CASCADE POLICY INSTITUTE April 2001 No. 2001-13 Summary Privately funded scholarship programs, such as the Children’s Scholarship Fund, demonstrate a significant demand for alternatives to the government education system. School tax credits encourage donations to educational foundations, allowing more students to attend the schools of their choice. Word count: 660 Private scholarships expand school choice By Nick Weller Many students are left behind in the public education system; that’s no secret. The situation has not changed much despite continuous debates about how to fix public schools. There is good news, however. Privately funded scholarship programs offer new educational opportunities to low-income students in Oregon and across the country. In 1999, Cascade Policy Institute helped bring one such program—the Children’s Scholarship Fund (CSF)—to Portland to provide low-income students an opportunity to attend schools of their choice. Children’s Scholarship Fund is a national, privately funded program that provides four-year partial scholarships to students in grades K-8. To make the opportunity a reality, Cascade is raising $1 million locally to be matched by funds from the national CSF. All of the money raised goes directly to students; Cascade pays for the program’s administration out of its own budget. Applications for the scholarships were overwhelming. In the tri-county region, families of more than 6,600 students submitted applications for the 500 available scholarships. Students were selected by lottery, and these youngsters now attend more than 70 private schools in the Portland metropolitan area. To qualify for CSF, families must have an income level equal to that defined by the federal free lunch program standards. The scholarships pay for only a portion of a private school’s tuition; families are required to spend at least $500 of their own money for tuition to foster parental involvement. The average contribution is over $1,000. Cascade has received letters and phone calls from participating families that confirm participants are more satisfied at their new schools and students are receiving a better education. “My daughter is happier at Faith Bible Christian School than she ever was in her public school. The smaller class sizes allow for more individual attention. I plan to keep her at this school,” said the parent of one CSF recipient. “Privately funded scholarship programs offer new educational opportunities to low-income students in Oregon and across the country.” 813 SW Alder Street, Suite 450 Portland, Oregon 97205 (503) 242-0900 www.cascadepolicy.org -more- Children’s Scholarship Fund has been a blessing to numerous parents and students. Unfortunately, the families of over 6,000 other interested students in the Metro area were not able to take advantage of this opportunity. Cascade Policy Institute still receives weekly calls from parents who seek support for their children’s education even though there has been no major advertising to increase awareness of the program. The students whose families did not receive scholarships remain trapped in a school system that does not meet their needs. There are ways, however, to increase the number of students who can attend schools of their choice. The easiest and most basic way is to create an education tax credit that encourages donations to non-profit educational institutions. Organizations like Children’s Scholarship Fund and various public school foundations would be eligible to receive additional funds from private donors. These contributions could then be given to students or schools identified as needing financial assistance. Arizona provides a case study that shows just how successful a program like this can be. Since the Arizona legislature passed education tax credit legislation in 1997, donations to private scholarship organizations have grown substantially, from $2 million in 1998 to $13 million the following year. Donations to public school foundations also increased; in fact they dwarf contributions to private school foundations. Arizona’s example shows that taxpayers value education enough to provide opportunities to students in both public and private schools. The potential benefit of a similar tax credit in Oregon is significant. More lowincome families would have the opportunity to make a choice about education, thereby giving them the same opportunity as their financially better off peers. Children’s Scholarship Fund has shown itself to be immensely popular, but it’s only a first step, and there are thousands of other families anxious to gain greater control over which school their kids attend. School tax credits would increase the amount of money voluntarily given to educational institutions, providing new and better opportunities for many Oregonians. Arizona took the first step; we should follow them and provide a way to help more students and parents have choice in education. “School tax credits would increase the amount of money voluntarily given to educational institutions, providing new and better opportunities for many Oregonians.” Attention editors and producers Cascade Commentaries are provided for reprint in newspapers and other publications, with credit given to author(s) and Cascade. Contact Cascade to arrange print or broadcast interviews on this commentary topic. Electronic text files are available online at www.cascadepolicy.org/cctext/. Please contact: Angela Eckhardt Program Director Cascade Policy Institute 813 SW Alder Street, Suite 450 Portland, Oregon 97205 Phone: (503) 242-0900 Fax: (503) 242-3822 www.cascadepolicy.org firstname.lastname@example.org Nick Weller is an education policy analyst at Cascade Policy Institute, a Portland, Oregon think tank. More information about education reform and the Children’s Scholarship Fund is available online at www.cascadepolicy.org.