An Overview of School Choice: Charters, Magnets, Educational Savings Accounts, and More

Governors and other elected officials began to have deep discussions about how to improve their schools in the 1980s after the publication of “A Nation At Risk,” a report commissioned by President Ronald Reagan that investigated the decline of American education.

During this time, the early roots of choice began to take hold. Parents, community leaders, and policymakers worked together to expand choice, particularly in neighborhoods with chronically underperforming schools. This led to the creation of charter schools as well as magnet schools, which are selective public schools offering specialized curricula to which students must apply.

During the 1990s, Congress created the Federal Charter School Program, boosting support for charter schools, first in early-adopter states like Minnesota and California and then eventually across the nation.

In 2002, when President George W. Bush signed the No Child Left Behind Act into law, federal and state policies began emphasizing proficiency for every student and provided choice for students in underperforming schools. The momentum grew during the Obama Administration, which drove state choice policies through its federal Race to the Top program, offering funds for raising the state caps on charter schools as well as the replication and expansion of high-quality charter schools.

While the charter school movement saw immense growth in this timeframe, it also started to hit headwinds. Special interest groups began a more comprehensive strategic fight to stop charter schools from growing. And as the movement matured, it became clear that there were both good and bad actors in the charter school landscape and that some of these schools produced similar outcomes as the very public schools they were seeking to replace.

The second phase of the movement expanded choice options to include private schools through ESA programs, which have grown exponentially over the past six years. Private schools have always been an option for families who could afford them, but private school choice, including ESAs, allow families – particularly those with lower and middle incomes – to access public funds to use on private education if admitted.

Private school choice began in Wisconsin with the launch of the Milwaukee School Choice Program in 1989. This small pilot program made scholarships available to low-income students to attend a private school of their choice. Since then, other programs have emerged providing tax credits to individuals and corporations that offered scholarships to private schools, usually for low-income students and students with special needs.

During the pandemic, the private school choice movement gained momentum as parents of all income levels across the country looked for alternative schooling options. This gave way to state policies that created and funded ESAs programs. Today, more than 500,000 students across 17 states, equivalent to roughly 1% of the country’s K-12 students,. are enrolled in ESAs to pay for private and supplemental education.

Nearly half of the students participating in private school choice programs are enrolled in ESAs. Five additional states are expected to add ESA programs by the end of 2026. In January 2025, President Donald Trump issued an executive order instructing the secretary of education to release guidance about how states can use “federal formula funds to support K-12 educational choice initiatives.”

School choice encompasses a range of options that tend to fall into one of two categories:

Parents, educators, and lawmakers identify both advantages and disadvantages of school choice.

In a survey by National School Choice Week, about three-quarters of U.S. parents considered, searched for, or enrolled at least one child in a new or different school in 2025, the highest level recorded over five years. This signals an increasing number of families want more educational options and are demonstrating a greater willingness to seek alternatives to their assigned schools.

The strongest research on school choice finds positive academic effects for low-income students, particularly in urban charter schools. Charters that use intensive models – such as extended learning time, high-dosage tutoring, and strong instructional coherence – have been shown to raise achievement and narrow opportunity gaps in many cities.

In January 2026, the National Center for Research on Education and Access (REACH) published a report comparing special education students in Michigan charter schools with peers who remained in traditional public schools. Students attending charter schools experienced greater academic gains and fewer absences than those in traditional public schools. Suburban and rural charter schools, along with some private school choice programs, show more mixed results, with several studies finding limited or no impact on test scores.

School choice programs are frequently associated with stronger long-term outcomes even where short-term academic gains are modest. That includes higher graduation rates, increased college enrollment, and reduced involvement with the criminal justice system, as seen in Washington, D.C., and Milwaukee.

Many states are adopting private school choice policies. ExcelinEd, a nonpartisan organization that supports state leaders in transforming K-12 education through student-centered policy solutions, tracks all 50 states and their private school choice policies with an interactive map. Tennessee and Texas recently passed private school choice legislation. These two states can serve as a bellwether for implementation of effective school choice policy in 2026.

Texas Governor Greg Abbott signed Senate Bill 2 into law in May 2025, making the state the 19th in the nation to establish an Education Savings Accounts (ESA) program – essentially a form of school voucher. It will provide public funding for Texas families to use for private school tuition or to access out-of-boundary district and charter schools, including online programs. Funds can also be used on other educational expenses, like pre-K, books, transportation, tutoring, and more.

The Texas Education Freedom Accounts (TEFA) program is scheduled to begin in the 2026-2027 school year and will be funded with $1 billion over two years but could grow to nearly $4.5 billion per year by 2030. Participating families will receive up to 85% of what public schools get for each student – about $10,474 per student per year. Students with disabilities would be eligible for up to $30,000, depending on what the state would regularly spend on special education services for that student. Eligibility requires an Individualized Education Plan (IEP) on file with the Texas Education Agency by the end of the enrollment period. Homeschooling families could receive up to $2,000.

Almost any school-age child eligible to attend a public school can participate in the program, but it will be capped at 90,000 students the first two years. If participation requests top this level, the bill prioritizes students who are enrolled in public schools over those already in private schools. After that, priority will be given to students in this order:

1. Those with disabilities living in households with less $160,000 in annual income for a family of four.

2. Those from households with annual income levels below 200% of the poverty level, which is roughly $64,000 for a family of four.

3. Those from households with incomes between 200% and 500% of the poverty level.

4. Finally, those coming from households with annual income above 500%, about $160,000 for a family of four. Funding for these students cannot exceed 20% of the total amount of the fund.

The Texas Comptroller of Public Accounts will administer the program, oversee distribution of funds, conduct audits, and certify educational assistance organizations responsible for disbursing funds, approving providers, and reporting program outcomes. Religious and nonreligious schools can both participate, but they must have been operating for more than two years to qualify. Participating schools must test students in grades 3 to 12 each year with a nationally recognized, norm-referenced assessment and report the results to parents and to a certified educational assistance organization.

The state comptroller opened applications for approved private schools and for pre-K and kindergarten programs in December 2025, with application reviews conducted on a rolling basis. Schools must be accredited by the Texas Private School Accreditation Commission (TEPSAC) or another accrediting body recognized by the Texas Education Agency.

Pre-K and kindergarten providers must be located in Texas, licensed and in good standing with the Texas Department of Family and Protective Services, and accredited by a research-based and nationally recognized universally accessible accreditor approved by the commissioner of higher education or an organization that is recognized by the Texas Private School Accreditation Commission, be a Texas Rising Star Program provider with a three star certification or higher, be a Texas School Ready! participant, or have an existing partnership with a school district to provide a pre-K program because one isn’t already available within the district.

Families may also use TEFA funds for approved education-related expenses through the program marketplace, an online information hub with contact information for approved vendors, which includes vetted providers offering instructional materials, required uniforms, academic assessments, private tutoring, transportation to and from approved providers, and educational therapies not otherwise covered by federal, state, or local programs.

Applications for families for the 2026-2027 school year opened on Feb. 4, 2026. The application requires proof of Social Security number or taxpayer identification number for both parent and child, tax returns for 2024 and 2025, and proof of Texas residency. Optional documents, such as an IEP or evaluation records, may be submitted to qualify for prioritization or additional funding. Pre-K applicants must be between ages 3 and 5 and meet at least one eligibility criterion, such as limited English proficiency, eligibility for free or reduced-price lunch, homelessness, foster care status, or being the child of an active-duty service member, a Star of Texas Award recipient, or a public-school teacher at a school offering pre-K. If applications exceed available funding, participation will be determined by lottery.

Families will be informed if they will receive money – and how much – in April. At least a quarter of the funding will be disbursed by July 1, with the remainder in two parts – at least 50% by Oct. 1 and the remainder by April 1, 2027.

The comptroller established a website for applications and to communicate all eligibility requirements for schools, families, providers, and vendors.

Tennessee enacted legislation establishing an Education Savings Account (ESA) program in 2019 to expand access to private education for low-income students and students with disabilities who otherwise attended their neighborhood public schools. Implementation was delayed by legal challenges and did not move forward until 2022. The statute requires a comprehensive evaluation after the program’s first three years, followed by annual evaluations thereafter.

In 2025, the state expanded its ESA program to a universal school choice model with the passage of the Education Freedom Scholarship Act. The law broadened eligibility to all K-12 students eligible to attend a public school, regardless of income. Participating families receive a state-funded scholarship roughly equal to the per-pupil base funding amount ($7,296 for 2025–26), which must be used first for private school tuition and fees, with remaining funds available for other approved education expenses such as tutoring, curriculum, transportation, and technology. Participation is initially capped, with 10,000 scholarships prioritized for lower-income students and students with disabilities and an additional 10,000 available to all eligible Tennessee families. The program includes basic accountability requirements, including student assessments and reporting, allows unused funds to roll over year to year, and is designed to expand over time as participation grows.

In January 2026, consistent with the statutory evaluation requirement, the Tennessee comptroller of the Treasury Office of Research and Education Accountability (OREA) released the first comprehensive evaluation of the ESA program. The report examined family participation, student academic outcomes, and program operations and oversight during the program’s initial three years.

• Student participation: Participation increased each year, though enrollment remained well below the statutory cap of 5,000 students. Approximately 98,000 Tennessee students were eligible to participate based on income and residency criteria, yet only 7.2% applied during the 2024-2025 application cycle. Among participating students, most had previously attended public schools that were not designated as low-performing, indicating the program was more often used to transition students out of average- or higher-performing public schools into private schools.

• Academic outcomes: ESA participants are required to take the Tennessee Comprehensive Assessment Program (TCAP). While participating students showed score improvements over time during the first three years, they continued to perform below their public school peers and demonstrated less academic growth over the same period.

• Parent satisfaction: The evaluation included an annual survey of parents. The parent survey response rates declined each year, with only 15% of participating families responding in the 2024-25 cycle. Among respondents, reported satisfaction remained consistently high, exceeding 95% across all years of the program.

• Program administration: The evaluation identified opportunities to improve communication with families and participating schools, expand data collection, strengthen outreach to eligible low-income families, and clarify processes related to compliance monitoring and academic accountability.

State law requires annual evaluations going forward, with this initial report serving as the baseline against which future program performance and improvements will be measured.

President Donald Trump signed the One Big Beautiful Bill in July 2025, expanding school choice nationwide through the creation of a new federal tax-credit scholarship program. The law establishes a dollar-for-dollar, nonrefundable tax credit of up to $1,700 for donations made to qualifying scholarship-granting organizations (SGOs). To be eligible, an SGO must be a federally recognized nonprofit organization.

The statute requires SGOs to allocate at least 90% of their revenue to scholarships serving 10 or more eligible students, provided those students do not all attend the same school. Students are eligible to receive scholarships if their household income does not exceed 300% of the area median gross income. Scholarship funds may be used only for qualified educational expenses, including tuition, school supplies, room and board, uniforms, and special education services, so long as those expenses are connected to enrollment in a public, private, or religious school.

The U.S. Department of the Treasury is responsible for administering the program, which is scheduled to take effect on Jan. 1, 2027. States must opt in for their residents to participate, and governors were first given the opportunity to do so in late 2025. Treasury has opened a public comment period to help develop rules governing the program, with final rules expected to be issued in 2026.

Today, the school choice movement has unprecedented momentum as federal and state policymakers look to expand educational options for students across the country. In particular, new ESA programs in states like Tennessee and Texas could offer welcome solutions to families and be an important piece of the puzzle in improving outcomes for all students statewide.

However, these programs are still in the nascent stages, and parents and policymakers should pay close attention to some key questions as these programs are implemented:

1. Student outcomes: Are these programs improving student learning? How do we know? Does the state have adequate data to understand outcomes across the range of school choice options?

2. Parent empowerment: Do parents have access to the data and resources they need to make informed decisions about what school options are best for their child? Are outcome data and admissions information readily available, easily accessible, and understandable?

3. Participation rates: How many students are opting into choice programs, particularly ESAs? Is that number growing over time? Why or why not?

4. Impact on student subgroups: Which students benefit the most from ESAs: urban, suburban, or rural; family income level; student grade-level; special education; English language learners; other factors? Why?

5. Impact to public schools: What effect has private school choice had on traditional public schools? Where is enrollment declining? Where is performance improving?

6. Impacts to private school landscape: What has private school choice meant for private schools in the area? What percentage of private schools participate? Has the number of participating private schools grown?