Study Finds Continued Growth in Education Tax-Credit Scholarship Programs

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

BOSTON – Education tax credits grew increasingly popular in 2021, with four more states enacting programs.  There are now 28 tax-credit scholarship (TCS) programs in 23 states, and they serve more than 325,000 students, according to a new study published by Pioneer Institute.

Under the programs, individual and corporate taxpayers receive tax credits for contributions to scholarship-granting organizations (SGOs) that fund students attending schools other than their assigned district school.  The SGOs are non-profits registered under the state TCS program.

“Policymakers should craft TCS programs to maximize the number of families who can benefit from the scholarships, and maximize the freedom and flexibility of SGOs to serve those families,” said Jason Bedrick, author of “Earning Full Credit: A Toolkit for Designing Tax-Credit Scholarship Policies (2022 Edition).”  The study is an update of the toolkit published in December 2020.

Tax-credit scholarships are the most common private-school choice program.  Arkansas, Kentucky, Missouri and Ohio enacted TCS programs in 2021.

The earlier study showed that the programs are popular among parents and taxpayers.  In a 2018 survey of more than 14,000 scholarship families in Florida, 92 percent expressed satisfaction with the program and about 90 percent were satisfied with the school their child attended using a scholarship.  According to the 2021 Education Next survey, 56 percent of Americans support TCS policies.  Support is even higher among parents (58 percent) and Americans who are Black (64 percent) and Hispanic (66 percent).  According to EdChoice’s 2021 “Schooling in America” survey, 70 percent of the general public supported TCS policies.

Programs can be revenue neutral or even produce savings for the state if the value of tax credits is less than the money saved in school districts that no longer educate students taking advantage of tax-credit scholarships.

Bedrick makes a number of recommendations for policymakers crafting TCS programs.  He urges states to make all children eligible for the scholarships but to prioritize those who are most in need.  Around two-thirds of current programs impose income-based eligibility restrictions.

Tax credits should be as close to 100 percent as possible to encourage taxpayers to contribute.  Credits currently range from 50 to 100 percent.  Sixteen of the 28 programs offer a 100 percent credit and another eight offer 75-to-97 percent credits.

Policymakers should aim to cap credits at a level that is sufficient to provide scholarships to all families who want one.  TCS policies should include “escalator clauses” that automatically raise caps over time to keep up with demand.

The scholarships themselves should be as close as possible to the state portion of per-pupil spending in K-12 public schools and should be eligible to be used for related expenses such as tutoring, online courses and educational therapy.

States should respect the ability of SGOs to set their own mission.  Some provide scholarships for students to attend religious schools, others focus on a particular pedagogical approach such as Montessori schools, while still others focus on a geographical area.

To properly balance school autonomy accountability, Bedrick urges policymakers not to require scholarship students to take a specified standardized test.  Instead, schools should choose from among many norm-referenced tests.  This would give parents information about their children’s progress without unduly restricting how schools operate.

About the Author

Jason Bedrick is director of policy for EdChoice. Previously, Bedrick served as policy analyst with the Cato Institute’s Center for Educational Freedom. He also served as a legislator in the New Hampshire House of Representatives and was an education policy research fellow at the Josiah Bartlett Center for Public Policy. Bedrick received his master’s degree in public policy from the John F. Kennedy School of Government at Harvard University, where he was a fellow at the Taubman Center for State and Local Government.

About Pioneer

Pioneer’s mission is to develop and communicate dynamic ideas that advance prosperity and a vibrant civic life in Massachusetts and beyond. Pioneer’s vision of success is a state and nation where our people can prosper and our society thrive because we enjoy world-class options in education, healthcare, transportation and economic opportunity, and where our government is limited, accountable and transparent. Pioneer values an America where our citizenry is well-educated and willing to test our beliefs based on facts and the free exchange of ideas, and committed to liberty, personal responsibility, and free enterprise.

Get Updates on Our School Choice Research

Related Content

Blended Learning Expert Heather Staker on Student-Centered Lessons During COVID-19

This week on “The Learning Curve," Gerard and Cara talk with Heather Staker, founder and president of Ready to Blend. They discuss her work with the late Harvard Professor Clayton Christensen and Michael Horn on disruptive innovation and schooling, as well as her book, Blended: Using Disruptive Innovation to Improve Schools, and her recent publication, Developing a student-centered workforce through micro-credentials. 

Heritage Foundation’s Jonathan Butcher on Edu Federalism, School Choice, Learning Pods

This week on “The Learning Curve," Gerard and Cara talk with Jonathan Butcher, the Will Skillman Fellow in Education at The Heritage Foundation. They discuss the growing popularity of learning pods, an education innovation propelled by K-12 public education’s failure to meet the COVID-19 moment. With as many as three million children enrolled in learning pods, 35 percent of parents participating in them, and another 18 percent interested in joining one, Butcher shares findings from his report on the role of pods in expanding parent-driven educational choice options.

The Washington Post’s Jay Mathews on An Optimist’s Guide to American Public Education

This week on “The Learning Curve," Gerard and Cara talk with Jay Mathews, an education columnist for The Washington Post and author of the recent book, An Optimist's Guide to American Public Education. Jay describes the three key trends in K-12 schooling that he views as cause for hope.

Study: Systemic Failure in IDEA Implementation for Private School Students with Disabilities in Additional States

On the heels of a $3.8 million settlement for private school students with disabilities in Massachusetts for the state’s failure to comply with provisions of the federal Individuals with Disabilities Education Act (IDEA) that require provision of equitable, publicly funded special education services to students in private schools, a Pioneer Institute study finds that two states and three school districts around the country for which data are available also appear to be out of compliance.

Dartmouth’s Prof. Susannah Heschel Discusses Rabbi Abraham Joshua Heschel & the Civil Rights Movement

This week on “The Learning Curve," Gerard and Cara talk with Dr. Susannah Heschel, the Eli M. Black Distinguished Professor of Jewish Studies at Dartmouth College, and the daughter of noted 20th-century Jewish theologian and Civil Rights-era leader, Rabbi Abraham Joshua Heschel. They discuss what teachers and students today should know about Rabbi Heschel’s life and legacy.

Best-Selling, Netflix Author Loung Ung On Surviving Pol Pot’s Killing Fields

/
This week on “The Learning Curve," Gerard and Cara talk with Loung Ung, a human-rights activist; the author of the bestselling books First They Killed My Father: A Daughter of Cambodia Remembers, Lucky Child, and Lulu in the Sky; and a co-screenwriter of the 2017 Netflix Original Movie, First They Killed My Father. Ms. Ung shares her experiences living through genocide under Pol Pot and the Khmer Rouge from 1975 to 1979, which resulted in the deaths of nearly a quarter of Cambodia's population. 

American Federation for Children’s Tommy Schultz on School Choice & Edu Federalism

/
This week on “The Learning Curve," Gerard and Cara talk with Tommy Schultz, CEO-elect of the American Federation for Children (AFC). They discuss how COVID-19 school closures have increased the interest in alternatives to public schools, and what AFC's polling shows on shifts in attitudes toward school choice options in both urban and rural communities.

Key Madison Park Program Lags Other State Voc-Techs, but Shows Signs of Improvement

The co-operative education program at Boston’s Madison Park Technical Vocational High School, which places students in paid positions with local employers, lags far behind other Massachusetts vocational-technical schools in terms of both placements and number of employer contacts.  But with the school as a whole beginning to improve after years of turmoil, the co-op is also showing promising signs, according to a new study published by Pioneer Institute.

UGA Prof. Valerie Boyd on Zora Neale Hurston, the Harlem Renaissance, & Black History Month

/
This week on “The Learning Curve," Cara and Gerard celebrate Black History Month with Professor Valerie Boyd, the Charlayne Hunter-Gault Distinguished Writer in Residence and Associate Professor of Journalism at the University of Georgia, and the definitive biographer of Zora Neale Hurston. Boyd discusses why Hurston is such an important novelist and cultural figure, and the influence of Hurston’s 1937 classic novel, Their Eyes Were Watching God, on American literature.

Boston Catholic Schools Supt. Tom Carroll on National Catholic Schools Week

/
This week on “The Learning Curve," Cara and Gerard celebrate National Catholic Schools Week with Tom Carroll, superintendent of schools for the Archdiocese of Boston. He shares his view of the value that Catholic schools add; the reasons for their success at improving student outcomes and creating a sense of community; and their commitment to serving children from underprivileged backgrounds, regardless of religious affiliation.