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School Vouchers

Citizens Count Editor

The phrase “school voucher” is casually used to describe many different programs that provide public funding for students outside the public school system.

New Hampshire has two voucher-like programs in place, the education tax credit program and the recently-enacted Education Freedom Account program. The first program gives businesses a tax credit for donations to a scholarship program for private, parochial, and home school students. 

The New Hampshire Legislature passed the Education Freedom Account program as part of the 2022-2023 state budget. That program allows students to spend the equivalent of the per-pupil share of state school funding on private, parochial, and home school expenses.  

Education tax credit program

In 2012 New Hampshire enacted the education tax credit program, which gives businesses a tax credit for 85% of a donation to an approved scholarship program. The scholarships are administered by private nonprofits approved by the Department of Revenue Administration. The scholarships may be used for private school, home school, tutoring, or other education expenses. 

If a student leaves public school with the help of a scholarship, the public school no longer receives state money for that student. If a public school loses more than 0.25% of its total state funding due to the scholarship program, the state provides that school with supplemental funding.

Visit the Department of Revenue website for the education tax credit program 

Education tax credit program restrictions

There are many restrictions on education tax credit scholarships.  Here are some of the most significant restrictions:

  • The average value of a scholarship cannot exceed about $2,800 (the exact value is determined each year by the Department of Revenue Administration, according to changes in the Consumer Price Index). 
  • If a student is already attending private school, his or her family must be under 300% of the federal poverty level to be eligible for a scholarship.
  • At least 40% of the scholarships must be awarded to students who qualified for free or reduced lunch at their last public school. 
  • The total value of business tax credits from scholarship donations can grow by no more than 25% each year.
  • Only 10% of tax credit donations may be used for the nonprofit’s administrative expenses.

Education Freedom Account program

In 2021, Gov. Sununu signed the 2022-2023 budget into law which included an education savings account program called NH Education Freedom Accounts. Through this program, parents may apply for grants to spend on their children’s education—this includes tuition at a school of their choice (even private schools), tutoring, education-related expenses like school supplies and internet connection, and more. The grants equal the per-pupil share of state public school funding, around $4,600 per student in the 2021-22 school year. The student’s public school would in turn gradually lose that pupil’s share of state public funding. In the first year the public school would receive funding equal to 50% of the per-pupil share for that student; in the second year funding would drop to 25%. These “phase-out grants” for public schools will end in 2026. 

Visit the Children's Scholarship Fund website for the Education Freedom Account program

Education Freedom Account restrictions

The eligibility requirements are nearly identical to those of the education tax credit scholarships. Families at 350% of the poverty line or below are eligible for the grants. This limit was originally 300%, but was raised by HB 367.

Citizens Count Editor

“NH should offer publicly-funded scholarships for private and/or home schooling expenses.”

  • Parents and students should be empowered to choose the education that is best for them.  The education tax credit program, education savings accounts, and other voucher programs make choice available to all families by providing financial assistance to students that otherwise could not afford private or other schools. This choice improves educational outcomes for individual students and encourages schools to compete to provide the highest quality education. 
  • New Hampshire’s education tax credit program is tailored to help those who are most likely to struggle in public schools: low income and special education students. New Hampshire similarly limits its education savings account program, which should help even the playing field for low income and special education students.
  • The education tax credit program is only funded by businesses who voluntarily donate to scholarships, so the program does not burden all taxpayers with funding private and parochial schools they otherwise might not support. 
  • The New Hampshire Supreme Court rejected a challenge to the education tax credit program in 2014, ruling that individual taxpayers could not prove they were harmed by the program. 
  • The education tax credit program has not had a large negative impact on public schools, in part because the state has pledged to provide public schools with supplemental funding if a large number of scholarship students leave a district. New Hampshire could pledge to similarly provide supplemental funding as part of the education savings account program. In fact, fewer students in public schools means lower student-to-teacher ratios and potentially fewer costs.
  • New Hampshire is right to have a nonprofit manage the education tax credit program, because private organizations often run more efficiently than government.
Citizens Count Editor

“NH should not offer publicly-funded scholarships for private and/or home schooling expenses.”

  • The education tax credit program funnels business tax revenue out of public schools and into private scholarship accounts. Therefore, the program is essentially spending tax dollars on private schools, including religious schools. An education savings account program similarly sends state taxpayer dollars to religious schools. This violates the rights of taxpayers that do not want to support religious schools.
  • Whenever a student leaves public school, his or her school loses the per-pupil funding from the state. By enabling students to leave public school, the education tax credit program and education savings accounts weaken state support for public schools. This increases the burden on local taxpayers to fund education.
  • There is very little oversight of the performance of private and home school students in New Hampshire. This makes it difficult for the state to ensure that students utilizing education tax credit scholarships are receiving an adequate education, as required by the state constitution. The state may have a similar challenge monitoring the performance of students with Education Freedom Accounts.


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