Texas confirmed its intention to join the new federal school grant tax credit program, an initiative stemming from the One Big Beautiful Bill sponsored by President Donald Trump. The announcement was made by Gov. Greg Abbott, who emphasized that the system will expand educational alternatives for thousands of families in the state.
Abbott said in an official statement that the measure is consistent with his administration’s goal of guaranteeing “education freedom” to all Texas households. As he explained, the program offers a Dollar-for-dollar federal tax credit of up to $1,700 per year for those who donate to authorized organizations that provide school scholarships. Contributions beyond this can be carried forward for up to five years.
“Texas has kept its promise to provide educational freedom for all Texas families,” said Governor Abbott. “Thanks to President Trump, generous Texans can receive a tax credit for donations to a qualified scholarship organization to minimize families’ educational expenses. This important program will increase opportunities for families to choose the educational environment that best suits their children. Texas is proud to work with the Trump Administration to empower parents and ensure a better future for our children.”
The program is aimed at students from low-income families equal to or less than 300% of the local average. Scholarships can be used to pay tuition at public or private schools, tutoring, transportation, or special needs assistance. The program comes into force in January 2027However, in order to implement it, each state must confirm its accession.
The announcement came months after Abbott signed legislation creating the Texas Education Freedom Account (TEFA), a state system that the statement said will allow eligible students to direct public funds to authorized education providers. The program has a budget of $1,000 million for the 2026-2027 cycle and is becoming the largest initial launch of education savings accounts in the country.
State authorities stated that the combination of the federal program and the TEFA model will expand the scope of choice for families looking for alternatives to the traditional education system.
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