This story was written by Lia Salvatierra, our new Education Reporter. Find more of Lia’s reporting here. Do you have an NKY education story? Email lsalvatierra@linknky.com.
Northern Kentucky’s K-12 public and Catholic schools are starting to enroll in a program to generate more federal revenue from a new income tax credit, though many details about how the program will work remain unclear.
Kentucky lawmakers overrode Gov. Andy Beshear’s veto in March, opting into the federal program that matches taxpayers’ contributions to entities called “Scholarship Granting Organizations” with a federal income tax credit for every dollar up to $1,700, or a combined $3,400, for couples filing taxes together.
Scholarship Granting Organizations, or SGOs, function to both collect and administer contributions to K-12 schools — private schools, public schools and in Kentucky, homeschools — as scholarships to support eligible households.
Any household that earns less than 300% of the area median income, an estimated 95% of Americans according to the federal government, is eligible for scholarships. In 2026, 300% of the annual area median income in the Cincinnati/Northern Kentucky area for a 4-person household is $329,700.
Because donors can designate contributions to specific schools, the program has been touted and criticized as an instrument for “school choice” by allowing public money to fund private education — similar to school voucher programs in other states funded at the state or local level.
Since federal tax credit dollars come from Washington, the additional revenue wouldn’t impact Kentucky’s education funding formula. As of late October, the commonwealth is one of 30 states that have opted into the federal program.
Who will manage this program in Kentucky?
To date, at least 20 different entities have filed as Scholarship Granting Organizations in Kentucky, according to open records obtained by LINK nky.
One of those entities is the Kentucky Education Fund, which describes itself as a “statewide, nonpartisan” option for administering qualifying contributions and scholarships throughout Kentucky. The nonprofit is partnering with Kentucky’s Area Development Districts to help establish the program in all 120 Kentucky counties.
However, schools must still sign agreements with the Kentucky Education Fund or another SGO to receive contributions.
Bellevue Independent Schools and Ludlow Independent Schools are the first two of 13 public districts in Northern Kentucky to opt into the federal program by signing agreements with the Kentucky Education Fund last month.
As of Oct. 28, 41 Kentucky public districts and three private schools have signed agreements with the Kentucky Education Fund according to Will Hodges, an adviser and spokesperson for the Kentucky Education Fund. He said the nonprofit anticipates 100 agreements with partners across the state by Jan. 1, 2027, when SGOs can officially begin receiving contributions.
“If they just flat out don’t participate … it’s almost impossible for them to benefit from any contributions that come their way,” Hodges said.
What does this mean for NKY’s public schools?
Though a couple of Northern Kentucky public districts have signed on to work with the Kentucky Education Foundation, superintendents are awaiting further guidance on what this means for public schools.
Unlike Catholic or other private schools, costs eligible for scholarships like tuition are less defined for public schools, though there is out-of-district tuition for some public districts.
During an Oct. 28 Newport Board of Education meeting, Kentucky Education Fund representative Rob Stafford presented the nonprofit’s understanding of eligible uses of scholarship money according to federal guidelines released on Oct. 1. Stafford said the nonprofit and its partners are still awaiting clarifying details about what uses will ultimately be allowed.
Stafford discussed costs potentially eligible for scholarships as of Oct. 1 guidelines including:
- Out-of-district tuition
- Books, supplies and other gear
- Academic tutoring
- Summer programs
- Field trips
- Special needs services
- Computers for students
Stafford said it’s unclear under the Oct. 1 guidelines whether athletic fees would qualify. Hodges told LINK nky he’s interested in whether public schools could use the funding to cover the cost of dual credit courses.
“This is some good news for Newport and the state of Kentucky,” Newport Board of Education Chair Ramona Malone said. She encouraged the board to prepare for a decision at a future meeting about whether to participate.
Ludlow Superintendent Jason Steffen said the district signed an agreement with the Kentucky Education Fund to ensure it was prepared for the program’s January 2027 rollout.
“We didn’t want to be flat-footed come Jan. 1, and not be ready for our kids,” Steffen said.
He said the Kentucky Education Fund won’t be the only SGO the district partners with, calling the nonprofit a “good first option.”
Steffen said he’s waiting on the updated guidelines for certainty about which expenses will qualify for scholarships and wants the district to have say over which expenses scholarship money should be used for.
The Kentucky Education Fund will establish an application and eligibility verification portal that its partners can help customize, according to Stafford.
“You will make decisions and customize it as to what students can apply for. We can customize the system to serve your needs,” he said.
Though partnering schools or groups could provide “recommendations” for awarding scholarships, the Kentucky Education Foundation would have final say over distributing money to applicants, according to Bellevue and Ludlow’s agreements with the nonprofit.
Fort Thomas Superintendent Brian Robinson said he’s still gathering information on the program.
“There still needs to be an internal conversation in Fort Thomas, because what are the qualifying costs that would even be appropriate?” Robinson said.
But before he would assemble an internal group to have that conversation, Robinson said he must decide whether to recommend the board enter an agreement with the Kentucky Education Foundation.
Robinson said it’s too early to know whether critics’ concerns over the program’s potential to increase economic disparities will hold up.
“I think it’s too early for me to even know if it has legs … And I can see some scenarios where that would start to play out,” Robinson said.
What does this mean for NKYs Catholic schools?
Earlier this month, the Diocese of Covington announced it selected a national partner SGO to administer contributions for its 38 schools through the new program, rather than the Kentucky Education Foundation.
The American GOAL Scholarship Program is part of a broader Georgia-based organization that has facilitated donations through the state’s own tax credit program to fund education.
American GOAL is also partnering with Villa Madonna Academy and Notre Dame Academy, though they are governed differently than the other Diocesan schools.
“I know it’s a political talking point, but that basically opens up school choice for the state of Kentucky that we haven’t had before,” Diocese Superintendent Kendra McGuire said.
McGuire said the program will ultimately make attending Catholic school more affordable for families, beyond the financial aid Diocese schools are currently able to offer.
“We’re always very limited in how much money we have to be able to give,” she said.
What does this mean for NKY homeschoolers and other educational programs?
Hodges said he’s less clear on how scholarships will work for homeschools and other educational groups that aren’t K-12 schools but provide K-12 educational opportunities, like summer programs.
Right now the Kentucky Education Fund has agreements with two “other educational groups,” including one with the Governor’s School For Entrepreneurs, a Lexington-based summer program for high school students.
Though the Kentucky Education Fund has signed an agreement with that entity, Hodges said he is waiting on final guidance from the federal government as to whether that partner will actually qualify for scholarships through the federal tax credit program.
Hodges said the Kentucky Education Fund has not yet signed any agreements with homeschools, though they have started conversations with that community.
“In Kentucky, homeschools are considered schools, so they are going to qualify,” he said.
He’s considered options for creating a statewide organization for homeschools that can then partner with an SGO like the Kentucky Education Fund to provide scholarships for children.
“We’re still exploring like everyone else,” he said.
Find an example of Ludlow Independent School District’s agreement with the Kentucky Education Foundation below. The district voted to execute the agreement at its Oct. 15 meeting.
