KEY TAKEAWAYS: Proposed federal rules would prevent Louisiana from narrowing eligible school types or qualifying education expenses. Scholarship organizations could specialize in services such as tutoring for students who remain enrolled in public schools. Donors could receive a federal tax cr edit of up to $1,700 annually for contributions to approved scholarship organizations. The regulations are not final, with a 60-day public comment period and a Dec. 15 hearing scheduled.   Proposed federal scholarship rules would restrict Louisiana from narrowing eligible school types or educational expenses, while allowing organizations to fund tutoring for students who remain in public schools. The Treasury Department and Internal Revenue Service proposal, published Thursday, would let scholarship organizations specialize in services such as public school tutoring rather than private school tuition. Louisiana could not exclude an otherwise qualifying organization because of that choice. The restrictions would apply to organizations participating in the Federal Scholarship Tax Credit program, which begins Jan. 1. States could choose whether to participate, but those opting in would have to follow the federal standards. Students would qualify based on household income of no more than three times their area’s median income, adjusted for household size. Using the U.S. Department of Housing and Urban Development’s fiscal 2026 median family income of $79,200 for the Shreveport-Bossier City area, the proposed formula produces a $237,600 ceiling for a four-person household. Eligibility at application would depend on the applicable income data and household circumstances. Gov. Jeff Landry committed Louisiana to the program in December. Individuals who donate to approved scholarship-granting organizations could receive a dollar-for-dollar federal income tax credit of up to $1,700 annually. The organizations would distribute scholarships to eligible K-12 students. The $1,700 limit applies to the donor’s annual tax credit, not the amount each student would receive. Scholarship availability and amounts would depend on donations and participating organizations. The credit is nonrefundable, meaning it cannot reduce a donor’s federal income tax liability below zero. Unused credit could be carried forward for up to five years. The law contains no nationwide dollar cap or scheduled expiration. The Joint Committee on Taxation estimated the provision would reduce federal revenue by approximately $25.9 billion over 10 years, according to the Bipartisan Policy Center’s summary of the congressional estimate. Separately, Treasury and the IRS project participating organizations could receive $26 billion in qualifying donations annually by 2030. That projection describes anticipated donations, not a guaranteed funding allocation or the congressional revenue estimate. Louisiana already operates LA GATOR and a Tuition Donation Credit Program that supported approximately 3,790 students in 2024-25. The latter uses federal poverty guidelines to determine income eligibility, a different measure from the federal program’s local median-income calculation. The proposal addresses overlapping assistance by requiring scholarship organizations to prevent combined awards for the same expense for the same student from exceeding its cost. How Louisiana would coordinate the federal scholarships with its existing programs remains unresolved. The Center Square reached out to the Louisiana Department of Education and the U.S. Department of the Treasury for comment but did not receive a response from either agency before publication. Although the proposal would limit additional state restrictions, Louisiana would retain oversight duties. States would have to review organizations’ qualifications and require documentation and financial reporting to detect fraud and misuse. The proposal also includes annual audits for scholarship organizations. The regulations are not final. The notice provides a 60-day public comment period and schedules a hearing for Dec. 15. ...read more read less