Every Family Already Has a School Choice Tool. Most Aren’t Using It.

For most of its history, school choice meant exactly that: a choice of schools. One building or another. Usually, the assigned public school or the nearest private one. The argument was about where a child sat from 8 a.m. to 3 p.m.

That argument is over. A larger one has taken its place.

The question now is not where a child learns, but how. The answer, increasingly, is in more than one place. A hybrid homeschooler at a private school two days a week and at the kitchen table for the other three. A private school student who walks into the local public school for one class his own school lacks. A public school student who takes an online course in a subject no one down the hall teaches. A charter school built around dual enrollment, its students earning college credit before they graduate.

Education is built around the child, not the building.

This is no longer a fringe experiment. Today, 75 private choice programs now operate across the country, serving roughly 1.5 million students. In 2025 alone, eight states created new programs or expanded existing ones, with Texas leading the way. Charter schools have become the only growing segment of public education, climbing toward 4 million students even as traditional district enrollment falls. For a rising share of American families, the means to assemble a customized education, rather than simply accept the one assigned, are now within reach.

At the center of all this is a tool that many families still overlook: the 529 savings account.

For three decades, the 529 meant one thing and one thing only: college. For most families, it still does. But the 2017 tax reform, and, last summer, the far more sweeping Working Families Tax Cut Act, transformed it. A 529 can now cover up to $20,000 a year in K-12 costs — tutoring, curriculum, standardized test fees, and therapies for children with disabilities — plus workforce credential programs. For families assembling a modular education program, it has become one of the most flexible instruments available. It is tax advantaged. It is parent controlled.

And, crucially, it has another advantage the others lack. Private choice programs exist only where a state has built one. The new federal Education Freedom Tax Credit, enacted in the same bill and arriving in 2027, will fund scholarships only in states whose states choose to opt in. Both are powerful, but both are bound by geography and politics.

The 529 is not. It exists in every state, for every family, at every income level. No lottery. No waiting for a legislature to act. A parent in the most choice-hostile state can open an account tomorrow and begin directing money toward a child's education. It is the most broadly available education-freedom tool in America.

So why do so few families use it that way? Part of the answer is unfamiliarity. Another is a problem the states created, which is laid out in a new 50-state assessment of how these accounts are actually treated.

The trouble is, Washington widened the definition of a qualified expense, but several states have not followed. A parent withdraws 529 funds to pay for a tutor, exactly as federal law permits, and the state treats it as taxable income, in some cases clawing back a deduction the family already claimed. Federal law says yes. The state says pay up.

In these cases, parents are penalized, simply for using a freedom Congress deliberately gave them.

The remedy is neither complicated nor costly. States should conform their tax codes to the federal definition, fully and automatically. Conformity surrenders nothing that matters. States still run their own plans and set their own contribution incentives. It simply ends the practice of punishing families for following the federal law.

Conformity is the floor, not the ceiling. States can raise the deduction or credit for 529 contributions and extend it to families who invest through another state's plan rather than only their own. The aim is to build a savings habit in households that have never had one, and incentives are how habits are built.

One last reform ties everything together. States with education savings account (ESA) programs should let families roll out unspent ESA funds into a 529. Today, that money reverts to the state when a child finishes a grade or graduates, a claw back that punishes the families who manage their accounts most carefully. Permit the rollover, and a year-to-year benefit becomes a lifetime of savings, money that can later pay for a credential, a trade program, or college.

This is the shape of what comes next. Not isolated programs but a working system of ESAs, scholarships, tax credits, and 529s—each reinforcing the others, all of it directed by parents and none of it surrendered back to the bureaucracy.

Erika Donalds is the Chair of Education Opportunity at America First Policy Institute.