Tax credit scholarships misuse state funds – Part 1

Private school

Private schools are becoming increasingly popular with parents who mistrust the public schol system. Image: dreamsjung/Flickr/CC BT-SA

In recent decades, America has seen the rise in the popularity of educational alternatives like home schooling and private schools. Some private schools even receive public funding for scholarships to give students from less fortunate families a chance at a private school education. However, much of that money, according to the New York Times, is being used to discount the tuition of existing students instead.

‘Concern about the educational experience’

Some see this rise as a sign of growing mistrust of the U.S. educational system. State Representative Earl Ehrhart (R), who co-penned the Georgia scholarship bill, said of rising private school enrollments:

“It’s spreading. It’s clearly a reaction to parents’ concern about the educational experiences of their kids.”

State Tax credit scholarships programs

Georgia, Arizona, Pennsylvania, Florida and  other states have approved such programs to allow children who would otherwise not have an opportunity to do so to get a private education. Several more states, such as New Jersey, are considering similar programs.

Georgia’s program, passed in 2008, offers dollar-for-dollar tax credits of up to $2,500 for Georgians who donate to the scholarship program. In that way, public funds are being channeled into private schools.

Where are the new students?

But is that money being used for scholarships? Enrollment numbers don’t reflect it. A report by the Southern Education Foundation found that enrollment in schools covered by the Georgia scholarship program grew only by 0.3 percent between 2007 and 2009 — before and after the program was implemented. However, private schools in regions not covered in the program saw increases of 1.3 percent.

According to the New York Times piece, Wyatt Bozeman, an administrator at the Gwinnett Christian Academy in Snellville, Ga., told an informal gathering of families:

“A very small percentage of that money will be set aside for a needs-based scholarship fund. The rest of the money will be channeled to the family that raised it.”

At the same meeting, a circular was passed around, telling parents how to work the system by donating to the fund, and then applying for a tax credit as well as a scholarship in their child’s name. The children of some of the parents gathered were already enrolled in the school.

‘Attending’ vs. ‘enrolled’

Another loophole be exploited by some parents, according to the Southern Education Foundation, is the use of the word “enrolled” instead of “attending” in the language of the bill. These less-than-scrupulous parents are enrolling their children into public school to qualify for scholarships, while they are actually attending classes in the private school.

What lessons are these parents teaching their children?


Daily Finance 
New York Times 
Southern Education Foundation 

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