Treasury Issued Proposed Federal Scholarship Rules

The IRS and Treasury Department released guidelines for a federal scholarship program established by 2025 legislation.

Updated on Oct. 1, 2026 in Financial Aid

Isometric editorial illustration of a graduation cap resting on a stack of solid blocks, representing education policy structure. — The U.S. Treasury Department and IRS released proposed guidelines on Thursday to standardize federal scholarship program administration across states. AI Illustration. Upload story photo >

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The U.S. Treasury Department and IRS unveiled proposed rules on Thursday for a federal scholarship program created by a 2025 law. These regulations aim to clarify how scholarships for private school tuition and public school student services are administered.

Why it matters

Federal officials contend that expanding educational choice programs provides necessary support for students from economically disadvantaged backgrounds. The proposed rules seek to ensure consistency by preventing states from adding restrictive requirements to the program.

The federal law enacted in July 2025 allows scholarships to cover private school tuition and support services for public school students, including tutoring and disability-related needs. The new rules prohibit states from narrowing these qualifying expenses.

The players

Treasury Department

This federal agency is responsible for managing government revenue and implementing tax-related regulations.

Internal Revenue Service

This federal bureau is tasked with the collection of taxes and the enforcement of the tax code.

J.B. Pritzker

He serves as the Governor of Illinois.

The details

The proposed rules ensure that state governments cannot impose additional restrictions on scholarship organizations or limit eligible educational expenses beyond federal standards. While the federal government moves forward, the teachers union in Illinois has called on Governor J.B. Pritzker to reject the voucher program.

The federal law governing the scholarship program was enacted in July 2025.
Proposed implementation rules were released by the Treasury and IRS on October 1, 2026.

Culture Shift

The implementation of this program follows a pattern established by the 2025 federal tax and spending law, which prioritizes federal oversight of educational choice. This shift marks a departure from state-led voucher administration toward centralized federal standards for student funding.

The federal rules dictate whether families can utilize these scholarships for tutoring and specialized services without state-imposed limitations. Depending on the final regulations, this could influence the availability of financial support for students with disabilities in local school districts.

The takeaway

The upcoming public comment period offers stakeholders a chance to influence the final guidelines for these federal scholarships. Parents and educators should monitor these developments to understand potential changes to school funding and support service accessibility.