CHOOSE Act: Alabama’s $7,000 education savings account applications open Jan. 2

BIRMINGHAM, Ala. — Alabama families are two weeks away from being able to apply for new educational opportunities as the state prepares to launch its first education savings account program. Applications open Jan. 2 for the Creating Hope and Opportunity for Our Students’ Education Act, which aims to give families more choice over how and where their children are educated. 

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Under the CHOOSE Act, passed last spring, families who meet income eligibility guidelines can apply for a $7,000 ESA to enroll their child in a participating private or public school at the start of the 2025-26 school year. Homeschoolers are eligible for a $2,000 ESA, capped at a total of $4,000 per family.

Some private school officials believe the CHOOSE Act will help families who couldn’t previously afford private school education.

“I believe the CHOOSE Act has tremendous potential to serve many families across Alabama by providing them with options that may not have been accessible to them before,” Alabama Independent School Association Executive Director Michael McLendon wrote in a response to Alabama Daily News. “I think we’ll see enrollment in non-public schools grow across the state, and I expect the development of more innovative programs (microschools, special services programs, etc.) as a result.”

“However, I don’t anticipate drastic enrollment surges in non-public schools during the first year or two of the program,” McClendon said, citing the lack of promotion.

“While many schools are working hard to promote the program to prospective families in their communities, a broader marketing and promotional strategy has been lacking,” he wrote, pointing to an organization in Wisconsin that produces marketing materials for schools and other stakeholders to share with interested families.

The Alabama Department of Revenue, the agency in charge of administering the CHOOSE Act, has in recent weeks held multiple webinars for interested families and education service providers who want to participate in the program.

Alabama Daily News listened in to the Nov. 19 education service provider webinar and the Nov. 26 family webinar to inform this reporting.

The basics of Alabama’s CHOOSE Act

During the 2025-26 and 2026-27 school years, ESAs will only be issued to families whose Adjusted Gross Income – as determined by tax guidelines – is less than 300% of the federal poverty level. In 2023, that was about $90,000 for a family of four. Starting with the 2027-28 school year, income will no longer factor into eligibility.

The first 500 ESAs are reserved for students with disabilities, provided income eligibility requirements are met. Siblings of these students will also be awarded ESAs. 

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The next priority goes to students who are dependents of active-duty service members enrolled or assigned to a priority public school (the 156 schools that earned a ‘D’ or ‘F’ on the state’s recent report card). 

Savings account funds can cover tuition and eligible expenses, such as registration fees, supplies and technology. A detailed list of allowed expenses is available in ADOR’s Parent Guide, posted on the CHOOSE Act website.  

The law requires the legislature to allocate $100 million every year for ESAs as long as at least 90% of the previous year’s funding is awarded and used. Lawmakers set aside $50 million of funding last year and are expected to add another $50 million this year to make the first $100 million available.

Application process

Applications open Jan. 2 and close April 7. There is no need to rush to be one of the first applicants, ADOR officials explained. Applications received during that time period will be considered in order of priorities established by law. Families will be notified of their status beginning May 1. 

Families will apply for ESAs through FACTS, an organization that handles financial aid and grants for multiple education-related organizations. Families will be asked to provide their child’s birth certificate, proof of family income and verification of Alabama residency. 

Revenue officials noted that 2023 tax documents – state or federal – will be accepted for families who have not yet completed their 2024 taxes. Other documents showing total income will also be accepted, officials said.

To be eligible for one of the first 500 ESAs restricted to students with disabilities, families will need to provide a student’s Individualized Education Program, Section 504 determination or the Individualized Service Plan from the child’s public or private school. 

Revenue officials encouraged all families interested in ESAs to apply, whether or not they meet the income eligibility requirement, noting that lawmakers want to know how many families are interested. 

The Alabama Accountability Act tax credit scholarship program is a separate program that awards up to $10,000 scholarships to income-eligible students. Families can apply to get a scholarship under both the Alabama Accountability Act and the CHOOSE Act but can accept only one. Revenue noted students can accept other types of scholarships a school or other entity offers along with the ESA, just not the Alabama Accountability Act scholarship.

Families will be notified of their status – whether they were awarded an ESA – beginning May 1. ClassWallet, an organization with experience with administering ESA programs in other states, was chosen as the digital platform for paperwork and payments.

Families will have to confirm their child’s enrollment in a participating school or verify homeschooling status to accept ESA funding and will be given access to the ClassWallet platform by July 1. 

If the entire $100 million is not awarded and accepted, ADOR plans to reopen the application process. 

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Families will not handle any money from the ESA. Instead, families will submit invoices through the ClassWallet platform and payment will go directly from ADOR to participating schools and education service providers.   

Notably, families will be responsible for costs beyond the total ESA award. 

Unused funding at the end of the academic year – which runs July 1 to June 30 – will roll back into the CHOOSE Act fund.

Education service providers – including schools, private tutors, vendors selling education-related supplies and equipment, and therapy providers – can apply for approval at any time. The CHOOSE Act website states that applications from education service providers will be reviewed and responded to in 14 days.  

A list of education service providers beyond participating schools is not yet available but is noted as “coming soon” on the CHOOSE Act website.

ClassWallet also has a marketplace where families can purchase materials directly from pre-approved vendors. 

ADOR has already approved nearly 150 private schools to participate in the program. Many of these schools also participate in the Alabama Accountability Act’s tax credit scholarship program. 

Public schools can participate, too. If a public school is approved to participate in the CHOOSE Act program, it can charge out-of-district student tuition, and a student’s ESA can be used to pay that tuition according to ADOR officials – as long as the student isn’t counted, and therefore funded, as a full-time student at the public school.  

For example, homeschoolers who participate in a sport or other extracurricular activity at a public school are counted as full-time students and are not eligible for an ESA, ADOR officials told ADN.

There will be a renewal process, ADOR said, but the details are not worked out yet.

For complete information, check out the CHOOSE Act website. 

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