Thousands of Alabama families apply for education savings accounts on opening day

MONTGOMERY, Ala. – Thousands of Alabama families applied for state-funded education savings accounts for the 2025-26 school year on Thursday, the first day applications opened. The ESAs, worth up to $7,000 per student, can be used for a variety of education expenses, including private school tuition.

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By late Thursday, more than 2,800 applications had been submitted for 4,800 children, according to the Alabama Department of Revenue. If all applicants qualify for the maximum amount, the ESAs could amount to approximately $33.6 million.

Applications will be accepted through April 7 through the Creating Hope and Opportunity for Our Children’s Education Act website. Families will be notified of award decisions in May. State officials said if the full $100 million lawmakers provided for the program is not awarded in the first round, they plan to reopen the application process.

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Gov. Kay Ivey, a strong proponent of the CHOOSE Act, celebrated the program’s launch in a statement  Thursday.

“The CHOOSE Act will help our Alabama students receive the highest-quality education possible by giving greater flexibility to families to pursue educational options that meet their individual needs,” Ivey said in a written statement. “It is a wonderful opportunity to make the future of Alabama stronger than ever.”

The program offers $7,000 for students enrolled in participating schools for eligible educational expenses, including tuition, and tutoring, therapies and other costs at participating schools and approved education service providers. Homeschool students can receive $2,000, capped at $4,000 per family.

To qualify, a family’s adjusted gross income cannot exceed 300% of the federal poverty level for the preceding tax year. In 2023, that was about $90,000 for a family of four. Funding will be distributed directly to schools and service providers, not families.

Applications will be prioritized in this order:

• The first 500 will be awarded to students with special needs;
• Children of active-duty service members zoned to attend a priority school, those that earned a ‘D’ or ‘F’ on the 2024 report card;
• Families based on their income – for example, a family whose income is 70% of the federal poverty level will be awarded ahead of a family whose income is 80% of the federal poverty level.

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All families will become eligible for ESAs starting in the 2027-28 school year.

ALDOR is investing in outreach to ensure families understand the program and know how to apply. The agency is allocating an additional $385,000 for marketing on top of the $1.4 million already budgeted for administration.

“This is a pool of money that we will use for advertising to make sure parents are getting into that portal for that first window,” ALDOR Executive Counsel Mary Martin Mitchell told lawmakers at the Legislative Contract Review Committee meeting on Thursday.

“We’re communicating very differently about this tax credit than any tax credit we have had before,” Mitchell said. “The phone lines have been busy, but they’ve been able to be handled.”

Alabama Daily News reporter Alexander Willis contributed to this story.