EFTC Basics | Educational Guide

What Can EFTC Scholarship Funds Be Used For?

A scholarship is only as valuable as what it can pay for. Here’s a clear breakdown of what EFTC scholarship funds cover — and what falls outside the eligible expenses list.

Tommy Schultz CEO, American Federation for Children

A scholarship is only as good as what it can actually pay for. Here’s what EFTC scholarship funds cover — and what they don’t.

When a student receives a scholarship through a qualified SGO, the question that matters to the family is practical: what can we actually use this for? The scope of eligible expenses is defined by the EFTC’s federal framework and implemented by qualified SGOs in compliance with federal requirements.

What Qualifies as an Eligible Educational Expense

Eligible Expenses Under the EFTC Framework

Tuition and enrollment fees at eligible private schools, microschools, learning pods, and hybrid programs that meet federal qualification criteria.

Tutoring and supplemental instruction from qualified providers — including one-on-one tutoring, reading programs, and subject-specific instruction.

Curriculum and instructional materials including textbooks, workbooks, educational software, and learning kits for home-based or hybrid instruction.

Specialized instruction for students with learning differences or disabilities — including services that fall outside standard school programming.

Other qualified expenses as specifically designated under the EFTC’s implementing regulations and the policies of the distributing SGO.

What Scholarship Funds Cannot Cover

Generally Not Eligible

General household expenses unrelated to education — the scholarship is specifically for qualifying educational costs.

Expenses at ineligible programs — schools or programs that do not meet the federal criteria under the EFTC framework cannot accept scholarship funds.

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Who Decides What’s Covered?

The scope of eligible expenses is defined by the Education Freedom Tax Credit’s federal framework and implemented by qualified SGOs in compliance with those rules. The SGO — not the donor, and not the family — is responsible for ensuring that scholarship funds are used for qualified purposes.

This is why working with a well-run, compliant SGO matters. AFC Scholarship Fund maintains the compliance infrastructure to ensure funds are used correctly — protecting both students and donors from eligibility mistakes that could affect the credit.

How Families Direct the Funds

Within the scope of eligible expenses, the student’s family makes the choices. They select the school or program, they identify which qualified expenses to apply the scholarship toward, and they work with the SGO on disbursement.

“The scholarship is a resource. The family decides how to use it. The SGO ensures it’s used right.”

Frequently Asked Questions

What can EFTC scholarship funds be used for?

Tuition and fees at eligible schools, tutoring, curriculum and educational materials, specialized instruction, and other qualified educational expenses as defined under federal guidelines and the distributing SGO’s policies.

Can EFTC scholarships be used at public schools?

Yes. The EFTC was built around one idea: families should choose the education that’s right for their child, regardless of sector. That includes public. Within the scope of eligible expenses, the student’s family makes the choices.

Can scholarship funds pay for homeschooling expenses?

Certain homeschool expenses including curriculum and instructional materials may qualify. Eligibility depends on federal guidance and the specific SGO’s policies.

Who decides how scholarship funds can be used?

The scope of eligible expenses is defined by federal law and implemented by qualified SGOs. The SGO ensures funds are used for qualified purposes — protecting both students and donors.

Disclaimer: This article is for informational and educational purposes only and does not constitute tax, legal, or financial advice. Tax laws are subject to change. Please consult a qualified tax professional regarding your individual circumstances. The Education Freedom Tax Credit is effective January 1, 2027. Contribution limits and program details are subject to IRS guidance and final program rules.