The YAF began a scholarship program in 2002 to provide funds for impoverished children to attend school. Most of the children can pay the small fees required for elementary school (grade 1 to 6), but costs for junior high school (grade 7 to 9) and senior high school (grade 10 to 12) are far more substantial. The junior high and senior high students must leave their village and live on the school campus. They are required to pay for tuition, books, school supplies, food, firewood for cooking and transportation. These costs are beyond the means of almost all the families served by the YAF. No student from Lula Village had ever attended even junior high school prior to the YAF Scholarship program.

　　The YAF Scholarship Program for junior high school and senior high school provides $125US per year for 3 years for a total cost of $375US. This is almost enough money to pay for the school expenses. The families of the students must contribute some funds too. This is a big sacrifice for them as the average family income in the poorest areas is less than $75US per year and the household also looses needed labor provided by the children. The most affluent communities served by YAF have average family incomes of $240US per year. The YAF also sponsors some students beyond high school. These scholarships are much more expensive and therefore are provided sparingly due to the limited funds available.

　　The Chinese Board of Directors makes all the decisions regarding the scholarship awards. Teacher evaluation, family attitude, poverty level and community support are all factors considered in choosing scholarship candidates. Each scholar and their guardians must sign a contact agreeing to spend the funds on the education of the student and not dissuade them from study by overworking them. The YAF visits each prospective scholar and family prior to awarding the scholarships.

　The scholarship money is paid in person at the beginning of each semester. Each student and family is visited by YAF at that time to provide support and assure that the student is making progress and the family is helpful. The YAF also maintains regular correspondence with the student to provide sense of caring. These students have high expectations from their families and themselves which often adds stress to an already difficult situation. The YAF believes that the social contact, hope and encouragement provided are as important as the funding.
In 2005 the YAF maintains 41 scholarships, 25 girls and 16 boys covering many ethnic minorities including Yi, Hani, Dai, Bulang, Lisu and Tibetan people. Four of the scholarships are for University education.