The Education Freedom Tax Credit (EFTC) will create new scholarship opportunities for eligible students beginning January 1, 2027.

For schools, the opportunity is not only to understand the tax credit. It is to prepare for how scholarship participation could affect families, enrollment processes, administration, and day-to-day operations.

Schools do not need to predict exactly how the initiative will develop. They can focus now on the processes and systems needed to respond as federal and state implementation becomes clearer.

Start With Student Access

The most important question is simple: How can scholarship opportunities help more students access your school?

For some families, cost can limit the schools they are able to consider. Scholarship support may give eligible students additional resources to pursue an educational environment that best fits their needs.

That means EFTC readiness should begin with the student experience, not with tax mechanics.

Schools can start by identifying where financial barriers affect prospective or current families and where scholarship funding could make enrollment or continued attendance more attainable.

Review Your Scholarship Infrastructure

Scholarship participation requires more than receiving funds.

Schools will need processes for:

• Confirming enrollment or attendance information
• Coordinating with Scholarship Granting Organizations (SGOs)
• Managing payment or scholarship information
• Maintaining required records
• Supporting families with questions
• Sharing scholarship data when appropriate

The federal EFTC places specific requirements on qualifying SGOs, while schools may have their own responsibilities depending on how individual scholarship arrangements are structured. Those details should be verified as implementation guidance develops.

The goal now is not to build around assumptions. It is to identify which internal processes may need to connect with an outside Scholarship Granting Organization.

Make the Family Experience Easy to Understand

A scholarship opportunity is only useful if families can understand how to pursue it.

Schools should consider the experience from a parent’s perspective.

Where will families learn that scholarship assistance may be available? Who can answer basic questions? What information will families need from the school? How will the school explain the difference between applying for admission and applying for scholarship support?

Clear communication can reduce confusion and make it easier for families to move through both processes.

Schools should also avoid promising eligibility or scholarship awards before those determinations have been made by the appropriate SGO.

Understand How EFTC Participation Works

Under the new federal initiative, eligible taxpayers with a federal income tax liability can receive a dollar-for-dollar tax credit up to $1,700 per taxpayer, or $3,400 for married couples filing jointly on contributions made to qualifying SGOs like ACE beginning January 1, 2027.Those SGOs then administer scholarships for eligible students under the requirements of Internal Revenue Code Section 25F.

State participation is also required to distribute funds in that state. A state’s decision to opt-in does not automatically mean every Scholarship Granting Organization or school in that state is ready to operate under the federal initiative. Qualifying SGO status depends on Section 25F requirements and the applicable participating state’s SGO list.

For schools, this means readiness should be based on verified participation and qualification status, not anticipated outcomes.

Plan for Scholarship Administration

As scholarship opportunities grow, schools will face more applications, questions, records, payments, and reporting tasks.

That is where operational planning becomes important.

Schools should evaluate whether their existing systems can support scholarship participation efficiently. Consider who owns scholarship-related tasks internally, how information moves between departments, and how the school will coordinate with an SGO.

ACE Scholarships brings more than 25 years of scholarship experience to this work. Through EmpowerEd by ACE Scholarships™, ACE also provides a scholarship management platform designed to support applications, awards, reporting, and administration.

ACE provides the scholarship expertise and operational support. EmpowerEd provides the technology. Together, they can help reduce the administrative burden so schools can stay focused on serving students and families.

Prepare Without Assuming Outcomes

EFTC implementation is still developing.

Schools should avoid assuming that a state will complete the necessary participation steps, that a particular SGO will qualify, or that scholarship funds will produce a specific enrollment result before those facts are established.

A stronger approach is to prepare for multiple scenarios.

Review your enrollment process. Identify potential administrative gaps. Clarify who will communicate with families. Determine what data and systems may need to connect with a scholarship partner.

These steps can improve readiness without depending on uncertain outcomes.

Build a Practical EFTC Readiness Plan

A simple readiness framework can help schools organize their next steps:

1. Assess access. Identify where scholarship support could help eligible families consider or remain at your school.
2. Review operations. Map the processes, people, and systems involved in enrollment and scholarship administration.
3. Prepare family communication. Make scholarship information clear without promising eligibility or awards.
4. Evaluate partners. Understand how an experienced SGO and scholarship management platform could reduce administrative work.
5. Monitor implementation. Recheck federal and state guidance before making operational commitments.

The goal is not to predict what the EFTC will do for your school. It is to be ready to serve families well if and when qualifying scholarship opportunities become available.

Prepare Your School for What Comes Next

The Education Freedom Tax Credit will create new ways for eligible students to access scholarship support.

Schools that prepare early can better understand the family experience, identify operational needs, and evaluate the partners and systems that will support participation.

ACE Scholarships can help schools navigate scholarship administration while keeping the focus where it belongs: helping more students access educational opportunities that best fit their needs.

Submit a Partnership Inquiry to learn how EmpowerEd by ACE Scholarships™ can support your school’s EFTC readiness.