The Pennsylvania Department of Community and Economic Development issued new guidelines regarding the Opportunity Scholarship Tax Credit (OSTC) program. Businesses can begin applying for tax credits on August 8.
Information for parents and students is now available as well, though there are not yet any Opportunity Scholarship Organizations established and funded to provide scholarships.
The OSTC would allow businesses to contribute up to $400,000 to organizations that provide scholarships to students residing in the attendance boundaries of the lowest performing 15 percent of public schools. Families can receive scholarships of up to $8,500 for traditional students and $15,000 for special needs students, up to the actual cost of tuition at a school of choice.
The OSTC is capped at $50 million. This credit is on top of the Educational Improvement Tax Credit, which was expanded to $100 million this year, and all credits for 2012-13 have already been claimed.
How much would the average opportunity scholarship be?
- Donating businesses and scholarship organizations will determine how much scholarships should be to serve the most students and use dollars efficiently.
- The average scholarship amount would likely fall between the current $1,100 average for EITC scholarships and the maximum scholarship amount of $8,500 for traditional students. For reference, the average tuition of Catholic schools, the largest segment of private schools, was $3,500 for elementary and $6,500 for high school in 2011-12.
How many students will be served with tax credit scholarships?
- In 2010-11, more than 40,000 students received EITC scholarships (the cap was higher in 2011-12). If the average scholarship amount remains the same, approximately 60,000 students will receive EITC scholarships in 2012-13.
- Depending on the average OSTC scholarship amount, between 6,000 (average scholarship of $8,500) and 46,000 additional students (average scholarship of $1,100) could receive opportunity scholarships.
- Most likely, between 70,000 and 100,000 students will receive tax credit scholarships in Pennsylvania in 2012-13—upwards of one out of every 20 K-12 students in the state.
- All total, nearly one in five students in Pennsylvania attended a school of choice last year (including charter schools, private schools, and home schools).
For more information on opportunity scholarships and the EITC, check out our Policy Memo on Pennsylvania’s school choice expansion.