At least 51.7 million children to be eligible for scholarships under Education Freedom Tax Credit

A new analysis by the American Federation for Children (AFC) estimates that approximately 51.7 million children in the country will be eligible to receive scholarships through the Education Freedom Tax Credit (EFTC), a federal program set to take effect on Jan. 1, 2027, which aims to expand educational options for families.

The study, authored by Patrick Graff, the organization's lead researcher, estimates that 91.7% of the approximately 56.4 million children currently enrolled or eligible to enroll in the K-12 education system would be eligible for these scholarships.

The Education Freedom Tax Credit was passed by Congress in 2025 and will allow taxpayers to receive a federal tax credit of up to $1,700 for donations they make to nonprofit organizations dedicated to awarding educational scholarships. These organizations will then distribute the funds to students who meet the requirements established by law.

According to the report, students who are eligible to enroll in a public elementary or secondary school and whose household income is at or below 300% of the area's median gross income, as calculated by the Department of Housing and Urban Development (HUD), with adjustments based on family size.

Nearly 31 million live in participating states

The analysis notes that 31 states have already joined the program or announced their intention to do so. These states are home to 30.9 million eligible students, representing 59.8% of the national total.

In contrast, 19 states and the District of Columbia have not yet joined the initiative. According to the study, 20.8 million students who meet the eligibility requirements live in those jurisdictions, and their access to scholarships will depend on whether their governors decide to join the program.

The report also highlights that California, with 5.9 million potentially eligible students, has the largest eligible population among the states that have not yet announced their participation.

Participation will depend on each state

The document clarifies that the estimates reflect the number of students who could receive a scholarship, not the number who will ultimately participate in the program. Implementation will depend on whether states decide to join, the volume of donations received by the organizations responsible for administering the grants and these entities' capacity to distribute the resources.

The grants may be used for various educational expenses, including tuition, tutoring, books, supplies, technology for educational purposes, transportation and therapies for students with special needs.

AFC calls on governors to join program

In a statement, Patrick Graff said the report provides the first state-by-state estimates of the population that qualifies for the program and noted that nearly nine out of 10 children meet the income and enrollment criteria.

"The 31 states that have committed are home to 30.9 million eligible children, and the jurisdictions that have not yet opted in account for another 20.8 million. These estimates provide a baseline for tracking this new opportunity presented by the EFTC," the researcher noted.