Kentucky public school districts sign on with one statewide scholarship nonprofit ahead of the federal tax credit
By Oct. 28, 41 districts and three private schools had signed agreements with the Kentucky Education Fund, its adviser said. The Diocese of Covington chose American GOAL for its schools. Scholarship granting organizations may accept contributions from Jan. 1, 2027.
Signed with the Kentucky Education Fund by Oct. 28
Frankfort. Forty-one Kentucky public school districts and three private schools had signed agreements with the Kentucky Education Fund, a new statewide scholarship organization, as of Oct. 28, Will Hodges, its adviser and a former Green County superintendent, told LINK nky. He said the fund expects 100 agreements by Jan. 1, 2027, when such organizations may start accepting contributions under the federal scholarship tax credit.
Kentucky's participation is not new: lawmakers opted in with House Bill 1, overriding Gov. Andy Beshear's veto on March 16 and 17, and the state is one of 30 on the IRS list for 2027. A taxpayer may claim a credit of up to $1,700, or $3,400 on a joint return, for cash contributions. What is new is how public schools are joining: a school receives the contributions only through an organization it has signed with, and dozens of districts have signed with the same one.
What the districts sign
The fund filed its articles of incorporation July 15, received federal recognition as a 501(c)(3) nonprofit July 20 and was approved by the Kentucky Secretary of State on Aug. 27, it said in September. The executive directors of the state's 15 Area Development Districts, which together cover all 120 counties, served as its incorporators, though the fund is legally separate from them.
Under the agreement Ludlow Independent Schools approved Oct. 15, the district recommends students and verifies their enrollment, while the fund makes the final decision on awards and pays the district each semester. The fund passes 1.5 percent of each gross contribution to the district for its help with applications, and either side may end the agreement on 30 days' notice.
In an Oct. 16 update the fund said it was still waiting for federal guidance on which expenses scholarships may cover. Ludlow Superintendent Jason Steffen told LINK nky the district signed so as not to be "flat-footed come Jan. 1" and would not use the fund alone. Newport's school board heard from the fund on Oct. 28, and its chair asked members to prepare for a later decision.
Catholic schools choose a national partner
The Diocese of Covington went another way. Bishop John Iffert announced Oct. 15 that the diocese had selected the American GOAL Scholarship Program, a program of the Georgia-based GOAL Scholarship Program Inc., for its schools, which LINK nky put at 38. The diocese said GOAL has administered scholarship tax credit programs for more than 18 years, and that scholarships can pay for tuition, fees, academic tutoring, extended day programs and supplies.
At least 20 organizations have filed with the state as scholarship granting organizations, LINK nky reported. The Secretary of State sends Kentucky's list to the Treasury.
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