Georgia’s private school scholarships: “Neovouchers”
Many people contend that the private school scholarships approved by the Georgia General Assembly were a back-door voucher and subsidy, that the money would not go to poor students in public schools to move to private schools as promised, but to students already in the private schools.
Reports that parents were making donations to schools that were then repackaged as “scholarships” for their own kids have been made to the Georgia General Assembly, which has ignored multiple reports of abuse and, in fact, enabled even greater abuse of the program.
In the last few years, the General Assembly has adopted a strong anti-public school posture, which remains puzzling given that nine out of 10 Georgia children attend public schools. But these legislators keep getting re-elected, so voters either don’t care or, more likely, don’t know what their lawmakers are doing.
A lengthy new New York Times investigation into these private school scholarships found that it’s no secret that the scholarships are not serving poor children but, instead, as one expert said, are serving as “neovouchers.”
Read full the piece, which is terrific and well documented. Here is an excerpt:
The program would be supported by donations to nonprofit scholarship groups, and Georgians who contributed would receive dollar-for-dollar tax credits, up to $2,500 a couple. The intent was that money otherwise due to the Georgia treasury — about $50 million a year — would be used instead to help needy students escape struggling public schools.
That was the idea, at least. But parents meeting at Gwinnett Christian Academy got a completely different story last year.
“A very small percentage of that money will be set aside for a needs-based scholarship fund,” Wyatt Bozeman, an administrator at the school near Atlanta, said during an informational session. “The rest of the money will be channeled to the family that raised it.”
A handout circulated at the meeting instructed families to donate, qualify for a tax credit and then apply for a scholarship for their own children, many of whom were already attending the school.
“If a student has friends, relatives or even corporations that pay Georgia income tax, all of those people can make a donation to that child’s school,” added an official with a scholarship group working with the school.
The exchange at Gwinnett Christian Academy, a recording of which was obtained by The New York Times, is just one example of how scholarship programs have been twisted to benefit private schools at the expense of the neediest children.
Spreading at a time of deep cutbacks in public schools, the programs are operating in eight states and represent one of the fastest-growing components of the school choice movement. This school year alone, the programs redirected nearly $350 million that would have gone into public budgets to pay for private school scholarships for 129,000 students, according to the Alliance for School Choice, an advocacy organization. Legislators in at least nine other states are considering the programs.
Most of the private schools are religious. Nearly a quarter of the participating schools in Georgia require families to make a profession of religious faith, according to their Web sites. Many of those schools adhere to a fundamentalist brand of Christianity. A commonly used sixth-grade science text retells the creation story contained in Genesis, omitting any other explanation. An economics book used in some high schools holds that the Antichrist — a world ruler predicted in the New Testament — will one day control what is bought and sold.
The programs are insulated from provisions requiring church-state separation because the donations are collected and distributed by the nonprofit scholarship groups. A cottage industry of these groups has sprung up, in some cases collecting hundreds of thousands of dollars in administrative fees, according to tax filings. The groups often work in concert with private schools like Gwinnett Christian Academy to solicit donations and determine who will get the scholarships — in effect limiting school choice for the students themselves. In most states, students who withdraw from the schools cannot take the scholarship money with them.
Public school officials view the tax credits as poorly disguised state subsidies, part of an expanding agenda to shift tax dollars away from traditional public schools. “Our position is that this is a shell game,” said Chris Thomas, general counsel for the Arizona School Boards Association.
After Georgia’s scholarship program was adopted, parents of children in private schools began flooding public school offices to officially “enroll” their children. Their plan was to fill out the paperwork even though they had no intention of ever sending their children to public schools. According to the way the law was interpreted, the enrollments would make them eligible for scholarships. Some public schools balked.
“I recently contacted you about having some trouble enrolling/registering my child in a public school while he is going to a private school,” one parent wrote to a scholarship organization last year in an e-mail obtained by The Times. “A principal told us he cannot attend two schools at the same time, which is simply not true because public and private schools have nothing to do with each other. But we need to have my child enrolled in a public school in order to qualify for the student scholarship program.”
The idea, based on a technical interpretation of the word “enroll,” was promoted by State Representative David Casas, a Republican and co-sponsor of the scholarship legislation in Georgia. In meetings with parents, he had explained that the bill’s wording was intentional — using the word “enrolled” rather than “attending” — to enable the scholarships’ use by students already in private schools.
Parents questioned the idea. “Aren’t people going to say that’s a scam?” asked one father during a presentation by Mr. Casas that was posted on YouTube. “ ‘You’ve been going here for nine years. Now you’re enrolling in public school? You’re enrolled in two schools?’ ”
Mr. Casas, the president of a seminary, assured him it was not a scam. “Feel fine about it,” Mr. Casas said.
The fact that children already attending private schools can receive scholarships from some organizations means that Georgia’s private schools have a ready source of donations — parents and families of existing students. While the law was advertised as a way to help needy students, it contained no income limits for eligible recipients. And although it prohibits donations designated for a specific student, some students are benefiting from the donations of relatives and friends.
Hanaiya Hassan, whose daughter attends Hamzah Academy in Alpharetta, Ga., said she had saved $5,000 by asking four friends to donate to a scholarship organization with money earmarked for her daughter’s school. “If you collect four people for $2,500, then one of your children is free,” she said. The friends were awarded a tax credit. Depending on their tax bracket, some donors could actually come out ahead by filing for a federal charitable deduction as well as the state credit.
The Christian Heritage School in Dalton, Ga., circulated a flier for the 2011-12 school year titled “TUITION BREAKS FOR CURRENT FAMILIES!” It stated, “The scholarship tax credit is so vital to CHS that the school is encouraging all parents to participate in the program and enlist at least two others to do the same.” Participating families would get a 10 percent tuition rebate and a $250 bonus. The rebates would be doubled or tripled depending on overall participation.
–From Maureen Downey, for the AJC Get Schooled blog
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68 comments Add your comment
Buck Alford
May 22nd, 2012
9:03 pm
Maureen,
As Kim Dyson mentioned, it’s important to understand that there are scholarship organizations in Georgia that share many of your concerns and are doing something about it. My employer, Arete Scholars Fund, received a brief mention in the NYT article as an SSO that provides educational opportunity exclusively to low-income children. Like the program in Florida that even philosophical opponents hold up as a standard, Arete has established income eligibility guidelines, operational and accountability standards, and maximum scholarship amounts that the law doesn’t require. Our scholarships are empowering parents without means (in a state that ranks 46th in graduation rates) to select a learning environment that is best for their children.
Using the income guidelines for the federal free and reduced lunch program, Arete awards need-based scholarships directly to low-income families, who may use the scholarships at ANY accredited, eligible and participating school in Georgia. The scholarships always follow the child, and families are required to reapply each year to verify income. Additionally, maximum award amounts are set at a level that ensure substantial taxpayer savings. This year alone, Arete awarded scholarships to more than 1,100 students from families making an average annual income of less than $30K.
As for your question from Mr. Suitts, the short answer is we are. We stand in strong opposition to the ‘enroll for a day’ practice (and other noted abuses) and were outspoken in our support of SEF’s recent petition to the DOR to have the term clearly defined and the practice halted. Likewise, we spent much time at the capitol during this year’s legislative session, actively engaging lawmakers about ways to improve the program and sharing transformation stories that have been streaming in from low-income families all around the state.
Beyond that, I’m afraid that many who oppose the program philosophically benefit more by painting all SSOs with the same broad brush while ignoring the calls for greater accountability from those that are responsibly serving the needs of low-income students.
Why not choice?
May 22nd, 2012
9:42 pm
@Maureen: If vacations were allotted as are public school seats—chances are your next vacation would be to somewhere like Newark rather than Italy.
After all, why shouldn’t you suffer the same mediocre choices the average vacationing citizen does? Wouldn’t your proposed, selfish trip to a far-away exotic place remove more than your fair share from the public vacation coffers?
Perhaps more to the point: a foreign vacation for you would mean fewer jobs for domestic hotel and restaurant staffers here—and therefore less revenues for SEIU union bosses and less contributions to the Obama 2012 campaign.
Who at the AJC would then wish to remain your friend, Maureen?
Maureen Downey
May 22nd, 2012
10:26 pm
@Why, Not sure of your analogy even after reading it twice. Keeping in mind that these are tax credits, not tax deductions, it is hard to understand how any public official could counsel taxpayers to thwart the law so they can pay less taxes — in this case diverting legally owed taxes to their child’s private school tuition.
Give everyone a mechanism to circumvent taxes and welcome to a third-world nation where roads aren’t built, police aren’t on patrol and chaos and corruption reign. As a result of this law, Georgia has collected $142 million less in taxes at a time when police and fire services are being cut and roads are going unrepaired.
Maureen
Ms. Teacher Lady
May 22nd, 2012
11:20 pm
I worked for a private school who encouraged this method. They went out of business last year. Perhaps it was not because of this specifically, but this type of scamming behavior (and yes, it is a scam to enroll your kid in two places for the sole purpose of redirecting money intended for needy students for your wealthy one) is indicative of many private schools (including my previous employer).
Ms. Teacher Lady
May 22nd, 2012
11:33 pm
Okay, after reading all the comments, I have to add one more.
@OnceAgain Your comment “Please, just get the government completely out of the business of “educating” kids.” is really a disturbing one. Have you ever visited a country wherein the government got out of the business of education? I’m betting you haven’t, as most of them are known at “Third World.” I have, and let me tell you, the consequences of entirely privatizing education are dire, vast, and result in hundreds of thousands of uneducated children. And, to push the point, I’m sure you can imagine the problems a country might have when hundreds of thousands of its adult population never received an education. I agree that our public education system has problems (big ones), but the core idea of offering equitable access to education up to grade 12 is part of what makes us a democratic nation.
My goodness...
May 22nd, 2012
11:43 pm
I would be very careful of painting all the scholarship groups with a single brush. I’ve dealt with many and the one featured in the NYT article (not named, you notice) is crooked and has been told time and time again that they are crooked by many, many supporters of the program here in Georgia. They should be shut down. It’s also worth pointing out that they grant money to a small minority of students using scholarships.
The article is an expose and hit-piece all in one. It is filled with all the NYT hallmarks, including mentions to the most recent boogie men, “big oil” and ALEC.
To Maureen, do some digging. You’ll find that the generalization that all scholarship organizations are partaking in the despicable and deceitful actions of this unnamed group highlighted in the NYT article is dead wrong.
I imagine that opponents to the tax credit program will use this as ammo to call for repeal. I’m sure that the obvious rampant corruption will be cited as the main reason. A tip for these folks: careful with that logic. The public school system is filled with corrupt and crooked individuals, as the AJC has deftly reported over the past two years. There’s no way we should get rid of the public school system and we shouldn’t be quick to get rid of a scholarship program that really does serve kids that need it, despite the efforts of a bad actor.
Lee
May 22nd, 2012
11:56 pm
Sooo,
I donate $2500 to my local private school and get to take a tax credit on my Georgia income tax. If my child goes to same school and gets a “scholarship”, Maureen laments because some “poor” student does not get the benefit of my charitable contribution. However, the state now does not have to fork over an additional $7500-10000 to to pay for public schools to educate my child.
Seems to me the state gets a net gain out of the proposition.
Several have lamented about the “lack of control” over this money. But yet, they are silent about the tax breaks given to the United Negro College Fund.
Just more politically correct fun and games….
Dr. Craig Spinks/ Georgians for Educational Excellence
May 23rd, 2012
4:57 am
Has the GA private school scholarship program been evaluated by a competent, disinterested, out-of-state entity?
Lee
May 23rd, 2012
7:16 am
Interesting. I just read this gem from Maureen: “Give everyone a mechanism to circumvent taxes and welcome to a third-world nation where roads aren’t built, police aren’t on patrol and chaos and corruption reign.”
Ahhhh. The pathology of the politically correct mind. When the producers do not pay a disproportionate share of taxes, we’re on the way to becoming a third world country. When the third worlders ignore our borders and invade our country, bankrupt our health care and social services, overload our legal system, and turn once middle class neighborhoods into no-go zones, that’s diversity and must be celebrated.
————————————–
Hey, while we’re at it, how about this teacher who tries to indoctrinate students that you cannot say anything bad about the resident mulatto in the White House? http://www.foxnews.com/politics/2012/05/22/student-defends-criticism-obama/?intcmp=obnetwork#ixzz1vfmuAY8g
GNGS
May 23rd, 2012
7:26 am
@Lee
In order for your math to work, the scholarship must take a student out of public school system. IF you read the article, the whole point is that the scholarship had no material impact on student movement (public to private). Kids who are getting the scholarship are the ones who have been in private school already. Thus, it is a give-away to private school. It is very clear that the law was written deliberately to accomplish the goal. Do you know the difference between “enroll” and “attend”? Again, If you have read the article, you would have known that the word “enroll” was chosen for a reason.
Entitlement Society
May 23rd, 2012
8:04 am
Sensational journalism at its finest once again, painting broad stokes to demonize all private schools as evil. If the program weren’t in place and the schools weren’t offering the scholarships to children from public schools, then they would be the elitest bad guys, too. In the city of Atlanta, I know that one of the large private schools uses this program honestly and openly as it should – to subsidize tuition for children entering the instituition after a transfer from public school. IN NO WAY is it offered or ever suggested as a tool for current families. There are hurdles to jump over and many boxes to check if you want to apply for financial aid. This program has absolutely nothing to do with currently enrolled families, so it is NOT a give-away to children already in the private school system. Been there, done that, so yes, I can comment.
Maureen Downey
May 23rd, 2012
8:21 am
@entitlement, If you have not done so, I recommend that you look at the video of the law’s sponsor encouraging parents to get around the law by enrolling their kids in their local public schools but never attending them.
When a dad in the audience says that double enrolling seems like a scam to him, the state rep reassures him that is fine, that the charade — which the Southern Education Fund says is illegal — is fine with him, the governor and the Legislature.
When the architects of the bill urge people to abuse the program, it is not sentimentalization to report it. It is watchdog journalism and should be applauded.
Also, in the presentation, there is no mention of the program serving to give options to poor kids trapped in persistently under performing schools. The entire presentation heralds the law as choice for parents to send their kids to private schools and use state funds.
Maureen
Entitlement Society
May 23rd, 2012
9:25 am
@Maureen- I guess you didn’t get the point of my post. Not ALL private schools are evil as you’d like us all to think. I was merely pointing out an example of one of the city’s largest private schools that uses the funds in the correct way (to assist children who want to transition from public to private school, but need tuition assistance – parents see the light that public school has failed to provide an adequate education for their child, recognize that their child needs a stronger, more stable education environment and need help paying for it). In fact, the headmaster just sent out a letter to all parents yesterday commenting on the matter. Ethics are also a part of the curriculum at this private school.
Maureen Downey
May 23rd, 2012
9:28 am
@entitlement, Would like to see the letter from the headmaster.
Maureen
AlreadySheared
May 23rd, 2012
10:14 am
@Maureen,
1) “When a dad in the audience says that double enrolling seems like a scam to him, the state rep reassures him that is fine, that the charade — which the Southern Education Fund says is illegal — is fine with him, the governor and the Legislature.”
The NYT article makes it clear that the “charade” is intented by the legislators, and allowed in the program by the program administrators – in that case, how exactly is the Southern Education Fund’s opinion of its legality in any way relevant?
2) Unspoken in all this is the fact that public education institutions accept funds for private school students who are not served by said institutions. The public education bureaucrats are bleating about even a small portion of education funding ($50 million for the entire state) slipping through their fingers. What should really happen is that private school parents should be up in arms to reclaim the tens/hundreds of millions of dollars raised for the education of their children, but captured by the public education bureaucracy.
Some private schools refuse to follow lawmaker’s advice and cheat the state | Get Schooled
May 23rd, 2012
11:28 am
[...] The investigation in The New York Times about the abuses of the Georgia Private School Tax Credit program has riled up a lot of people. (See earlier blog on this.) [...]
Cissy
May 23rd, 2012
4:45 pm
This is disgraceful. How disingenuous of these schools not only to subvert the stated intent of the law but to make other private schools that are actually using these funds for need-based scholarships look bad. We give money to this program through Apogee; and I promise neither of our sons, who attend different private schools, has ever been offered any sort of tuition reduction. I agree that state law should require more transparency in who gets the scholarships and how they fare after getting them.
Media Not Telling the Whole Truth
May 26th, 2012
7:42 pm
As usual, it appears to me once again that Downey and the left wing media aren’t telling the whole truth and is using the NY Time Article to bolster what obviously seems to be more of the usual anti-School Choice, anti-Christian tone (not to mention, displaying their historical stupidity about what “Separate of Church and State” really means).
What both Downey and the media have again failed to do is “objectively report” on what is occuring representatively across the board. The reality is, of the 30+ SSO’s in GA, well over 90% of GA’s 38 SSO’s are meeting or exceeding the standards regarding ethically managing the program via collecting tax redirections and issuing need based scholarships. The reality is that most all of the SSO’s are doing this right and not only benefiting the target demographic, but at the same time, they are helping local public schools better manage their bloated bureaucracies in tough times by contributing to class size reductions at the lowest cost. Additionally, the Tuition Tax Credit Program is one of several school choice programs that is exposing parents to educational options other than traditional public schooling and providing viable access to all educational options and that is a good thing, as a one-size fits all traditional public educational approach to education surely benefits no one, most importantly, the child (although coincidentally, the modern day Democrats, while purporting to be the party of “raising up the downtrodden”, continually fight against all choice programs using the same false rhetoric and never seem to want to adopt this approach when it comes to education, which has been proven to the be the single most effective way to elevate one’s socio-economic status and eliminate the cycle of poverty – seems to me more proof in the pudding that modern day Democrats really are nothing more than Socialists and Communists in disguise).
Also, HB 325 was passed last year to provide stricter enforcement of the original HB 1133 bill from 2008 and more transparency to ensure SSO’s are following the guidelines. The bottomline is while certainly the actions noted in the article of some of the SSO’s and schools supported by the SSO’s are clearly wrong, the law provides for these to be addressed accordingly once discovered and reported, and the # of SSO’s violating the laws are in a very small minority and either already have been disbanded or shortly will be disbanded.
Since you’ll never get the whole truth on this blog, I thought it would be appropriate to get “The Rest of the Story” about one of the “Shining Stars” of SSOs- GRACE Scholars…published this week to supporters in response to the NY Times, AJC and 11 Alive hack jobs…
News reports disseminated this week by The New York Times, 11 Alive (the NBC affiliate in Atlanta), and The Atlanta Journal-Constitution raised some questions about practices used by some student scholarship organizations (SSOs) in Georgia. From its founding by Archbishop Gregory and Bishop Boland in 2008, GRACE Scholars has deliberately blazed its own trail to create an SSO that reflects Catholic teaching and best supported GRACE’s mission “to provide children from families with financial need throughout the State of Georgia with greater opportunities to secure a quality PK-12 Catholic education.” The GRACE path diverged from that of other SSOs as each developed their own policies and practices. This message describes how GRACE differs from other SSOs in three key areas featured in this week’s news stories.
Public school transfers: enrollment versus attendance
To qualify for SSO financial aid, students entering the second grade or above must be enrolled in a public school to qualify for SSO assistance. One of the legislators who authored the original SSO law is on record as saying that the choice of the word enrolled is neither an accident nor is it to be confused with attendance. Enrollment in this context means registered. Apparently many students have registered at public schools – but did not actually attend – to qualify for SSO funding.
GRACE adopted a stricter standard. The goal is to bring new students to Catholic schools. Enrollment without attendance is not recognized. To qualify for GRACE assistance, students must have attended a public school during the previous school year. Attendance is documented by a report card or transcript.
Designating contributions to individuals
The SSO law prohibits the awarding of a scholarship to a student at the request of a donor. Such gifts do not qualify for a federal charitable contribution deduction, and an IRS-recognized charity could lose its 501(c)(3) status if the organization treats such a contribution as a charitable contribution. The news media reports on practices by some SSOs that critics allege violates the spirit, if not the letter, of the law.
Since its inception, GRACE has had a clear policy prohibiting the designation of gifts to individual scholarships. True to its Catholic identity, GRACE seeks to serve the common good, not private agenda.
Means testing for scholarship assistance
Critics and supporters of SSOs differ on whether the Georgia legislature intended the SSO/education tax credit law to limit awards to those who demonstrate financial need. Of the 38 SSOs in Georgia, it is not clear how many SSOs practice means testing. It appears, however, to be a small number.
GRACE requires each candidate for a scholarship to submit a “calculated financial need” (CFN) when he or she applies for a GRACE award. CFNs are calculated by two nationally recognized, independent financial aid services based on tax returns and other information provided by the family. A Scholar Profile completed in December 2011 demonstrated that GRACE was reaching families with clear financial need. The average annual family income for GRACE families is $48,000. One in three GRACE Scholars qualifies for free or reduced school lunch. One in four Scholars come from families with annual incomes of $27,750. To view the complete Scholars Profile, please visit the GRACE website.
GRACE’s approach to these three issues reflects the vision of Georgia’s bishops and GRACE’s lay leaders of how a Catholic SSO should be structured and operated. The founders were not reacting to other SSOs. Rather, their aim was to build an organization that was true to its Catholic identity and faithful to its calling to make Catholic schools more accessible and affordable.