A student needs math tutoring. Another needs equipment for a career and technical program. A third family is paying for additional services to support their child with a disability. Another parent needs an after-school program because the school day ends hours before the workday does.
Those are not unusual problems. They are the kinds of expenses public-school families deal with every day. Thankfully, beginning in 2027, some of them may be eligible for scholarship support through the new Federal Scholarship Tax Credit.
Despite this, that part of the program has gotten surprisingly little attention in national discourse. Instead most of the conversation around existing federal guidance has focused on paying for private-school tuition. That is certainly one use of it, and one that many families and advocates are excited for. But federal law also makes clear that qualified education expenses can be covered by scholarship funds for students who remain enrolled in public schools. Examples include many of the services also fundable at private or charter schools, including: tutoring, disability services, career-training equipment, after-school programming and other eligible educational costs.
That matters even more when you consider how many families will be eligible. The program’s income limit is set at 300 percent of area median gross income, a threshold wide enough that advocate estimates put eligibility at roughly nine out of ten K–12 students nationwide. This means that most of the eligible students are, and will continue to be public-school students.
A Lesson From PA
At FundEDU, we work with a number of public schools in Pennsylvania, where tax-credit-supported education has been part of our educational landscape for decades. Through the state's Educational Improvement Tax Credit program, PA taxpayers are able to support approved organizations providing innovative educational programs to public schools. Education foundations across the Commonwealth have used that structure to bring additional resources into their districts.
For example, just recently in Northwestern Lehigh, a $100,000 EITC-supported contribution to the district's education foundation has helped support STEAM programming, classroom improvements and educational resources. In Lancaster, EITC contributions to the district's education foundation support several programs far beyond what traditional school funding can provide. Beyond that, and in places such as Philadelphia and Norristown, there are many organizations working with the state's tax-credit system in order to fund programs serving students in public schools.
Those examples are important because they make one thing clear: education tax credits benefiting public-school students are not a hypothetical idea.
Granted, the upcoming federal program is set to be implemented differently. It provides scholarships for individual students rather than operational support for schools and/or districts. This means that a principal, or superintendent can’t simply take scholarship dollars and add them to the general fund. Instead, we need to look at the question from the family's side.
What is that family paying for today that the school can’t currently provide?
Maybe it is tutoring when a student starts to fall behind in algebra or calculus. Maybe it is materials or equipment required to participate in a technical program. Maybe it is an educational service for a child with a disability. Maybe it is an extended-day program, transportation, technology or another qualified expense.
If a scholarship is made available to cover those costs at their existing public school, the students and their families receive the support they need, without any need to change schools. That should make the federal credit interesting even to people who have little to no interest in the larger school-choice debate, as public-school leaders have the opportunity to gain significantly more support for their families. However, this can only be done if those leaders view the FSTC program as another potential resource available to students already sitting in their classrooms, instead of a challenge to their enrollment.
At FundEDU, we have already begun working on ways to identify the expenses families are struggling to cover, as the existing data already reveals where the gaps exist. For example, Districts already document unmet demand for tutoring and enrichment. Career and technical programs should already have ideas about equipment costs. Organizations serving students with disabilities should look closely at which services qualify, especially as Treasury plans to release more information next month. But most importantly of all, public-school leaders should begin conversations with Scholarship Granting Organizations this fall about the ways in which scholarship applications and programs are being designed to serve their students.
Of course, eligibility will never guarantee a scholarship as there are many steps in this program. States must participate. SGOs must qualify. Donors must be informed, and contribute. Schools and families will need to apply to programs with limited funding in the initial years.
But the basic question is already worth asking: if roughly nine out of ten students may qualify, what could this actually pay for?
For public-school families, I think the answer is more than most people realize.