Vouchers vs. Scholarships: What’s the Difference?

School choice is the broad idea of giving families more educational opportunities, while vouchers, scholarships, and Education Savings Accounts (ESAs) are specific ways families may access or pay for those options.

The terms are often used together, but they don’t mean the same thing.

At ACE Scholarships, when we talk about educational opportunities, we’re really talking about educational freedom. The goal isn’t to promote one type of school over another, it’s to give parents more opportunities to find the educational environment and resources that truly allow their child to thrive.

Vouchers vs. Scholarships vs. ESAs

The simplest way to understand the difference is to separate the idea of educational choice from the ways families may pay for it.

Term	What It Means	How It Generally Works
School Choice	A broad term for giving families more K–12 educational opportunities	Providing educational freedom for students to access—and attend—the schooling that best fits their needs
School Voucher	Public funding that can help eligible families pay private-school tuition	Funds generally follow an eligible student to a participating private school
K–12 Scholarship	Financial assistance for an eligible student’s education	May be funded privately or through tax-credit initiatives and administered by a Scholarship Granting Organization (SGO) like ACE Scholarships
Tax-Credit Scholarship	A scholarship funded through qualifying taxpayer contributions	Contributions go to an SGO like ACE, which delivers scholarships under applicable rules
Education Savings Account	Flexible education funding for approved expenses	Eligible families may use account funds for tuition and other qualifying educational costs

These options can overlap, but they are not interchangeable.

What Does “School Choice” Mean?

School choice is an umbrella term for policies and options that give families alternatives to an assigned neighborhood public school.

Depending on where a family lives, a school choice program or policy may provide access to different educational opportunities. These can include:

• Open enrollment in another public school or school district
• Charter schools
• Magnet schools
• Private schools
• Homeschooling
• Scholarship programs
• School voucher programs
• Education Savings Accounts

School choice describes the options available to families. It does not describe one specific type of funding.

That distinction matters because some educational opportunities are part of the public education system and free to attend, while others may require tuition or additional expenses.

What Is a School Voucher?

A school voucher generally uses publicly funded education dollars to help an eligible family pay tuition at a participating private school.

The specific rules vary by state.

Some school voucher programs are limited by factors such as household income, student disability, prior public-school enrollment, or geographic location. Others may have broader eligibility.

In most cases, school vouchers are tied primarily to school tuition rather than a wide range of educational expenses and resources. Families should also confirm which participating schools accept vouchers under the applicable state initiative.

What Is a K–12 Scholarship?

A K–12 scholarship provides funding that helps an eligible student access educational opportunities.

Scholarships may be funded through private donations, tax-credit initiatives, or other sources. Qualifying nonprofit Scholarship Granting Organizations (SGOs) like ACE Scholarships administer these scholarships under applicable eligibility requirements.

For more than 25 years, ACE Scholarships has been a leading SGO that helps families access K–12 educational opportunities that fit their child’s needs through scholarships.

Scholarship programs differ, but they can help reduce the financial barrier between a family and the educational environment they believe is the best fit for their child.

What Is a Tax-Credit Scholarship?

A tax-credit scholarship is funded through contributions connected to a tax-credit initiative.

Instead of the government directly providing a voucher to a family, an eligible taxpayer contributes to a nonprofit SGO. The SGO then uses those funds to deliver scholarships to eligible students under the applicable rules.

Some states already have tax-credit scholarship initiatives, with scholarships funded through qualifying taxpayer contributions.

Beginning in 2027, the federal Education Freedom Tax Credit (EFTC) will create a new way for qualifying taxpayer contributions to fund K–12 scholarships. What Is an Education Savings Account?

An Education Savings Account (ESA) is another type of education funding mechanism.

ESAs generally allow eligible families to use approved funds for qualifying educational expenses rather than only school tuition.

Depending on the state and applicable requirements, those expenses may include tuition, tutoring, curriculum, educational materials, or other approved educational costs.

Each state sets its own rules for eligibility and permitted uses.

Which Option Is Best for My Child?

There is no single option that is best for every student.

Parents are in the best position to understand their child’s needs, strengths, interests, and learning style. One child may thrive in their neighborhood public school. Another may benefit from a charter school, a private school, specialized tutoring, or additional educational services.

Start with the child rather than the funding mechanism.

Ask what kind of environment helps your child learn, where additional support may be needed, and which options are realistically available in your community. Then look at the financial resources that may help make those options possible.

Do All Families Have Access to the Same Options?

No. Educational options and funding mechanisms vary widely by state and, in some cases, by local school districts.

One state may offer vouchers or an ESA. Another may have tax-credit scholarships, open enrollment, charter schools, or a different combination of options.

Eligibility can also vary within the same state based on the specific initiative.

Families should review current state requirements before assuming they qualify for a particular scholarship, voucher, or account.

How Scholarships Fit Into Educational Freedom

Scholarships are one way to turn educational freedom into a realistic opportunity for families.

A family may know which school or educational resource would better support their child but still face a financial barrier. Scholarships can help close that gap.

That is why ACE focuses on educational freedom rather than promoting a particular type of school.

For more than 25 years, ACE Scholarships ACE has helped connect families with educational opportunities that may otherwise have felt out of reach: working alongside schools, communities, and partners who believe a child’s future shouldn’t be limited by circumstance.

A New Scholarship Opportunity Begins in 2027

The Education Freedom Tax Credit adds another scholarship-funding pathway beginning in 2027.

Eligible taxpayers may make qualifying contributions to SGOs like ACE, and in return, claim a federal income tax credit of up to $1,700 per taxpayer (subject to applicable requirements and their individual tax situation).

Taxpayers across the country can make qualifying EFTC contributions, but EFTC-funded scholarships can only be delivered to eligible students in participating states.

Unlike some traditional scholarship models, EFTC-funded scholarships support a range of qualifying K–12 educational expenses, not only private-school tuition.

That means the initiative can expand educational opportunities across different settings, from private school tuition to qualifying educational resources that support eligible students attending public schools.

Frequently Asked Questions

Is school choice the same as a school voucher?

No. School choice is the broad concept of giving families more educational options. A voucher is one specific funding mechanism that may help an eligible family pay tuition at a participating private school.

Are school vouchers and scholarships the same thing?

No. Vouchers generally use public education funds for eligible private-school tuition. Scholarships may be privately funded or supported through tax-credit initiatives and are often administered by nonprofit Scholarship Granting Organizations.

What is a tax-credit scholarship?

A tax-credit scholarship is funded through qualifying taxpayer contributions to a Scholarship Granting Organization. The organization then uses those contributions to deliver scholarships to eligible students under the applicable initiative.

Is an ESA the same as a scholarship?

No. An Education Savings Account generally gives an eligible family access to funds that can be used for approved educational expenses. A scholarship provides financial assistance under the rules of a particular scholarship organization or initiative.

Can scholarships be used for more than private-school tuition?

Students in both public and private schools (and beyond) benefit, although it depends on the scholarship. Some scholarships primarily support tuition, while others may cover additional educational expenses.

Beginning in 2027, qualifying Education Freedom Tax Credit scholarships may support tuition, tutoring, special-needs services, books, supplies, and other qualifying K–12 educational expenses under federal requirements.

Does every state offer school choice programs?

No. School choice policies and educational funding options vary by state. Families should check current state and local requirements to understand which options are available to them.

How do I know which educational option is right for my child?

Start with your child’s needs rather than a specific school type or funding mechanism. Consider learning style, academic support, school environment, extracurricular interests, transportation, cost, and the resources available in your community.