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K–12 Scholarships Are Coming in 2027

Beginning in 2027, almost all K–12 students across the country will be able to apply for new K–12 scholarships. Students in traditional or charter public schools, for example, might access scholarships for such educational expenses as tutoring, extended-day programs, or educational technology. Families who choose private or religious schools might receive scholarships for tuition.

These K–12 scholarships are the result of a new federal tax credit that encourages private charitable donations to scholarship granting organizations (SGOs). The credit is sometimes called the Federal Scholarship Tax Credit (FSTC) or the Education Freedom Tax Credit (EFTC).

Families will work with SGOs — not their state or federal government — to apply for FSTC-funded scholarships.

A Few Obstacles

Students in some states could be blocked from receiving FSTC-funded K–12 scholarships. The law says their governors must "voluntarily elect" to participate — or opt in — before SGOs can distribute FSTC-funded scholarships in the state. Learn more about where your state stands →

Once your state opts in, scholarship recipients must still satisfy two other eligibility requirements:

  1. Your student must be “eligible to enroll in public elementary and secondary school” in the state.

  2. Your household income cannot be more than three times the area gross median income (AMI). This amount varies substantially across the country, but it generally disqualifies 10–15% of households in an area. EdChoice offers a county-by-county breakdown of 300% of AMI for 2026. Keep in mind that this restriction applies even if you have a state-based program that is universal and is not means tested.

Allowable Education Expenses

FSTC-funded scholarships can cover a wide variety of educational expenses. These are listed in law already for a tax-advantaged custodial account known as Coverdell (IRC § 530(b)(3)(A)).

But this does not mean that every FSTC-funded scholarship will cover the full range of allowable expenses. SGOs are empowered to design their own scholarship programs. We expect a variety of SGOs will form to best serve students and attract sustainable donations. Families will choose among the SGOs on the State SGO List to find the one that best meets their needs.

Many SGOs will focus on specific types of scholarships, such as those for tutoring, afterschool programs, or tuition. As families move toward customizing the education of their children, we anticipate more SGOs will offer ESAs (education savings accounts) covering the full range of allowable expenses.

Here is the full list of items from Coverdell. As families move toward customizing the education of their children, we expect that more SGOs will offer ESAs (education savings accounts) covering the full range of allowable expenses:

Academic tutoring
Special needs services
Tuition and fees
Books, supplies, and equipment
Room and board
Uniforms
Transportation
Extended day programs
Computer technology, internet access, and related services

The Treasury Department announced it will provide additional clarity around this list of eligible expenses, including whether non-school education providers can deliver these services and homeschool and other students can receive scholarships covering these expenses

Finding an SGO

Eventually, you will want to connect with one or more SGOs operating in your state and serving children like yours. While there will be state-specific SGOs, the list of SGOs for your state is not yet available because Treasury has not set out the timeline or process for submitting SGO lists. Once the SGO lists are formally submitted to Treasury, you can find them on our state map.

The good news is that several national SGOs have already announced their intention to serve students in every state and Washington, DC:

Afterschool Alliance ACE Scholarships AFC Scholarships Accord Kids ACSI Children's Tuition Fund Children's Scholarship Fund Education Superhighway Endowment Project Foundation Future School Fund National Alliance for Education Foundations Reficio TEACH Coalition

If you represent a multi-state SGO not yet on this list, please email add.sgo@TheFSTCcoalition.org with your basic information and a link to your website.

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