Federal school choice program reopens possibilities for Nebraska students

Nebraska Gov. Jim Pillen an and U.S. Reps. Adrian Smith and Mike Flood announced the return of school choice to Nebraska this week as the state opted into a historic new tax credit program.

In front of a gym full of students at St. Teresa Catholic School in Lincoln, Pillen announced that Nebraska would enter the newly created program that was signed into law as part of the One Big Beautiful Bill signed into law on July 4.

“I am not opting this in,” the governor told the crowd. “I am cannonballing it in.”

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Under the federal program, Nebraskans can receive dollar-for-dollar tax credit for donations made to scholarship-granting organizations up to $1,700. 

While Nebraska remains one of only two states without a formal school choice program, the new federal tax credit brings back school choice support to Nebraska following the Opportunities Scholarships Act program that was enacted in 2023. Opponents of school choice immediately challenged the opportunity scholarships law, leading the legislature to repeal and replace that law with a state appropriation to direct funds to private school scholarships for students with special needs or from low-income families or have other qualifying needs. That law too faced immediate opposition, but $10 million in scholarship funds from that program were allocated prior to the law’s repeal.

Opportunity Scholarships of Nebraska, which partners with Catholic schools across the state, awarded more than $8.5 million through a total of 4,047 scholarships in 2024 and 2025, according to the scholarship-granting organization.

“Opting into this federal program will be transformative for my family and for countless families across our community and our state,” Sarah Schinstock of Lincoln told the crowd at the press conference.

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She and her husband, Jeff, have seven children. Six of their children are able to attend a Catholic school because of scholarship assistance, she said.

“We couldn’t make this educational choice happen without scholarship assistance, which we are very thankful for,” she said.

Unfortunately there are many more families unable to make this choice because the demand for scholarship assistance exceeds the available scholarship dollars, she said.

Smith, of Gering, sponsored the tax credit bill that became part of the One Big Beautiful Bill, a federal tax and spending measure.

“The beauty of the school choice provision,” Smith said, “is that a scholarship granting organization formed at the local level will hopefully get the resources to wrap their arms, basically around students’ needs, families’ needs.”

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The benefits would not only be experienced by students attending a private school, but scholarships could be used to support students in a public school setting through extra tutoring assistance, the congressman said.

Flood, of Norfolk, who helped pass the One Big Beautiful Bill, said the new program helps support students no matter the school their families choose.

“Some parents decide to sacrifice for their children,” Flood said. “But not every family in Nebraska has that extra money.”

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Under the new program, participating students must be eligible to attend a public school, and families must earn no more than 300 percent of their area median income, according to a news release. The program is overseen by the U.S. Treasury Department.

Pillen estimated the new program could generate $17 million in scholarship support if just 1% of Nebraska taxpayers opt for the tax credit when the program goes online in 2027.

The governor called it a win-win for education in Nebraska as it helps empower parents to make the choice that is best for their students’ needs.

“We are never, ever going to give up on anybody,” Gov. Pillen said.

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