Direct subsidy to parochial schools was ruled unconstitutional by the 7th U.S. Circuit Court of Appeals on April 27, 2001. The Court of Appeals upheld a lower court ruling in favor of the Freedom From Religion Foundation's challenge of a Wisconsin program giving cash grants to religious schools to reimburse them for Internet linkage access costs. The grants constituted a "direct subsidy to participating religious schools" that runs afoul of the Establishment clause principles set out by the U.S. Supreme Court in Committee for Public Education v. Nyquist (1973), wrote Judge Harlington Wood, Jr., joined by Judges Michael S. Kanne and Diane P. Wood.
The case is Freedom From Religion Foundation Inc. v. Bugher No. 99-2850.