Nineteen-year-old Jorge Perez will attend Columbia University this fall to study philosophy and economics—something his single mother, Sophia Flores, never dreamed for her son. But when Sophia discovered Florida’s tuition tax credit scholarship program in 2003, the doors of opportunity opened for Jorge.
Sophia was able to use Jorge’s tax credit scholarship toward tuition at Academy Prep Center of Tampa. Jorge left the academy as eighth-grade valedictorian, earning an academic scholarship to attend an elite boarding school in New Hampshire, where he completed his studies last spring.
Florida’s tuition tax credit scholarship is just one of 17 tax credit programs in 14 states around the country. As of 2013, nearly 200,000 students were benefitting from this form of school choice—making tax credits the largest form of school choice in the country.
The K–12 education tax credit scholarship is unique because its funding is made up of private contributions to nonprofits that provide scholarships.
Education tax credits take two forms: donation tax credit scholarships and personal-use tax credits.
With tax credit scholarships, businesses or individuals who donate to nonprofit scholarship granting organizations can receive tax credits for their contributions. Some state tax credit options allow for a dollar-for-dollar tax credit up to 100 percent of the business or individual’s state income tax liability.
The ultimate beneficiary, however, is the student. Most tuition tax credit scholarships are geared toward assisting children from low-income families by empowering parents to send their children to private schools of choice.
Personal-use tax credits, on the other hand, enable families to receive tax relief for their own children’s education-related expenses, such as private school tuition.
According to Education Next’s 2014 opinion poll, 60 percent of the public supports tax credit scholarships. This is the highest public support of any school choice measure.
Tuition tax credits can be constructed to reduce costs to taxpayers while also increasing educational opportunity for children. Education analysts Ken Ardon and Jason Bedrick further explain in their report Giving Kids Credit: Using Scholarship Tax Credits to Increase Educational Opportunity in Massachusetts:
The overwhelming consensus of high-quality research is that educational choice programs increase student achievement, graduation rates, and college matriculation, and parents of students in such programs report very high levels of satisfaction with their chosen schools. Educational choice also benefits students who remain in the public schools because of increased competition.… A scholarship tax credit program would help provide low-income families with a level of opportunity that is more like their higher-income peers who already have a plethora of educational options. Low-income families often have no choice but their assigned public school. A scholarship tax credit program would allow these families to choose the school that best meets the individual needs of their children.
Tuition tax credit scholarships create school choice options that empower families while decreasing the size and scope of government in education.