Only a few kids per class out of 414 failing schools to get EITC 2.0 scholarships

By Peter L. DeCoursey
Bureau Chief

HARRISBURG (July 25) – Only a few kids per class in 414 failing schools could get an EITC 2.0 scholarship of up to $8,500 to attend another private or public K-12 school.

How many will get it? Analysts and educators are unsure. If the scholarships pay the full cost of sending poor kids to another school, ranging from $3,000 to $4,000 for elementary schools, to the program limit of $8,500 or $15,000 for special education students, analysts estimate the 6,000 to 10,000 kids will benefit and escape failing schools. If the average payment is closer to the average scholarship under EITC 1.0, $1,000, more kids will be helped.

The department of education says 242,000 kids are in those 414 failing schools.

EITC 1.0 awards more than $100 million in tax credits to businesses who fund children who get scholarships to other schools and to scholarship organizations and other purposes. The 2.0 program awards potentially larger scholarships to families served by the state’s worst schools.

The department today released the list of the schools eligible for the 2.0 scholarships. They are comprised of the lowest-performing 15 percent of secondary schools and the lowest-performing 15 percent of elementary schools in the state.

Kids who attended the 414 schools on the list – even the schools which have closed now – will be able to apply for the scholarships of up to $8,500 for most students, sometime in August, according to state officials.

First, the businesses applying for the $50 million in tax credits must wait for the Department of Community and Economic Development to release the guidelines for them. That should occur in early August, said Steven Kratz, DCED spokesman.

“The guidelines are in the process of being developed, the goal is to have them done by early August,” Kratz said. “The staff is going to press pretty hard to make sure the scholarships can be used for this school year.”

The release of the guidelines will also trigger the beginning of applications of scholarship organizations, which accept the donations from businesses and serve as the middlemen between families applying for the scholarships and schools accepting the students, said Education Department spokesman Tim Eller.

The schools interested in accepting the 6,000 to 10,000 kids the EITC 2.0 program can likely afford to subsidize “have to make their intent known to scholarship organizations, which in turn will work with parents in selecting a school,” Eller said.

Peter Gleason is board chairman of one of the more prominent scholarship organizations, the Bridge Foundation.

He said: “DCED has an enormously difficult task ahead of it to implement EITC 2.0. In the midst of this start-up process, it must also continue its review and approval of EITC 1.0 tax credit applications. I don’t envy the staff over there. So much for August vacations.

“As DCED works to implement 2.0, it certainly helps that 1.0 Scholarship Organizations can help kids in all schools, including those eligible under 2.0. At Bridge Educational Foundation, for instance, we have helped families in Philadelphia to the tune of $3.5 million since our inception and we have substantial funds programmed in the current fiscal year for families who live there, and in school districts like Harrisburg and Chester Upland.

“For now, as long as all our donors are approved under 1.0, we may take a wait-and-see approach to DCED’s implementation of EITC 2.0 and react accordingly. We believe it’s far better to get it done right than get it done fast.

“The good news is that we, and other 1.0 scholarship organizations, are in a position to be patient. Thanks to the General Assembly and the Governor increasing EITC 1.0 by $25 million, we should have plenty of bandwidth to help thousands of families this year under the traditional EITC Program. And, as more donors move from 1.0 to 2.0, that bandwidth will hopefully expand in the years ahead.”

The new law allows for up to $50 million in tax credits to be allotted. Private school tuitions range from $4,000 or less for elementary school to more than $30,000 per year for some secondary schools. The new law caps the per-student award at $8,500 per student and at $15,000 per special education student.

But the scholarships may be for lesser sums, Gleason said.

He said program spending estimates based on allotting full tuition to each student “ignores the fact that the average 1.0 scholarship is $1,000. While that may increase as the amount of credits go up and income eligibility goes down, while I cannot speak for other SOs, I don’t expect that Bridge will be offering full scholarships.

“We think it is a good idea for the family to have some skin in the game, which is also why Bridge requires our families to perform several hours of community service in return for our partial scholarships.

Gleason also added of the average $1,000 scholarship which Bridge offers to roughly 2,500 families a year: “Sometimes it is supplemented by other scholarships or tuition reductions offered by the school, and sometimes our scholarships are higher. Ultimately, we look to the schools for guidance on what it takes to get or keep a kid in school.”

The family income limit for EITC 2.0 is $60,000, plus $12,000 per dependent. For a family with four eligible children, that would make their income limit $108,000 or less to qualify for the program.

Otto Banks of the REACH Foundation said the law gives poorer family’s preference for the EITC 2.0 funds.

And in many of the communities served by these 414 schools – the lowest-performing schools in the state – “The reality is that in these communities, served by failing schools, have already seen significant middle-class flight,” said Rep. Mike Gerber, a key House Democratic supporter of the law. “So most of the families that will benefit from the program are living far below the income limits set by this proposal. And if this proposal keeps more middle-class families from fleeing these neighborhoods, that is a real benefit for those communities, too.”

But neither the potential business applicants nor the scholarship organizations which help allot the $100 million per year in EITC 1.0 and the $50 million in 2.0 can start the 2.0 process until the DCED guidelines and online applications are done.

And some involved in the process believe the 1.0 applications may not be approved until September, setting the 2.0 applications back past the start of school. Gleason said Bridge Foundation would take a wait-and-see approach to 2.0 this year.

Banks of the REACH Foundation, which advocated for both EITC programs – 1.0 serves families in all school districts and has no preference for poorer families – said all $100 million in 1.0 tax credits had already been allotted to applicants. He said state officials are encouraging those whose applications for those credits were not approved to apply for the 2.0 funds, once those guidelines are released and online applications start “next month.”

About 2,500 businesses paid for scholarships for EITC 1.0 last year, Kratz said. This year businesses could apply for up to $400,000 in tax credits for the scholarships they award to kids, up from $300,000 last year.

Banks said: “There are clearly businesses who want to do this and planned to do this, and now we just have to show them, and their accountants, that 2.0 is just as good a deal for them as 1.0.”

Representatives of the scholarship organizations who will also have to apply to take part in the 2.0 process, and representatives of the state’s Catholic dioceses could not be reached for comment Wednesday evening.

“There is going to be a concerted effort to make this work this year to help kids,” said Kratz.

Banks noted that timing and school acceptance policies will likely mean that some, perhaps many, of the EITC 2.0 scholarship kids may start school after their new school begins classes.

“We are doing what we can, the Department of Education is doing what it can, the businesses, the scholarship organizations, all of us have a lot to do to help kids,” Banks said. “And while the timing is tight, we are confident everyone will work together to benefit as many kids as we can, as quickly as we can.”

Kratz noted that until the $50 million is allotted, kids could be placed in schools after the school year starts, if the new school accepts them.

Now that the state has identified the list of low-performing schools, the districts have 15 days to notify parents of kids in those schools of the EITC 2.0 program with a description and application instructions.


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