Federal Tax Credit Scholarships May Exclude Homeschoolers

Federal tax credit scholarships, a recent development in educational funding, may inadvertently exclude microschools and homeschoolers due to complex regulatory interpretations. Angela R. Watson, a senior research fellow at the Johns Hopkins Institute for Education Policy, discussed this issue on "The Education Exchange" podcast, episode 460, which aired on September 14, 2026. Watson joined host Paul E. Peterson to explore the potential ramifications of these new scholarship programs, highlighting that the eligibility criteria could present significant barriers for families and institutions operating outside traditional public school systems.

The Federal Scholarship Tax Credit aims to provide financial assistance for educational expenses, theoretically expanding educational choice. However, the specific wording and implementation of the regulations are creating uncertainty. Watson's analysis suggests that the definition of eligible educational institutions or programs within the tax credit legislation might not encompass the flexible and often less formalized structures of microschools and home-based learning environments. This exclusion could undermine the intended purpose of the tax credit, which is to broaden access to diverse educational pathways.

The discussion took place in the context of the upcoming Emerging School Models: Broadening the Landscape for Choice conference. This conference is scheduled to be held at the Harvard Kennedy School’s Program on Education Policy and Governance in Cambridge, Massachusetts, on September 17 and 18, 2026. The conference aims to address the evolving landscape of educational models and the policies that support them, making Watson's insights particularly timely. The potential exclusion of microschools and homeschoolers from federal funding mechanisms raises broader questions about educational equity and the definition of a "school" in contemporary society.

"The Education Exchange" podcast is a platform that delves into critical issues in education policy. Episode 460, featuring Watson's expert commentary, is available on various platforms including Soundcloud, Apple Podcasts, Spotify, and YouTube, as well as directly on the Education Next website. The conversation underscores the intricate relationship between legislative intent, regulatory execution, and the practical realities faced by alternative education providers and families seeking educational freedom. The complexity of the regulations means that while the intent may be to increase choice, the outcome could be a reduction in accessible options for certain segments of the student population.