Alabama Expands School Choice with CHOOSE Act, Federal Boost

MONTGOMERY — The Alabama House of Representatives passed legislation in early 2024 establishing the Creating Hope and Opportunity for Our Students’ Education (CHOOSE) Act, which Governor Kay Ivey signed into law on March 7, 2024, as Act 2024-21. The measure creates refundable income tax credits deposited into education savings accounts (ESAs) for qualifying K-12 expenses, including private school tuition, textbooks, tutoring and after-school programs at public, private or religious schools. Starting with the 2025-26 school year, credits reach up to $7,000 annually for students in participating schools or $2,000 for others, capped at $4,000 per family, funded by at least $100 million annually from the state CHOOSE Act Fund beginning fiscal year 2026.

Eligibility begins with families at or below 300% of the federal poverty level for tax years 2025 and 2026, expanding universally from 2027 regardless of income or prior public school enrollment. This builds on the 2013 Alabama Accountability Act (AAA), which offered limited tax credits for students in failing public schools — often in Black and Hispanic communities like parts of Birmingham and Montgomery — upheld by the Alabama Supreme Court in 2015. On January 2026, Ivey signed Executive Order No. 742, opting Alabama into the federal Education Freedom Tax Credit program from President Trump’s One Big Beautiful Bill Act, allowing additional scholarships via contributions to granting organizations administered by the Alabama Department of Revenue.

Supporters hail the expansion as empowering parents in a state where Alabama ranks among 11 with universal school choice, providing alternatives to underperforming districts. Critics, including Alabama Arise, warn the refundable credits — which can exceed taxes paid — divert sales and income tax revenue from the Education Trust Fund, hurting public schools that serve most of the state’s 750,000-plus students. As applications loom for next year, the policy tests Alabama’s commitment to educational pluralism amid tight budgets.