Federal scholarships as a catalyst for improved ACT outcomes

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.

An estimated 82 percent of North Dakota high school graduates took the ACT in 2025, averaging a 19.4 for their composite score. This is a slight decline from the class of 2024’s average composite score of 19.6.

Half of the tested 2025 graduates met the English college readiness benchmark, but just under one-third met the math (32 percent) and science (31 percent) benchmarks, and just under two-fifths (38 percent) met the reading benchmark. The percentage of tested students meeting three or four of the benchmarks was also less than one-third (30 percent). Perhaps more concerning is that 41 percent of tested students met zero of the benchmarks.

According to ACT, students who meet the college readiness benchmarks “have a roughly 50 [percent] chance of earning a B or better in the corresponding first-year college courses and a roughly 75 [percent] chance of earning a C or better.”

ACT data from prior graduating classes shows that 84 [percent] of students who have met all four benchmarks graduate with postsecondary degrees within six years. Only 38 [percent] of students who meet zero benchmarks and 56 [percent] of students meeting one benchmark graduate in that time.

If Gov. Kelly Armstrong approves the state’s participation in the federal tax-credit scholarship program, struggling students would have an opportunity to access tutoring and test preparation 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.