Public school districts in at least 30 states next year could start charging fees for expanded services their students can use federal tax-credit scholarship funds to cover.
But in setting up those systems, districts will likely have to confront difficult logistical, legal, and philosophical questions—all of which could stymie their ability to participate in the new federal school choice program as extensively as private schools will.
Beginning Jan. 1, the Internal Revenue Service will begin offering dollar-for-dollar tax credits for individuals who donate to organizations certified by their state to offer scholarship funds to K-12 students. Those scholarships, for private and public school students alike, can go toward tuition as well as a wide range of fees for other educational programming and equipment—including tutoring, technology, and transportation.
Private schools that charge tuition have a straightforward path to accepting scholarship dollars from their students. Public schools, meanwhile, are bound by a tangled web of legal and constitutional constraints that make them less accustomed to the fee-for-service model the new federal program encourages.
As a result, public schools may be slower and more reluctant, at least initially, to allow their students to benefit from the scholarship funds. That’s especially true in light of the newly proposed regulations governing the program, which arrived last week bearing a major gap: Detailed guidance on what counts as an “eligible expense” for the scholarship funds isn’t ready yet, though the IRS says it’s “coming soon” and is a “high priority.”
“The timing of this stuff is just really hard,” said Marguerite Roza, director of the Edunomics Lab, a school finance research center based at Georgetown University. “Public school districts need a little more certainty than that.”
Roza has been among the most vocal advocates for public schools to partner with scholarship-granting organizations (nonprofits that award student scholarships) and lay the groundwork for accepting scholarship funds. Some, like in Denver and Clark County, Nev., have already started.
Since reading through the regulations, though, Roza is more pessimistic that large swaths of public school students will be able to easily participate.
In particular, she’s concerned that the forthcoming “eligible expenses” guidance will solidify an unfortunate disparity, in which burdensome requirements discourage public schools from accepting scholarship funds to cover certain expenses that, in private schools, fall under the umbrella of tuition.
“I would push a district to push back and say, if that school down the road can accept a scholarship for tuition, and their kids can go to the dance and do robotics club and have an awards ceremony and a parking spot, then we can charge for those things, too,” Roza said. “Who is the Treasury to say those things aren’t [allowable] when they’re already covered under tuition at the other building?”
Public schools aren’t brand new to charging fees
Many public school districts already charge fees for supplemental services they’re not required by law to provide to all students—suggesting they’d be well-positioned to begin accepting scholarship funds from their students to pay for those services, if they’re located in one of the states whose governor has opted into the federal program.
The Albuquerque school district in New Mexico, for instance, charges students $250 per half-credit of summer school.
Several states allow schools to levy transportation fees for students who live close to their school buildings.
And in the post-pandemic era, a larger crop of schools have adopted technology fees that aim to discourage students from mishandling school-issued laptops, tablets, and other expensive devices they carry to and from school, sometimes across multiple school years.
Some public school students even pay tuition. More than half of states allow school districts to charge thousands of dollars for students who enroll in districts other than the one they’re assigned to attend.
A handful of states have laws and policies governing which fees are and aren’t acceptable for public schools to charge.
Utah’s state board of education, for instance, requires districts to annually seek public comment and secure board approval of its fee schedule. The district also has to include a maximum amount students can be charged across all fees.
“While [local school districts] are given wide latitude in setting fee maximums, these maximums should be set to protect students and families from unreasonable expenditures in order to participate in classes, activities, or programs,” says a Utah state board of education guidance document.
But those policies can be cumbersome for school districts to parse.
Indiana lawmakers in 2023 banned school districts from collecting textbook fees from K-12 students, and invested $160 million to help schools cover the costs. The law says schools can’t charge for “curriculum materials”—leading many district leaders to wonder which fees were allowed and which weren’t.
“The instructions back to schools were, ‘Check with your local counsel,’” said Scott Bowling, executive director of the Indiana Association of School Business Officials, “meaning schools needed to contact their local school attorney and get a written opinion after looking at Indiana law for what is considered curricular and what is considered a fee that schools can actually charge.”
Many districts also lack sturdy systems for keeping track of the fees they’re collecting and documenting where the money is going.
To take advantage of the scholarship dollars, “districts will need to set defined fees to accept these dollars, and they’ll need to document precisely which dollars covered which services for which students,” Roza, from the Edunomics Lab, wrote in a July report commissioned by a K-12 accounting software company. “One misstep may be enough to convince donors to go elsewhere.”
Fees open the door for punishments and penalties
Fees charged by public schools can be controversial—especially when a student’s failure to pay leads to discipline, or even criminal penalties.
The Houston school district last year experimented briefly with fees for parents who showed up late to school pickup, but backed off after widespread backlash.
A Hawaii state legislator in 2025 proposed establishing a $1 million fund schools could tap to cover the costs of unpaid student debt and prevent students from missing graduation as a consequence. But the measure failed, and the onus remains on school principals to settle debt disputes with parents on a case-by-case basis.
Districts’ fee schedules vary widely, and some even allow variation from one school to the next. There are no centralized resources that show all the fees each school charges.
Thalia González, a law professor at University of California, College of the Law, San Francisco, wanted to fill the gap. Earlier this decade, she enlisted a team of colleagues and graduate students to hunt for fees by scouring individual Missouri and Pennsylvania districts’ handbooks—including some they were only able to obtain via public records requests. They’ve since moved on to examining fee policies in the largest districts of each state.
In Pennsylvania alone, the team found and catalogued more than than 3,800 distinct fees and fines across more than 700 districts, as well as a wide range of penalties they impose when students don’t pay.
One school district shared with staff each month a list of students with outstanding debts; those students would then be barred from participating in extracurricular activities. Another handed graduating students with outstanding debts an invoice instead of a diploma at its graduation ceremony.
“What should not be an acceptable revenue source is extracting resources from those who are already the least well-served and then denying them a fundamental right in a context where they are legally required to be,” González said.
Schools’ written policies extending leniency to students from low-income families also vary widely, and often lack concrete exemptions, the team found.
“Some [waivers] had to be renewed, some had to show evidence of socioeconomic status. They were inconsistent,” González said. “It was really creating that administrative burden for families and young people.”
Charging public school students may be unconstitutional
Public school fees have also at times run afoul of state constitutions—27 of which include education clauses that refer to “free” public schools. The constitutions of Indiana, South Dakota, and Wisconsin further specify that public schools must be “free and without charge for tuition.”
The challenge for advocates of erasing public school fees, González says, is making that case without inadvertently pushing underresourced schools into an even more precarious financial position.
Idaho’s supreme court ruled in 2016 that charging fees for required academic courses in public schools is unconstitutional, even if the school principal waives the fee when students ask. Schools responded by scaling back many of their fees—and experiencing financial distress as a result.
“They’re trying to close a loop in all these different ways around what it means to pay for things that should be available for all their students,” González said.
Many school districts have faced pressure in recent years to pass fewer costs to their students—but those changes have compounded the financial pressures districts are already feeling as state and federal investments lag high inflation.
As a result, an increasing number of districts have turned to local nonprofits to help them find the funds to maintain at-risk programming—including for arts and music programs, dual-enrollment and credit-recovery opportunities, and before- and after-school tutoring, said Mike Taylor, executive director of the National Association of School Foundations.
In some states including Nebraska, Taylor said, local foundations already partner with school districts to offer tutoring schools can’t afford to offer without charging students. He’s hopeful the federally bankrolled scholarship funds may bolster his association’s members’ capacity to fill gaps when students are struggling.
But those efforts can run into legal trouble as well. In 2022, a high-profile lawsuit alleged that California school districts were violating the state constitution by allowing external foundations to charge fees to public school students for summer school.
Schools may also struggle in situations in which only some students have access to scholarship funds. The district could require students without scholarships to pay for the service in question, or the district could find another source of revenue in order to waive fees for the students without scholarship funds.
It’s not always possible for districts to come up with more money, especially given the monthslong budget process districts undertake long before the school year begins.
But requiring students without scholarships to pay is also likely out of the question, Bowling, from the Indiana Association of School Business Officials, said: “You’re not going to get anybody to come to your tutoring program if you’re asking them to pay.”
