One of the oldest and more popular forms of school choice in the United States is educational tax credit. Like many other types of school choice, educational tax credits enable parents to send their children to the K-12 school of their choice, public or private, religious or non-religious. One type of educational tax credit, tax-credit scholarships, gives individuals and corporations an incentive—reduced income taxes—to donate to non-profit organizations that provide scholarships to families. These scholarships bring a wider array of educational options within the financial reach of low-and moderate-income families.
In Indiana, legislation that would have created such a program, allowing for individuals and corporations to donate up to $30 million per year, died in committee in 2002. The initiative would have expanded educational options for children from low-income families by allowing them to use the funds (up to $3,300 per student) to choose between public and private schools. Three more bills that would have created similar, smaller programs failed to become law in 2003..