Public Comment Needed on Allowing Federal Scholarships for Microschools

Will families be able to use scholarship dollars from the new federal scholarship tax credit passed this summer to pay for their children to attend microschools? The answer is not clear in current rules, and may depend on legal definitions which remain to be determined by the government officials in charge of the program.

The microschool community across the nation has a crucial opportunity which closes December 26, 2025 to let decisionmakers know their thoughts on whether microschools should be allowed as an approved expense for program dollars. The United States Treasury Department issued proposed details for implementation for public comment to be accepted only for the next two weeks.

You can read the details about what is being proposed and asked for here.

Allowable uses for the scholarships include, “Certain expenses incurred at, required by, or provided by a public, private, or religious school.” Today’s microschooling movement is comprised of microschools organized in lots of different ways, based upon what makes the most sense under their particular states’ laws and frameworks.

Because state education laws governing private schools vary so widely, microschools in some states are able to operate as private schools, while in others, the flexibility by which microschools are able to provide the innovative models their families seek is best achieved through opening as learning centers serving families following their states’ homeschool requirements.

When elected lawmakers chose the specific language in the law to describe how the funds could be spent, they decided to utilize a definition which has been in statute since 2001, part of the legislation that created the Coverdell Education Savings Account program.

According to this definition, "The term “school” means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law." But in the highly innovative world of microschooling, where families are able to unbundle and selectively curate the different components of their child’s learning programs, traditional definitions of school do not always accurately apply.

Senator Paul Coverdell of Georgia, the plan’s chief architect, was a believer that parents deserve the opportunity to choose the best options to educate their children in this way. "The point is that it is the parent's choice," Coverdell said at the time. "And why shouldn't it be?"

Currently, the new federal program provides for individuals’ qualified contribution to approved scholarship granting organizations to be used to pay for tuition at these choices. Each state’s governor will decide whether their state will opt into the program, and each state will be responsible for ensuring that scholarships are only allowed to be used for qualified elementary or secondary education expenses.

As the microschool movement has become more popular across all fifty states, families will want to utilize available funds under this new scholarship program to help pay for the cost of attending these small learning environments, which are generally not defined in statute.

Likewise, microschool educators understandably want to make sure that the families they serve will have the opportunity to receive and use scholarships to pay for tuition.

Which leaves the reality that the many different ways microschools are organized is not clearly delineated in law. Nor do most who work within this highly innovative, and actively evolving, sector of schooling desire this innovation become constrained by the rigidities of codifying definitions in federal law.

All of this presents a tension between the old, traditional ways governments have regarded schooling and these newer, innovative paths to educating children which have gained considerable popularity in recent years, and are at the heart of today’s microschooling movement.

As a result, it will be highly important that those involved in supporting innovative microschooling get involved in this process by submitting public comment explaining what they feel it is valuable for the new federal tax credit scholarships to permit families to spend them on.

The details about the program for which public comment is being sought can be found online here. “Commentors are encouraged to use the Federal e-Rulemaking portal to submit comments (indicate “IRS-2025-0466”) by Dec. 26, 2025. Paper submissions should be sent to: Internal Revenue Service, CC:PA:01:PR (Notice 2025-70), Room 5503, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.”