By Nathan Benefield
Pennsylvania’s new state budget includes a historic $125 million expansion of two successful scholarship programs—the Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC). This expansion will provide 31,000 more students with scholarships to the academic environment that best fits their needs.
These vital programs are a drop in the overall $44 billion 2022–23 state budget—which included an additional $1.6 billion in public school funding.
Tax credit scholarship programs have a long track record of success. The EITC engages the business community in education, as businesses donate to scholarship organizations, providing educational opportunity to low- and moderate-income students.
As a result, more than 200 scholarship organizations have awarded 767,000 scholarships since the program’s inception in 2001, with an average scholarship amount of $2,200. They represent a tiny fraction of the nearly $20,000 per student spent by school districts, which, despite massive funding increases, have lost students and seen performance drop.
Because of this disparity, tax credit scholarships have saved taxpayers more than $4 billion in averted costs. And an economic impact analysis found scholarship expansion in Pennsylvania would generate billions of dollars from increased lifetime earnings and reduced criminal justice costs.
Despite the popularity and success of these programs, public school unions and the special-interest groups in Harrisburg that unions subsidize have attacked the programs. Their complaint: Gov. Tom Wolf’s Department of Community and Economic Development doesn’t collect personal data of students receiving scholarships.
Ultimately, accountability comes from parental control over their child’s education. Nonetheless, evidence demonstrates that scholarship programs provide students with more opportunity and better educational outcomes.
Consider Children’s Scholarship Fund Philadelphia (CSFP), which provides more than 5,000 scholarships annually. Because of scholarship funding limits, CSFP has far more applications than available scholarships and awards scholarships through a lottery system.
CSFP serves primarily low-income students, with an average family income of $40,000, and 77 percent of students come from low-performing public-school areas. Despite these challenges, 98 percent of CSFP scholarship recipients graduate high school on time, with test score results and college attendance rates that far exceed those in the Philadelphia school district.
These incredible results happen across Pennsylvania. Neighborhood Academy in Pittsburgh faces similar challenges—70 percent of students have family incomes of less than $30,000, and 84 percent would otherwise be in low-achieving public schools. Yet Neighborhood Academy has a 75 percent graduation rate, and 57 percent of students exceed grade level in math.
In York, one of the worst performing school districts in Pennsylvania, 54 percent of the students attending Logos Academy come from families in poverty and another 21 percent from struggling middle-class families. Yet while charging the average family less than $2,000 in tuition after financial aid, more than 60 percent of Logos students exceed the national average in reading and math.
No wonder polling shows that 46 percent of parents would choose private schools if money weren’t an obstacle.
Expanding educational opportunity helps families overcome the challenges of poverty and academic segregation. But a student’s future shouldn’t be determined by a lottery.
Despite the incredible expansion of the tax credit scholarship program, more needs to be done. More than 75,000 scholarship applications were turned away last year, and the increased tax credit scholarship funds aren’t enough to end the waiting list.
One solution to this unmet need is the Lifeline Scholarship Program to offer an educational opportunity account (EOA) to students in the 15 percent lowest-performing district schools. This legislation passed the Pennsylvania House in April, and it has broad support: A whopping 84 percent of voters support creating EOAs for students.
Similar EOAs are available in ten states—including Arizona, which just passed a universal program open to all students in the state, and neighboring West Virginia, which passed the Hope Scholarship program last year.
By expanding EITC and OSTC, despite Wolf’s resistance, lawmakers have given educational opportunity to thousands more students. Pennsylvania’s next governor should build on this success to make Pennsylvania a leader in empowering parents.
Nathan Benefield is Senior Vice President of the Commonwealth Foundation, Pennsylvania’s free-market think tank.