Education Freedom Tax Credit and Tutoring: Key Takeaways

By Nate Casey
Chief Strategy Officer, Pearl Education

TL;DR

The Treasury Department’s latest comments suggest four important things:

Public school students appear to be a major focus of the Education Freedom Tax Credit.
Tutoring is increasingly being discussed as a core use of scholarship funds, not a peripheral one.
Treasury appears focused on expanding participation through flexible eligibility and implementation rules.
Future accountability requirements could place greater emphasis on understanding tutoring participation, dosage, and outcomes.

Many details remain unresolved, but the signals coming from Treasury suggest tutoring could become one of the most important educational services supported through the program.

For the past year, most conversations about the Education Freedom Tax Credit have centered on politics. What has received far less attention is a simpler question:

What could this mean for students, schools, and academic supports like tutoring?

This week, the U.S. Treasury Department provided some of the clearest clues yet.

At a roundtable focused on implementation of the tax credit, Deputy Assistant Secretary for Tax Policy Kevin Salinger previewed several areas expected to appear in forthcoming regulations. While formal guidance has not yet been released, the discussion offered an early look at how federal officials are thinking about the program.

Public School Students Were Front and Center

Throughout the discussion, speakers highlighted how scholarship funds could support tutoring, intervention services, special education supports, enrichment opportunities, and other supplemental learning experiences for students attending public schools.

That is notable because much of the public conversation has focused almost exclusively on private school scholarships.

The vision described by Treasury appeared much broader—one in which scholarship-granting organizations help connect new funding streams to students across public, charter, and private education settings.

Tutoring Appears to Be a Core Use Case

Treasury also provided what may be the strongest signal yet that tutoring is squarely within the program’s intended scope.

Salinger indicated that future guidance will address tutoring and special-needs services while emphasizing support for “additive” educational services.

The specific rules have not yet been written, but nothing in the discussion suggested tutoring is an afterthought. If anything, tutoring appears increasingly likely to become one of the program’s primary uses.

Key Questions Still Remain

Several important operational questions remain unanswered:

How will Treasury define tutoring?
Will school-day tutoring qualify?
What role can districts play in coordinating or accessing funds?
How will “additive” services be interpreted?

Those answers are expected to come later through a separate Section 530 guidance process.

Perhaps the most intriguing part of the discussion involved accountability. Treasury indicated that scholarship-granting organizations will likely be subject to both financial and programmatic audits.

Financial oversight is expected. Programmatic oversight is where things become especially interesting.

While Treasury has not yet defined what these audits will include, the concept raises important questions about visibility, implementation quality, service delivery, and outcomes. In the context of tutoring, that could mean understanding which students received services, how much tutoring occurred, whether attendance and dosage targets were met, and what outcomes resulted.

Before organizations can demonstrate impact, they first need a clear understanding of participation and implementation. If scholarship organizations are ultimately expected to demonstrate not only that funds were distributed appropriately but also that services were delivered effectively, the conversation quickly shifts from funding alone to evidence and impact.

That possibility should not be overlooked.

Why This Matters

For years, education has faced a familiar challenge: funding often arrives before systems exist to determine whether services actually reach students and produce results.

High-impact tutoring has one of the strongest evidence bases in education, but implementation quality still varies widely. As new funding opportunities emerge, questions around participation, attendance, dosage, and outcomes become increasingly important.

If this funding stream grows at scale, policymakers and scholarship organizations will want confidence that investments are translating into meaningful student support. That makes the conversation around accountability just as important as the conversation around eligibility.

Looking Ahead

Proposed regulations are expected later this summer, followed by a public comment period. Tutoring-specific guidance will come afterward.

Between now and then, districts, tutoring providers, scholarship organizations, and state leaders have an opportunity to think not only about how these funds might be accessed, but how they can be implemented responsibly and measured effectively.

The emerging story is not simply about a new tax credit. It is about the possibility of creating a significant new funding source for academic support at a time when schools continue searching for sustainable ways to help students recover and accelerate.

The details still matter, and many have yet to be written.

But if the signals coming from Treasury are any indication, tutoring may be much closer to the center of this conversation than many people realize.

Understanding how funding is being used is becoming just as important as securing it. Pearl helps districts, states, and tutoring organizations coordinate programs, track participation and dosage, and gain clearer visibility into outcomes. Learn how educational organizations are using the Pearl Student Support Platform to track the dosage and impact of their work.