Creating Hope and Opportunity for Our Students’ Education Act of 2024: The CHOOSE Act
The CHOOSE Act, signed into law by Gov. Kay Ivey on March 7, 2024, makes refundable income tax credits called education savings accounts (ESAs), available to support the success of every K-12 student in Alabama. The law requires the Alabama Department of Revenue to establish a framework and funding for ESAs, which may be used by eligible families to cover tuition, fees, and other qualified education expenses at approved education service providers (ESPs) in Alabama.
ESAs in the amounts below will be available beginning with the 2025-2026 Academic Year:
- Up to $7,000 per participating student enrolled in a participating school
- Up to $2,000 per participating student not enrolled in a participating school (e.g. students that participate in individual or group homeschool programs or co-ops, non-participating schools, or other similar programs); capped at $4,000
Year 1: Academic Year 2025-2026, the credits will be awarded as follows:
- The first 500 ESAs awarded for participating students* with special-needs
- Participating students* who are dependents of active-duty service members enrolled in or assigned to a priority school
- Remaining awarded for participating students* whose family have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year
*Priority goes first to participating students and siblings of participating students.
Year 2: Academic Year 2026-2027, the credits will be awarded as follows:
- The first 500 ESAs awarded for participating students* with special-needs
- Participating students* previously awarded in the prior academic year
- Participating students* who are dependents of active-duty service members enrolled in or assigned to a priority school
- Remaining awarded for participating students* whose family have an adjusted gross income not exceeding 300 percent of the federal poverty level for the preceding tax year
*Priority goes first to participating students and siblings of participating students.
Year 3: Academic Year 2027-2028 and beyond, the credits will be awarded as follows:
- The first 500 ESAs awarded for participating students* with special-needs
- Participating students* previously awarded in the prior academic year
- Participating students* who are dependents of active-duty service members enrolled in or assigned to a priority school
- Remaining credit awarded for participating students* regardless of adjusted gross income
*Priority goes first to participating students and siblings of participating students.
CHOOSE Act FAQ
In March, Alabama Governor Kay Ivey signed the CHOOSE Act into law, establishing an education savings account initiative that allows families more flexibility in choosing their children’s schooling. This legislation, which marks Alabama as the 14th state to adopt such a program, provides financial assistance to families opting for private or public schools of their preference.
Below, we have compiled some of the frequently asked questions that we’ve had in our office and from speaking with our other non-public school partners around the state.
The CHOOSE Act, now law, will commence in the 2025-26 school year, granting parents the opportunity to enroll their children in a participating school of choice with the aid of a $7,000 educational spending account. There is also an option for parents of students enrolled in homeschool, or non-participating schools, with a lower funding amount. For the purposes of this FAQ, we will focus on traditional students and our member schools. Initial funding for these ESAs will be not less than $100 million.
Initially, eligibility for the first two years will be based on income criteria, with families of four earning approximately $95,000 or less, students with special needs and active-duty service members enrolled in or assigned to a priority schools. Preference will be given to the first 500 spots for students with special needs. After the initial phase of two years, the income threshold will be removed, but priority will be given to economically disadvantaged families.
We are currently awaiting critical details regarding implementation guidelines by the Department of Revenue. A draft version of those guidelines is expected to be published on September 30th, 2024. This will allow for a period of public comment in October 2024, followed by a final rule hearing on November 5th, 2024, when we anticipate the rules will be finalized. Furthermore, the Department of Revenue expects the program’s website to go live in early October. They will also begin onboarding Education Service Providers (schools) around the same time.
When the draft and final guidelines are released, AISA will immediately alert our member schools and provide the latest information across our digital platforms.
The Department of Revenue (DOR) has officially selected ClassWallet as the platform vendor for the program. ClassWallet is a well-established vendor used by ESA programs in other states. Additionally, they have partnered with FACTS for the application process, which many of our member schools are already familiar with. Here is a helpful link from Arizona’s ESA, which should give an overview of what the program might look like in Alabama.
The Department of Revenue (DOR) has also chosen Markstein, a marketing firm out of Birmingham, to manage the program’s promotional materials. You can also sign up for email updates through the Department of Revenue’s website.
This indicates their commitment to effectively promoting the program and providing timely, accurate information to families and schools. Additionally, AISA will provide the latest updates on the CHOOSE Act on this page, as well as across our digital platforms.
Nearly 100% of our member schools meet the criteria for participating schools as they administer nationally normed tests and are accredited by Cognia and/or AISA. I think schools will need to wait until all facts are known, regarding the established guidelines, before making the decision to participate. However, based on the information currently available, I imagine there will be a high participation rate.
This legislation doesn’t alter admissions policies, school mission or educational freedoms; it merely empowers parents to choose the best-fit educational setting for their children. Participating schools will not be recipients of state or federal funds through participation in this program. I am confident that the CHOOSE Act will allow our member schools to reach more families in the communities we serve and have generational impact.
The funding for these opportunities is held separately and doesn’t affect public school funding calculations. The CHOOSE Act aims to empower parents by providing educational options beyond their residential district. The hope is that increased choice will foster healthy competition, benefiting both students and schools alike.
