Having worked with SGOs across 12 states over the last decade, we understand that the federal Education Freedom Scholarship Tax Credit represents a transformative opportunity but also brings operational challenges most organizations aren't prepared to handle. Below are the top challenges we see SGOs facing as they prepare for the 2027 launch.

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Challenge 1: Donor Confusion About Federal Tax Credits

Problem: Since it’s a new program, taxpayers are unfamiliar with how federal scholarship tax credits work, creating friction in the donation process.

Solution: Use platforms with built-in donor education and real-time credit calculations. Leverage a white-label portal that can be customized to show contribution limits and increase confidence for donors.

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Challenge 2: Manual Student Verification Creates Bottlenecks

Problem: Manually verifying household income, student eligibility, and documentation creates weeks of delay and a wide margin for error.

Solution: Automate verification workflows using an application and verification system in Student First, or use the FACTS integration if your schools are already signed up. Student First Technologies can reduce processing to automate student verification.

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Challenge 3: Banking Complexity for Non-Financial Organizations

Problem: SGOs aren't banks. Managing segregated accounts for each school or diocese, fund reconciliation, and high-volume transactions are all outside core competency for a Scholarship Granting Organization.

Solution: Choose platforms that provide banking infrastructure as part of the service. Student First Technologies' integrated banking means complex financial infrastructure is handled in the platform while you focus on serving families.

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Challenge 4: Disbursement Delays Frustrate Schools and Families

Problem: Families receive scholarship awards but face long waits for funds to reach their school, causing cash flow issues and dissatisfaction with schools.

Solution: Use systems with direct fund disbursement capabilities. Student First Technologies enables same-day ACH transfers directly to schools, eliminating the multi-week wait typical of manual processes.

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Challenge 5: Scattered Data Makes Reporting Difficult

Problem: Donation data in one system, student data in another, and disbursement records in a third make it nearly impossible to generate comprehensive reports for your bookkeeper, board and Treasury Department.

Solution: Maintain a single source of truth. Student First Technologies' integrated dashboard shows real-time data across donations, students, and disbursements within a single source of truth.

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Challenge 6: Tax Time Panic for Donor Documentation

Problem: Come tax season, donors need documentation for their federal tax credit claims, overwhelming a small SGO team with requests.

Solution: Implement platforms with automated tax reporting. Student First Technologies generates all required tax documents automatically and makes them available to donors through the portal, eliminating manual request processing.