$23 million in Pennsylvania K-12 Scholarships Going to Waste

Published March 31, 2014

One-hundred and seventy schools in Philadelphia are chronically failing, yet Pennsylvania students currently cannot access $22.8 million in potential scholarships for better schools.

That’s how much money businesses have yet to donate before the state’s new tax-credit scholarship program reaches its cap this year. The program gives businesses tax credits worth up to 90 percent of their donations to nonprofits that give K-12 scholarships. The Opportunity Scholarship Tax Credit (OSTC), now in its second year, is still gaining exposure. Last year, $33 million in credits went unused.

“Parents deeply want this choice, and we need to help magnify the voices of so many parents whose children are trapped in failing schools,” said Casey Carter, CEO of Faith in the Future, a charity that raises money to help kids afford Catholic schools.

An education campaign to link scholarship organizations and businesses is underway, but it still has a lot of work to do.

Slow on the Uptake
“[One] factor why the money hasn’t been used rapidly and depleted is because Pennsylvania has one of the best school choice programs in the country,” said Alberta Wilson, founder and CEO of Faith First Educational Assistance Corporation.

OSTC is a new companion to the state’s popular Educational Improvement Tax Credit (EITC) program. It directs scholarships specifically to children living in failing school districts.

Because OSTC passed in midsummer 2012, it had little time to get up and running for the 2012-13 school year, said Priya Abraham, a senior policy analyst at the Commonwealth Foundation for Public Policy Alternatives.

EITC had a similarly slow start but proved extremely popular over time, Abraham said.

Also, some businesses may have maxed out tax credits through EITC and so can’t qualify for OSTC, or may still be learning about OSTC, Wilson said.

Thousands Exercise Choice
“With the expansion of the IETC and this new program, there are 17,000 kids on scholarships now who are going to their school of choice, so overall it’s been quite a success,” she said.

Crystal Williams has three children who attend The Christian Academy through tax credit scholarships. She learned of the scholarships through a parent engagement meeting Wilson organized. Williams said the application process was lengthy but not complicated. Her kids could never have attended their school without financial assistance, she said.

“My children all function well above grade level, and it has helped them to grow socially,” she said. “They also have opportunities to perform community service. I have found our school to be a warm, caring, and nurturing environment where my children are able to focus on learning instead of surviving in school.”

‘Public Education Crisis’
Wilson organized Operation Philadelphia Public Education Crisis Solution Expo to free up those unused millions. The first such expo was Feb. 27 at the University of Pennsylvania and included national, state, and city leaders.

“We are forming a coalition of very diverse groups who see, who recognize, the very real need for groups representing different constituents to get together and get the word out that this is new net money and we need to … solve the education problem in Philadelphia,” Carter said.

The Philadelphia school district has been plagued with financial and academic woes for at least a decade, and in the past year it had to lay off thousands of workers just to make payroll.

Of the 406 failing schools in Pennsylvania, 177 are in Philadelphia. More than 80 percent of Philadelphia fourth and eighth graders are not proficient in math and reading, according to the National Assessment of Educational Progress. That’s why the first expo was in Philadelphia, Wilson said.

Because children on tax-credit scholarships get a better education for less money, the program improves Philadelphia’s finances, Carter noted.

“Getting this money deployed …to send children to schools of choice is good for the Philadelphia school district, to give them the one to three years they need in order for the turnaround effort to take effect,” he said.

Coalition partners met again on March 27 to discuss May’s expo.

“We don’t want to see that money go back to the Commonwealth unused again,” Wilson said.