81 And let no one say that in a nation where there are different religious beliefs, it is impossible to provide for public instruction otherwise than by neutral or mixed schools. In such a case it becomes the duty of the State, indeed it is the easier and more reasonable method of procedure, to leave free scope to the initiative of the Church and the family, while giving them such assistance as justice demands. That this can be done to the full satisfaction of families, and to the advantage of education and of public peace and tranquillity, is clear from the actual experience of some countries comprising different religious denominations. There the school legislation respects the rights of the family, and Catholics are free to follow their own system of teaching in schools that are entirely Catholic. Nor is distributive justice lost sight of, as is evidenced by the financial aid granted by the State to the several schools demanded by the families.
Source: Divini Illius Magistri (Vatican.va)