.
• Oklahoma Gov. Kevin Stitt signed HB 3705 into law, which increased funding for the Oklahoma Parental Choice Tax Credit program from $250 million to $275 million.

States Broaden Eligibility

• Tennessee increased the enrollment cap for its Education Freedom Scholarship program from 25,000 to 35,000 students following Gov. Bill Lee’s signing of SB 2247/HB 2532. The increase in the cap will immediately provide relief for thousands of families on the program’s waitlist.
• South Dakota also expanded its Partners in Education Scholarship tax-credit scholarship through SB 84, signed by Gov. Larry Rhoden. The bill raises the family income threshold from 150% to 200% of the federal free- and reduced-price lunch eligibility line and increases the maximum award. Average scholarships can now cover up to 100% of the state’s per-pupil share — roughly $5,000 per student.

Implementation and Cleanup

• The Texas Comptroller’s office has moved forward to fund approximately 95,600 Texas Education Freedom Accounts (TEFAs). This means the entire Tier 1 category — students with qualifying disabilities and their families who are at or below 500% of the federal poverty line — received an account, and 20,000 students from Tier 2 — families with a total income of at or below 200% of the federal poverty line — will receive accounts. With more than 274,000 applications received, around 178,400 students remain on the waitlist. Families who were awarded TEFAs have until July 15 to formally confirm their enrollment.
• Idaho reopened its application window for the state’s refundable tax credit. After receiving over 13,000 applications, not all students met the qualifications or were approved, leaving roughly $7 million available for distribution.
  
  Separately, a small cleanup bill (HB 934) clarified language in Idaho’s program. Some of the notable changes the bill made included:
  • Children ages 5 to 18 may qualify at any time during the tax year.
    • Parents can receive funds for purchasing services from more than one vendor.
    • Tax credit recipients may participate in non-academic activities at public schools, including sports.
    • Families may use funds on courses affiliated with the Idaho Digital Learning Alliance.
• The New Hampshire House and Senate passed HB 1817, which ensures that Education Freedom Account (EFA) students have access to district programs and are not subject to more restrictive participation requirements. The bill now awaits Gov. Kelly Ayotte’s signature.
• Iowa’s Gov. Kim Reynolds signed HF 2754, which updates the state’s ESA, strengthens its charter school sector, and expands independent instruction. For example, limits on the number of unrelated students in cooperative independent private instruction settings were removed, enabling greater growth in microschools. Another notable change was the addition of a December ESA application window, allowing students to access half of the funds for second-semester enrollment.

Hostile Efforts

• “Unbundlers” have come under attack in South Carolina, as an effort to remove homeschoolers from the Education Scholarship Trust Fund program has been included in the budget. This effort will be debated in the conference committee, but if added and passed, it will prevent any homeschooler from using the program moving forward.
• Utah’s legislature considered further regulation of its ESA through HB 467, which Gov. Spencer Cox signed into law. The Utah State Board of Education has greater authority over the interpretation and compliance of policy. Additionally, online and virtual schools are treated as vendors rather than private schools, so families attending an online school receive the homeschool scholarship amount ($4,000 for students aged 5-11 or $6,000 for students aged 12-18) instead of the standard $8,000 award. Some positives from the bill included requiring applications to be processed by families (i.e., siblings together) and granting ESA recipients the same extracurricular access at public schools as homeschoolers.
• In West Virginia, a proposal to impose new restrictions on the Hope Scholarship Program was withdrawn in the House Finance Committee. The proposal would have limited scholarship funds, capped award amounts, required participating schools to operate solely in West Virginia, and required Individual Instruction Program students to take the state’s public-school assessment. Participating families advocated at the State Capitol to oppose this measure.

Changes Proposed but Not Enacted

• The Mississippi House passed HB 2, legislation to create a robust education savings account program, but it was killed in the Senate Education Committee in February. The Senate Education Committee’s decision received pushback from both Mississippi Gov. Tate Reeves and House Speaker Jason White.
• The Louisiana House approved Gov. Jeff Landry’s proposal to double the LA GATOR appropriation to $87.5 million, but those hoping for additional funding for the program will have to wait. The Senate Finance Committee held a hearing on the bill (HB 1) and stripped the proposed new GATOR funding. This is the same committee that cut LA GATOR funding last session. 
• Minnesota’s education savings account proposal, House File 19, reached the House Education Committee. Although the bill did not advance to a full-floor debate, the hearing on its merits was an important step for the state.
• Wyoming introduced a new ESA proposal as a backup plan in case of legal challenges to the Steamboat Legacy Scholarship. The proposal was defeated on the House floor. But it did not matter in the end as the Wyoming Supreme Court upheld the original Wyoming Steamboat Legacy Scholarship program earlier this month.
• Kansas battled to double its tax credit scholarship program, increasing it from $10 million to $20 million, but HB 2468 was vetoed by the governor and ultimately lacked enough legislative support for an override.

Federal Tax Credit for Scholarships

As of May 20, 2026, nearly 30 states have announced their participation in the program. Notably, New York Gov. Kathy Hochul became the second Democratic Governor to publicly announce her plans to opt her state into the Federal Tax Credit for Scholarships program. The impact of Governor Hochul’s decision could be a bellwether for other Democratic governors.

Looking Ahead

As expected, 2026 has highlighted the importance of protecting existing programs from regulatory creep. Still, it is remarkable to consider how many states are moving closer to Milton and Rose Friedman’s vision of true educational freedom. Undoubtedly, there is more to be done, but we remain committed to helping every family choose the best education for their kids.