A Georgia bill that would have allowed state funds to be spent for students to attend private schools failed to pass the Senate.
It fell by a vote of 25 to 28 on Tuesday.
The bill would have created educational savings accounts to be used on a variety of educational expenses, including costs for home and private schooling.
The measure's main supporter said it would allow parents to develop a customized education plan. It would prioritize giving funds to a few groups, including low-income families and bullied students.
Senate Democrats criticized the plan, saying it diverts funds from public schools and uses state funds on private schools, which are not held to the same accountability standards.
A similar proposal in the House has yet to move out of committee.