Student Funding

Use of Funds 

Qualifying expenses include tuition and fees including textbooks, workbooks, and supplies used solely for school-related work.   

Funding Amount and Source 

The total scholarship funding for students without special needs cannot exceed the actual education expenses of the student or 100% of the per-pupil amount distributed to the local public school by the state, whichever is less. Students may receive more than one scholarship from scholarship foundations. Students with special needs may be funded with scholarships that cover actual education expenses up to 300% of the commonwealth’s per-pupil amount if they attend specially licensed schools specifically for students with special needs. Otherwise, special needs students receive up to 100% of the per-pupil amount. The cap on scholarship values is pegged to the state’s average per-pupil allocation to district schools. Tax credits are worth only 65% of the value of the contributions to scholarship organizations. Total credits claimed cannot exceed $25 million, meaning roughly 8,500 students can participate, or less than 1% of Virginia’s K–12 student population  

(Last updated July 3, 2024)

Student Eligibility

Students must come from households where family income is less than 300% of the Federal Poverty Level (FPL) ($93,600 for a family of four in 2024–2025). Students with special needs also are eligible and have an income limitation of 400% of the Federal Poverty Level ($124,800 for a family of four in 2024–2025). Students must either: (1) be enrollees in kindergarten or first grade, or (2) be a public school student the previous school year, a previous scholarship recipient, or a new resident of Virginia. Pre-kindergartners are also eligible if they are deemed an at-risk 4-year-old unable to obtain public early childhood services and meet the income requirements. 

(Last updated July 22, 2024) 

EdChoice Expert Feedback

Virginia’s tax-credit scholarship program helps thousands of students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity. Eligibility for the scholarships is limited to students from families earning up to 300 percent of the federal poverty line or students with special needs. More than 40 percent of Virginia students are eligible for a scholarship and less than 1 percent of students statewide actually use a scholarship. The average scholarship size is about $2,918, which is about 23 percent of the average expenditure per student at Virginia’s district schools, though the cap on scholarship values is pegged to the state’s average per-pupil allocation to district schools (or 300% for students with special needs). Tax credits are worth only 65 percent of the value of the contributions to scholarship organizations and only $25 million in tax credits are available annually, which is equivalent to less than 1 percent of Virginia’s total K-12 revenue. To expand access to educational choice, Virginia policymakers should dramatically increase the available tax credits, raise the credit value to make it easier for scholarship organizations to raise funds, and expand eligibility to all students (prioritizing scholarships based on need). The program could also be converted into an education savings account to ensure that all students have access to the education that’s the right fit for them, whether private school or a customized course of education. Virginia’s scholarship program generally avoids unnecessary and counterproductive regulations. (Last updated December 14, 2023) 

Rules and Regulations

Program Guidelines

• Income Limit: 300% x FPL (400% for students with special needs)
• Prior Year Public School Requirement: Yes, with exceptions
• Enrollment Cap: None
• Scholarship Cap: 100% of per-pupil state funding or actual expenses, whichever is lower / 300% of per-pupil state funding for students with special needs
• Testing Mandates: Nationally norm-referenced tests
• Credit Value: 65%
• Per Donor Credit Cap: $125,000 (Individual) / None (Business)
• Total Tax Credit Cap: $25 million
• Special Needs Pathway: Priority

Participant and Family Guidelines

• Click Here for the Program Administrator’s Parent Handbook
• Education Requirements: N/A
• Parent Supplemented Funds/Scholarships: Allowed
• Miscellaneous: N/A

Education Provider Guidelines

• Accreditation/Approval: State or regional
• Employment Standards: N/A
• Nondiscrimination: Federal
• Calendar/Curriculum/Attendance: N/A
• Financial: N/A
• Miscellaneous: N/A

Scholarship Organization Guidelines

• Scholarship to Contribution Ratio: Use at least 90% of contributions for scholarships
• State Reporting:
  • Be approved by the state
  • Submit to the state:
    • Total number and dollar amount of contributions received
    • Dates when such contributions were received
    • Total number and dollar amount of scholarships awarded
• Financial: CPA Audit
• Award Priority: Renewing students
• Miscellaneous:
  • Make scholarships available for more than one school
  • Comply with Title VI of the Civil Rights Act of 1964
  • Conduct an annual audit, review or compilation on tax credit-derived funds performed by an independent certified public accountant

(Last updated September 27, 2024)

Governing Statutes

Va Code. §§ 58.1-439.25-28 

(Last updated February 22, 2023) 

Legal History

No legal challenges have been filed against the program.

(Last updated September 27, 2024)