How are scholarships funded?

The funds are generated by donors who receive a dollar-for-dollar federal tax credit for contributions to nonprofit scholarship organizations.

In which states will scholarships be available?

Scholarships will be available to residents of all 50 states and DC as long as the states opt in and provide a list of approved SGOs to Treasury each year.

What are examples of allowable uses of scholarships?

Any expense allowed for Coverdell accounts including tuition, fees, academic tutoring, special needs services, books, supplies, room and board, uniforms, transportation, computer technology or equipment.

How do I apply for a scholarship?

Once the provision takes effect in 2027, families will be able to apply directly to an approved scholarship organization in their state.

I live in a state with an existing scholarship program. How will this help me?

This scholarship tax credit will increase the funding available to scholarship students. Scholarships could potentially be awarded to students who would otherwise not have received a grant under a state’s eligibility guidelines, or it can mean higher scholarship amounts.

Can I earmark my donation to a specific child or school?

A scholarship organization can choose to allow donors to earmark their contribution to a specific school or group of schools, but not to a specific child.

Do I get a tax credit for the amount I spend on my child’s tuition?

No, the tax credit is for donations to scholarship organizations, not tuition paid to schools. The donor receives a tax credit whether or not he or she has a child.

What are the eligibility requirements to receive a scholarship?

You must earn 300% of the area median income or below as calculated by HUD. !function(e,n,i,s){var d="InfogramEmbeds";var o=e.getElementsByTagName(n)[0];if(window[d]&&window[d].initialized)window[d].process&&window[d].process();else if(!e.getElementById(i)){var r=e.createElement(n);r.async=1,r.id=i,r.src=s,o.parentNode.insertBefore(r,o)}}(document,"script","infogram-async","https://e.infogram.com/js/dist/embed-loader-min.js");

Executive Directors - Agudath Israel of America

The New Federal Scholarship Tax Credit: How should Executive Directors Prepare Now?
1. Understand the law
2. Understand the timeline
3. Look at your school’s data – who is eligible to receive a scholarship? who can donate? set goals.

4. Will your governor opt in? Can you help?
5. How will this integrate with your existing financial aid process?
6. How can you expand your donor base outside of the Orthodox community?
7. Does your school/community need to create your “own” SGO?
8. Is it best to allow donors to earmark to specific schools or pool with other schools?
9. Should equal scholarships be awarded to every eligible student or on a sliding scale?
10. Understand how this will work with existing state programs