Is Florida PEP free, and who pays for it?

• No application fee. Florida law says a scholarship-funding organization “may not charge an application fee.”
• No income cutoff. Step Up’s PEP page says the program is “Open to all families, regardless of household income.”
• Income sets the order, not the eligibility. After renewal students, new applications from lower-income households are funded first.
• Who pays: corporate donations to Step Up that earn Florida tax credits. The Legislature sets the scholarship amounts.
• Not unlimited: the scholarship covers eligible expenses up to the student’s amount. Anything above that is the parent’s cost.

Applying shouldn’t cost anything. In the section listing the obligations of scholarship-funding organizations, Fla. Stat. 1002.395 says an organization “may not charge an application fee.”

Using the scholarship is a little different. Each year a PEP parent signs an agreement and a sworn compliance statement. Under the statute, that includes affirming that the parent “is responsible for all eligible expenses in excess of the amount of the scholarship and for the education of his or her student,” and that the family will not receive a payment, refund, or rebate of any scholarship funds.

In plain terms: PEP money is spent on approved learning expenses up to your student’s amount, through purchases or reimbursements. It isn’t paid to you as cash. For how much a student receives, see how much the Florida PEP scholarship is; for how reimbursements work, see the PEP reimbursement guide.

Not for eligibility. The handbook’s eligibility list covers age, being eligible to enroll in grades K–12 in a Florida public school, and Florida residency (with military exceptions). It doesn’t include an income limit, and Step Up’s PEP page says the program is open to all families regardless of household income.

Income matters for priority, which decides who is funded first. Step Up’s handbook lists this order:

1. Renewal students. A renewal student was funded for Quarter 4 for the same scholarship and didn’t have their scholarship choice confirmation revoked the prior year.
2. New students from households at or below 185% of the Federal Poverty Level, and students in foster care or out-of-home care.
3. New students from households above 185% but not over 400% of the Federal Poverty Level.
4. Everyone else: households above 400%, or applications that don’t give income information, are handled “on a first-come, first-served basis, subject to available funding.”

The statute’s priority list (Fla. Stat. 1002.395(3)) names the first two income groups in the same order. Step Up’s FAQ adds that, by law, it must give priority to eligible renewal students, and that new students waiting their turn show a “Pending Review” status.

Step Up’s handbook prints this chart, based on federal poverty guidelines published in January 2026. The handbook labels the second column Priority 1 (under 185%) and the third Priority 2 (186% to 400%); each figure is the top of that band for the household size.

The handbook continues the chart up to 10 people and adds +$10,508 (Priority 1) and +$22,720 (Priority 2) for each additional member.

To be considered for priority, the handbook says the application must list all income sources for every household member 18 or older, and every household member must be included so household size is right.

Get it right the first time. Step Up’s FAQ says income-priority decisions use the information available when the application was submitted, and that reconsideration and income updates aren’t available for the 2026–27 school year once the application has been reviewed.

Step Up’s handbook answers this directly: “Funding for FTC-PEP Scholarships comes from tax credit funds raised from corporate donors by Step Up For Students.” It adds that “Scholarship funding amounts are determined by the Florida Legislature annually.”

The law behind that is Fla. Stat. 1002.395, the Florida Tax Credit Scholarship Program (PEP is part of it, which is why Step Up calls it FTC-PEP). The statute says its purpose includes letting taxpayers “make private, voluntary contributions to nonprofit scholarship-funding organizations,” and it sets out the state tax credits those taxpayers can receive.

So the money isn’t a direct check from the state to families. Donors give to a scholarship-funding organization, receive state tax credits for it, and the organization puts the money into students’ scholarship accounts in quarterly deposits (see when PEP deposits arrive).

Step Up describes itself in the handbook as “a nonprofit Scholarship Funding Organization (SFO) approved by the state of Florida to administer the FTC-PEP Scholarship program and other education choice programs.” Its site footer lists it as a 501(c)(3) nonprofit.

That makes it a private nonprofit with a role set by state law, not a state agency. The footer of Step Up’s PEP page also notes its charity registration with Florida’s Division of Consumer Services, and adds: “Registration does not imply endorsement, approval, or recommendation by state.”

Step Up isn’t the only organization: its FAQ mentions AAA Scholarship Foundation as another Scholarship Funding Organization, and says PEP funding doesn’t transfer between them. Step Up (or AAA, for its families) decides eligibility and approvals.

We didn’t find a Step Up or Florida answer on whether PEP funds count as taxable income. (Step Up’s FAQ answers that question only for the Transportation Stipend, a different program.) For your own situation, ask a tax professional.