When the government pays tuition to a private school on behalf of the parents, this is usually referred to as a voucher. Vouchers currently exist in Milwaukee, Cleveland, Florida, and, most recently, Utah, Colorado, and the District of Columbia. The largest and oldest Voucher program is in Milwaukee. Started in 1990, and expanded in 1995, it currently allows no more that 15% the district's public school enrollment to use vouchers. As of 2005 over 14,000 students use vouchers and they are nearing the 15% cap. It should be noted that school vouchers are legally controversial in some states; in 2005 the Florida Supreme Court found that school vouchers were illegal under the Florida Constitution.
In the U.S., the legal and moral precedents for vouchers may have been set by the G.I. bill, which includes a voucher program for university-level education of veterans. The G.I. bill permits veterans to take their educational benefits at religious schools, an extremely divisive issue when applied to primary and secondary schools.
In Zelman v. Simmons-Harris, 536 U.S. 639 (2002), the Supreme Court of the United States held that school vouchers could be used to pay for education in sectarian schools without violating the Establishment Clause of the First Amendment. As a result, states are basically free to enact voucher programs that provide funding for any school of the parent's choosing.
The Court has not decided, however, whether states can provide vouchers for secular schools only, excluding sectarian schools. Proponents of funding for parochial schools argue that such an exclusion would violate the free exercise clause. However, in Locke v. Davey, 540 U.S. 712 (2004), the Court held that states could exclude majors in "devotional theology" from an otherwise generally available college scholarship. The Court has not indicated, however, whether this holding extends to the public school context, and it may well be limited to the context of individuals training to enter the ministry.