Earlier this week Representatives Rob Bryan (R-Mecklenburg), Brian Brown (R-Pitt) and Marcus Brandon (D-Guilford) introduced HB 944, the Opportunity Scholarship Act. The legislation allows children from families with limited financial resources to apply for a scholarship grant of up to $4,200 per year. The grants could be used to help pay for tuition and fees, books, transportation or other required expenses for nonpublic education.
In commenting on the legislation, House Speaker Pro Tempore, Paul “Skip” Stam, also a sponsor of the legislation, said, “Parents deserve the chance to choose the best educational option for their children,” Stam said. “This type of bill expands those options and makes the choice of a nonpublic education really affordable for many.”
The legislation is in response to growing public sentiment for school choice. Results of two recent polls on school choice in North Carolina underscore this sentiment.
- Over half (52 percent) of respondents said if given a choice, they would choose an alternative other than traditional public schools (Source, March 2013, Civitas Poll).
- High percentages of respondents (57 percent, June 2012 Friedman-Civitas Poll) and 46 percent (February 2013, Civitas Poll, 2013) support the use of vouchers to allow parents to choose the best school that fits their child.
- 65 percent of respondents support the use of scholarship grants to help families pay tuition, fees, books and other educational expenses at an appropriate school (Source: February 2013, Civitas Poll).
These findings confirm a gap between the school options parents want and the options currently available to them. The introduction of the Opportunity Scholarship Grant (OSG) is a big step in bridging that gap and expanding educational opportunities for parents and students.
How Does the Legislation Work?
To fund the program the legislature would appropriate $40 million in state funds in fiscal year 2013-14 and another $50 million in funds in 2014-15.
The program will be administered by the State Education Assistance Authority (SEAA). To help administer the program, SEAA may retain up to 1 percent of program funding annually. Grants will be administered on a first-come-first-served basis. Twice a year, parents will receive a check to help pay educational expenses.
Who Is Eligible?
Eligible students include: any student who has not yet received a high school diploma and was classified as a full-time student in a public school during the previous semester; any student who received a scholarship grant during the previous school year or is entering kindergarten or first grade; any student in foster care or an adopted child or a child of active military personnel is eligible to apply.
In addition, eligible students must also be from households whose family income is not in excess of 225 percent of the federal poverty level in FY 2013-14. For a family of four, that figure is $52,988. In 2014-15, eligibility for the scholarship grant will increase to 300 percent of the federal poverty level. SEAA is responsible for verifying any information from eligible students.
|EOSG Eligibility Guidelines|
|Persons in Family||Poverty Guideline||
(225% of Poverty)
Post FY 2014-15
(300% of Poverty)
Students awarded a Scholarship Grant are eligible to attend a school that meets any one of the following qualifications:
- Is accredited by the State Board of Education
- Is accredited by a national or regional accrediting agency
- Is an active member of the North Carolina Association of Independent Schools
- Receives no funding from the state of North Carolina
HB 944 includes several provisions to ensure funds are properly spent. Nonpublic schools who enroll OSG recipients must submit the test scores of any nationally standardized achievement test administered to any OSG student. In addition, schools will be required to furnish graduate rates of OSG students. Any school that receives more than $300,000 in OSG funds will be required to provide a financial review by a certified public accountant to the state. Schools enrolling more than 25 scholarship grant students are required to report on the aggregate standardized test performance of eligible students. Any institution that accepts OSG funds and fails to comply with these requirements will be ineligible to receive future scholarship grants.
OSG: The Economic Impact
HB 944 requests $40 million to fund OSG for 2013-14. The legislation is targeted to families that cannot easily afford alternative means of education. We must remember the cost of educating a child in public school is on average more expensive than educating a child in private school. State and local expenditures are $6,745 per student (and federal funding adds roughly another $2,000 to that total). A Scholarship Grant would cost the state up to $4,200 per year.
OSG will provide significant savings for parents and taxpayers when parents make the decision for private school rather than public. In 2013-14, OSG would provide a net fiscal cost to the state of $22.2 million. The second year, that figure is increased to $23.4 million but offset by $7.1 million in operational savings to local LEAs. The costs are real. However they represent a small cost to expand educational opportunities for students from families of limited means.
Poll results suggest North Carolina parents want expanded educational opportunities. HB 944 – patterned after successful programs in Ohio, Louisiana and Indiana – offers middle- and low- income parents and students the opportunity to choose where their children will attend school. In a recent poll, support for such a proposal was 50 percent or more – sometimes with support levels in the 60s or 70s – across all geographic region, gender, age, party registration, education and race. 
While this legislation offers promise, education advocates are right to insist on school choice legislation that balances the goals of expanded opportunity with institutional autonomy and public accountability. Fortunately, Florida, Indiana, and Louisiana have shown us that it is possible to develop legislation that achieves these goals.
HB 944 expands educational opportunity for students and parents. Research results and higher parental and student satisfaction levels suggest there are many benefits to giving parents more choice over where their children are educated. This bill represents a modest investment to expanding educational opportunities for young people who need it most. A lifetime of individual and societal benefits are returns that make school choice an option that should not be ignored.
 Civitas Releases Poll on Education Issues, March 7, 2013. Available at; www.nccivitas.org/wp-content/uploads/2013/03/xtabs-ed.pdf