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New Study: Most Tax Credit Scholarship Recipient Families Earn Below the Median Income
Harrisburg, PA, September 17 – Tax credit scholarships had a significant benefit for low-to-middle-income students in Pennsylvania, according to a new study from the Commonwealth Foundation.
The study includes new data about more than 33,000 Pennsylvania students who receive K-12 scholarships through the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC). The report shows that low-to-middle-income students benefitted the most from these policies.
During the 2021-22 school year, more than 77,000 children were awarded scholarships in Pennsylvania, representing every county. According to the study, “most families receiving tax credit scholarships earn below the median income level for their respective counties, and the counties with the most low-achieving public schools have the highest number of scholarship recipients.”
The household annual incomes for scholarship families across the state averages between $40,000 and $73,000, by program.
“This landmark study reveals how important these scholarships are for Pennsylvania’s kids,” said Rachel Langan, senior education policy analyst at the Commonwealth Foundation and the report’s author. “Tax credit scholarships provide thousands of low-income students access to high-quality schools of their choice.”
These scholarships are also improving academic outcomes. According to the study, tax credit scholarship beneficiaries routinely outperform their peers, all while graduating at higher rates than their public school counterparts.
“This report demonstrates high demand and significant results,” said Nathan Benefield, senior vice president for Commonwealth Foundation. “If the past is any indication, demand for tax credit scholarships will continue to rise, showing the remarkable success of the program and the desire of parents to find the best educational option for their children.”
In 2021–22, K-12 students submitted 141,452 scholarship applications—2,914 more than the previous year and the highest on record. During the same period, Pennsylvania scholarship organizations turned away 63,781 K-12 student scholarship applications—almost 45 percent of applications—because of tax credit caps.
Additional Report Findings:
- The majority of private schools serving scholarship students have tuition of less than $10,000 per year.
- Qualifying students received an average scholarship value of $2,780.
- One out of two students who receive an Educational Improvement Tax Credit (EITC) scholarship in the Philadelphia region identify as a person of color.
- According to projections, over 100,000 low- to middle-income students across the state will benefit from EITC scholarships in 2024.
Read the full study here.
ABOUT PENNSYLVANIA’S TAX CREDIT SCHOLARSHIP PROGRAMS
Pennsylvania’s Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) are state tax credit programs that give thousands of low- to middle-income students access to high-quality schools of their choice. Students can apply for scholarships through local scholarship organizations in the fall for the following school year.
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The Commonwealth Foundation turns free-market ideas into public policies, fostering prosperity for all Pennsylvanians.