Princeton corridor families with K-12 students will be eligible for a new federal scholarship program starting Jan. 1, 2027, after Ohio opted into the first nationwide school choice initiative.

The Federal Scholarship Tax Credit, signed into law by President Donald Trump as part of the One Big Beautiful Bill Act, lets taxpayers donate to nonprofit Scholarship Granting Organizations and claim a dollar-for-dollar federal tax credit of up to $1,700 per individual or $3,400 for married couples filing jointly, according to the U.S. Treasury Department. Those nonprofits then distribute scholarship money to eligible students.

The Treasury Department and Internal Revenue Service (IRS) released proposed regulations on Thursday, Oct. 1. A public hearing is scheduled for Dec. 15.

Who qualifies

Children in elementary through high school whose families earn up to three times the area's median income are eligible. The Treasury Department estimated about 96 percent of children in participating states would qualify, as first reported by the Associated Press.

Families already receiving SNAP, TANF, WIC, Section 8 or Supplemental Security Income (SSI) benefits are automatically eligible without additional income paperwork, according to Education Week. Foster children also qualify automatically.

What the money covers

Scholarship recipients can use funds for private or religious school tuition, tutoring, special education therapies, books and computers, according to Treasury Department officials.

One difference from most state school choice programs: public school students do not have to leave their district to benefit. A Princeton City Schools student could use scholarship dollars for tutoring or special education services while remaining enrolled.

Whether Ohio homeschool families qualify is unclear. Ohio law classifies home education separately from private schools, and Education Week reported that homeschoolers in states without a private-school classification for home education may not be able to use the funds. The IRS has not finalized guidance on the full scope of eligible expenses, calling it a "high priority."

Local context

Princeton City School District is one of more than 300 Ohio districts that joined the "Vouchers Hurt Ohio" coalition challenging the constitutionality of the state's EdChoice voucher program, according to the Cincinnati Enquirer. A Franklin County judge ruled that program unconstitutional in June 2025, and the state appealed. The case was before the 10th District Court of Appeals as of May 2026. No ruling has been reported.

Ohio spent an estimated $776 million for roughly 143,500 scholarships.

The new federal program operates differently. It is funded by private donations incentivized through tax credits, not by redirecting state education dollars. Still, critics argue the effect on public schools is similar. Randi Weingarten, president of the American Federation of Teachers, said in a statement reported by Politico that "for every precious public dollar funneled to private schools under this scheme … public school parents will be hunting for stray pennies on the floor."

The Treasury Department projects the program will direct nearly $26 billion annually into as many as 2.2 million scholarships by 2030. Ohio is among at least 30 states that opted in for 2027, according to the IRS. No Scholarship Granting Organizations operating in Ohio have been publicly identified, and no application portal for families has been announced.