FSTC for Public Schools
The Federal Scholarship Tax Credit (FSTC) is not only a private tuition program. Public school students qualify, academic tutoring and many out-of-pocket school costs are eligible expenses, and nothing is taken from a district budget or enrollment.
What district leaders often have not heard
The federal credit reached most districts described as a private school choice bill. Under the statute, the same scholarship funds can pay for academic tutoring and other educational costs for public school students.
Your students qualify
Eligibility runs to students who are eligible to enroll in a public K-12 school, in households under 300% of area median income. In most districts that covers the large majority of families.
Tutoring and school fees are eligible
Public school districts can receive scholarship dollars for several categories of expenses families currently pay out-of-pocket: pay-to-play athletic and activity fees, AP and IB exam costs, dual enrollment course fees, CTE certification fees, technology for home use, and academic tutoring.
It is not a voucher
Funds flow from private donors to nonprofit Scholarship Granting Organizations, and from those organizations to families. The money does not pass to or through FundEDU, and nothing leaves a district budget or enrollment.
Districts may also be paid for school-provided supplementary services like extended-day programs, summer school, and credit recovery, though Treasury's resolution of the supplant question may constrain what districts can bill for. The two open questions most relevant to districts are (1) whether scholarships can pay for services already funded through public appropriations, and (2) whether off-site afterschool and summer programs qualify under Bucket 2. Until Treasury issues proposed regulations, districts should plan around the confirmed-eligible categories and treat pending categories as upside.
The three decisions a ready district makes in 2026
The credit takes effect January 1, 2027. These are the decisions boards are working through this year.
1. Whether to voice support for your state's opt-in
A state must elect to participate before any scholarship reaches families in it. This decision gates everything else.
2. Which SGO relationship serves your families
Scholarship Granting Organizations award the scholarships. Districts consider which relationship fits, and whether their education foundation plays a role.
3. How families learn about it
Families apply to an SGO themselves. The districts whose families apply early are the districts that told them.
Resources for districts
The District Tutoring Briefing
A one-page, board-ready summary of what the credit could mean for tutoring in your district.
Request the BriefingEligible Expenses
What FSTC scholarships can pay for, split into confirmed by statute and pending Treasury guidance.
See the ListState Status Map
See which states have opted in and which are pending governor action.
View MapThis page is informational and is not tax or legal advice. The federal credit is up to $1,700 per taxpayer per year, a planning figure pending final U.S. Treasury regulations. Scholarship availability depends on state participation, SGO capacity, and family application.
