The new federal tax-credit scholarship program has the potential to reshape academic performance by removing key barriers that limit student preparation.
Passed as part of the One Big Beautiful Bill Act, the scholarship provision may serve as a catalyst by easing economic burdens that often restrict students’ access to quality preparation materials and coursework.
Funded through individual and business donations to scholarship granting organizations, the program provides scholarships to students from households earning no more than 300 percent of the area median gross income, regardless of whether they attend public, private, or home-based schools. Donors then receive a 100 percent dollar-for-dollar federal tax credit up to $1,700. (The government never writes a check for these scholarships, as the mechanism driving the program is a federal tax credit, not a federal expenditure.)
The scholarships can be used toward a variety of educational expenses, including tutoring, study materials, supplemental and enrichment resources, and exam fees, to name a few, helping remove financial barriers that would otherwise present students with trade-offs when it comes to developing their academic preparedness.
Minnesota’s four-year graduation rate for the class of 2024 is the highest to date, yet math and reading proficiency are the lowest on record. Amid student proficiency drops, ACT scores are maintaining record lows. Large proficiency gaps persist between lower-performing students and their higher-performing peers
But if Gov. Tim Walz approves participation in the federal tax-credit scholarship program, lower income families would gain a lifeline — access to the same kinds of tutoring and prep resources that wealthier families can already afford.
According to a compendium of ACT test preparation research, students who engage in test preparation activities before taking the ACT test see about a one-point gain in their composite test score. Even this modest increase could help them qualify for merit-based aid or college admission. “A single test point can give you access to thousands of dollars in financial aid to pay for college!” notes the ACT, the nonprofit organization that administers the college readiness exam. Students’ test anxiety also decreases when they engage in test preparation, according to the research noted above.
Granted, the impact of test preparation varies based on a student’s motivation, the amount of effort they apply, and the learning environment in which the preparation occurs. Additional factors like quality of prior schooling and home environment also play a big role in performance disparities.
The value of the federal tax-credit scholarship program, though, extends well beyond test-prep support. It also opens the door to new learning environments, tutoring, academic enrichment, advanced coursework, special education services, and other learning opportunities that can strengthen students’ overall academic trajectory.
_________________
Encourage Gov. Walz to opt Minnesota in to the new education tax-credit program by signing the petition here.
