A family cannot apply for a scholarship it does not know exists. That may end up being one of the more important facts about the Education Freedom Tax Credit when it begins in 2027. To date, I have spent plenty of time talking about governors, state participation, Scholarship Granting Organizations and Treasury regulations. While these are going to be the people and things that determine whether the program can operate, they don’t determine if a family actually hears about it. For public-school families, that may be the harder part. Let's be honest, most parents are not following IRS notices or waiting for their state to publish an SGO list. Realistically, they probably aren’t even aware if their state has opted in or not. But, I can promise you that they are talking to teachers, counselors, principals, special education staff, and CTE staff. In other words, they are talking to people they trust, who are already running the programs their children attend. That puts public schools in a critical position, and I don’t know if anyone has recognized it yet. Federal law does not limit these scholarships to private-school tuition. Qualified K–12 expenses include costs born by public-school families, and federal guidance has indicated that these scholarships can fund tutoring and support services for students with disabilities. At FundEDU, our current public-school work is built around the same practical point: families can have eligible education costs even when their child has no intention of changing schools. But we also have seen firsthand that just making support available isn’t enough if no one knows about it. With the EFTC, the public school does not need to know, or make a decision about if a specific expense qualifies. Instead, the school's job is much simpler. They just need to know where to send the parent who needs help. If you are a public school leader reading this article, I suggest starting with the following questions: Which SGOs intend to serve families in your community? Who at the district or education foundation keeps that information current? Do counselors know the program exists? Can a parent find one reliable source of information or do they have to try and understand the EFTC from scratch?

One of the fastest ways to make a new funding program harder than it needs to be is to build an organization before deciding what job it actually needs to do. Unfortunately, I think there is a real risk of that happening with the new Education Freedom Tax Credit Scholarship. After months of speaking with leaders, I am starting to notice a trend. School and networks hear about Scholarship Granting Organizations and then immediately start thinking about structure. Should our school or network become one? Do we need a new nonprofit? Who handles the applications? Who owns compliance? Personally, for all of the educators reading this, I would start somewhere else. Start with the students. Under federal law, an SGO has a specific job. It must be an eligible 501(c)(3), must keep qualified federal contributions separate from its other funds and must meet federal scholarship requirements. It has to serve at least ten students who attend two or more different schools and spend at least 90 percent of its income on scholarships. This is not a simple process, and requires real infrastructure and expertise. As such, it may make sense for some established scholarship organizations and education nonprofits to take this task on, but not every school community needs to build their own. Our guidance at FundEDU is much simpler (and saves you time!): consider partnering with an SGO before deciding you need to run one. That comes directly from the work we already do. In Pennsylvania's tax-credit system, FundEDU plays a critical role in making education funding move: donor outreach, lead generation, contribution tracking, documentation, compliance, reporting and follow-up. We help schools understand the opportunity, develop the donor side, and ultimately connect the people involved so students can benefit. This provides another important lesson that I think we can adopt to the EFTC in that schools do not need to duplicate the expertise that makes an organization like ours effective. Instead, schools have the information that we need much more: knowledge of their communities.

There is a version of the Education Freedom Tax Credit argument I keep hearing that sounds simple enough: a taxpayer gets a $1,700 credit, a scholarship organization gets the contribution, and a public school must be $1,700 poorer. That is not how the program works. Beginning in January 2027, an eligible taxpayer can receive a federal income-tax credit of up to $1,700 for a qualified donation to a Scholarship Granting Organization (SGO) operating in a participating state. That federal credit reduces what that taxpayer otherwise owes in federal income taxes. What it does not do is reach into a school district's local property-tax collections. This means it does not reduce a state education appropriation, or any other state funding stream, by $1,700. Now, in terms of the bigger picture, there can still be a discussion about the financial impact of the program. A federal tax credit means the federal government collects less revenue, in this case estimated to be approximately 24 billion a year, than it otherwise would from the taxpayer claiming it. Reasonable individuals can believe that Congress should collect that money and spend it somewhere, even if it isn’t on education. But that is a different argument from saying the money comes out of local funding and the difference matters because leaders across the country are making and influencing decisions about this program. With that in mind, I wan to highlight that a state's participation does not require the governor to move money out of the state education budget. Instead, the state identifies qualifying 503c organizations as approved SGOs. Donors freely contribute and claim the federal credit. SGOs then award scholarships to eligible families. The best part? The students receiving those scholarships can remain exactly where they are! Federal guidance specifically contemplates tutoring at public schools, support services for students with disabilities, career-training equipment and uniforms, and after-school enrichment. We can start with the simplest example. A student stays enrolled in her local middle school and receives a scholarship from a private organization to pay for after school math tutoring. Nothing in that scholarship transaction deducts the tutoring cost from the district's state or local allocation. The student simply has another educational and financial resource to make sure her unique needs are served.

A few months ago, a local bank wrote a $100,000 check to the Northwestern Lehigh Educational Foundation. However, this was not a payment for private-school tuition. Instead, this money, given through Pennsylvania's Educational Improvement Tax Credit program, was designated for approved educational needs in the Northwestern Lehigh School District, including STEAM programs, modern teaching tools and classroom improvements. A few months later the Orrstown Bank made a similar EITC contribution, but this was made to the Lancaster Education Foundation. The School District of Lancaster often uses these sorts of donations as grants for programs that expand learning experiences and provide opportunities beyond what traditional state and federal funding can support. Most importantly, neither example requires a student to leave a public school. Here at FundEDU, we work with both public and private schools across Pennsylvania, because we know that "education tax credits" and "public schools" are not opposites. While Pennsylvania's EITC program does have a scholarship side, it also allows for qualifying contributions to Educational Improvement Organizations. Put more simply, businesses receive tax credits for qualifying contributions, and then the state's approved EIOs provide financial support to public-school districts across the Commonwealth. Now, the upcoming federal Education Freedom Tax Credit is not Pennsylvania EITC copied across the country. In particular, Pennsylvania's EIO structure allows donors to support programs operating in or for public schools, whereas the federal credit will work through scholarships awarded to eligible individual students. However, this is the part public-school leaders anywhere in the country should notice: federal guidance directly includes expenses connected with public schools as eligible. The Department of Education gives examples including tutoring at public schools, services for students with disabilities, equipment or uniforms for career-training programs, and after-school enrichment.