Education Savings Accounts (ESAs)
An ESA is a government-funded account
that allows parents to use state funds to
pay for approved education expenses like
private school tuition, tutoring, or curriculum
materials for their child. These are often
called “scholarship accounts.” West Virginia’s
Hope Scholarship Program and Arizona’s
Empowerment Scholarship Accounts are
two examples. Because these are public
programs, the money comes from taxpayers
and public funds.
Some states (including West Virginia and
Arizona) have created a separate category
for students who participate in ESAs. While
these students might consider themselves to
be homeschooled, they are legally distinct
from traditional homeschool students under
state law. Homeschool advocates pushed
for this distinction to help protect privately
homeschooling families from the potential of
additional regulations.
Coverdell Accounts and 529 Plans
These are privately funded savings accounts
that help families set aside money for
education expenses by providing them with
tax benefits on the money they save. Coverdell
Accounts are federally regulated, whereas
529 Plans are regulated at the state level.
Originally, these accounts were designed just
for college costs, but now parents can use the
funds for certain K–12 expenses as well.
Unlike ESAs, parents put their own money
into Coverdell Accounts and 529 Plans, rather
than funds from the government. Because
the money grows tax free and withdrawals
for approved expenses aren’t taxed, these
programs help parents save their own money
more effectively for their children’s education,
while also keeping more of it.
Only Wyoming doesn’t have a 529 Plan, but
these plans are not restricted by residency,
so you can sign up for one in another state.
However, these programs have mostly been
limited to private K–12 education for families
with children in traditional brick-and-mortar
schools. But recent legislative changes now
allow parents—starting in future tax years—to
use them for certain homeschool expenses in
states that classify homeschooling as a form
of private school.[3]
Scholarship Granting Organizations (SGOs)
An SGO is a nonprofit that collects
private donations and uses them to award
scholarships to help students attend private
schools or pay for school expenses. States
often give tax breaks to individuals or
businesses that donate to SGOs. But once
again, this is private money being used, not
public dollars.
For example, Arizona has the Arizona
School Tuition Organization. Donors receive
a dollar-for-dollar credit against their Arizona
state income taxes for their contributions
and eligible students can qualify for a
scholarship for education expenses.
Recently passed federal legislation created
a new federal tax incentive for taxpayers who
donate to state SGOs. Although the program
won’t take effect for several years—and the
treasury department hasn’t even started
drafting regulations—we expect SGOs to
become increasingly common in the
years ahead.
Tax Credits
A tax credit directly reduces the amount
of taxes you owe. Tax credits are either
refundable or nonrefundable.
Nonrefundable tax credits can reduce your
taxes owed to zero but stop there. For example,
if you owe $200 in taxes, a nonrefundable tax
credit can reduce the amount owed to $0. This
helps families keep more of their own money
by lowering their tax bill, enabling them to use
their savings for private education expenses
like tutoring or curriculum.
Some states, like Ohio, have a nonrefundable
tax credit that requires parents to submit
receipts showing that they spent the money
on approved educational expenses. However,
not all operate that way. HSLDA has written
a model bill that allows parents to receive a
nonrefundable tax credit without submitting
itemized receipts.[4]
Refundable tax credits can reduce your
total taxes owed below zero. For example, if
you owe $200 in taxes and have a refundable
credit worth $250, the state will pay you
$50—the amount over what you owed. When
this happens, the government pays you the difference in a “refund.” This type of
credit combines private and public funding:
Families keep their own money while also
receiving additional state funds to pay for
their child’s education.
In Oklahoma, homeschooling families can
claim up to $1,000 per student for qualified
educational expenses like curriculum and
standardized test fees. If the amount of taxes a
family owes is less than the amount the family
paid in qualified educational expenses, the
family can get a “refund” for the difference.
Tax Deductions
A tax deduction reduces the amount of
income that is subject to tax, which can
lower your overall tax bill. As a simplified
example, if you earn $5,000 and claim a $1,000
deduction, your taxable income will drop to
$4,000. This puts more money back in the
pockets of parents by lowering the income
that the government taxes.
As an example, Indiana allows families in
private schools or homeschools to claim a
$1,000 per child tax deduction on their state
income taxes.[5]
Vouchers
A voucher is a government-funded
certificate that parents can use to pay for
tuition at a private school instead of sending
their child to a public school. Like an ESA, it
is public funding of a child’s education. The
key difference is that with a voucher, the
money goes directly to the private school,
whereas with an ESA, the funds are deposited
into an account that parents can use for a
broader range of educational expenses.
Vouchers generally cover tuition at
approved private schools, excluding
homeschooling. However, some private
schools design programs where students
receive the school’s curriculum but complete
their learning at home, sometimes with
parent instruction. In these cases, the
students are legally classified as private
school students—even though their day-today education resembles homeschooling.
Wisconsin has a large private school that
structures its voucher program this way.
state funding
Accepting
“
doesn’t just
bring additional
regulation—it
subtly shifts
responsibility
for education
from parents to
the state.
Public vs. Privately Funded Education
In the end, not all education funding ideas
are created equal. Some—like private savings
accounts or tax deductions—simply let families
keep more of their own money. Others—like
ESAs or vouchers—bring public dollars into
the mix and can open the door to additional
government oversight. Understanding these
differences can help homeschooling families,
voters, and lawmakers support policies
that expand educational freedom without
compromising the independence that makes
homeschooling thrive.
At HSLDA, we believe that homeschooling
works because it lets families shape learning
around a child’s unique needs. But that
success depends on parents retaining
flexibility and authority over their child’s
education. Maintaining that authority isn’t
just about daily decisions. It reflects that
parents are ultimately responsible for their
child’s education. Public funding threatens
both. As Mason put it in his article, “Taxfunded ESAs are premised on the notion
that the education of children is primarily
a state responsibility based on the interests
of the state.”
Accepting state funding doesn’t just
bring additional regulation—it subtly shifts
responsibility for education from parents to
the state, opening the door for more oversight
and regulation. Keeping homeschooling
independent ensures families retain both
authority and responsibility for their
children’s learning.
HSLDA opposes public funding for
homeschooling as a policy matter, for what
we perceive as the long-term risks it brings.
But we would never judge a family for the
choices they make in the best interests of
their children.
