February 17, 2012

Catholic Education Outreach / G. Joseph Peters

What’s the scoop on school vouchers and tax credit scholarships?

G. Joseph PetersSchool vouchers and tax credit scholarships for non-public school students are now a reality in Indiana. The Office of Catholic Education wants qualifying families to understand their options and to consider a Catholic school education for their child or children for the 2012-13 school year.

We also want potential donors to understand and invest in tax credit scholarships to enable eligible families to choose Catholic schools, and receive significant state tax benefits for themselves in return.

Indiana School Vouchers

A family who meets eligibility guidelines for the federal Free and Reduced Lunch Program can receive a scholarship from the state to cover part of Catholic school tuition at the least of three amounts:

1) The amount of tuition and fees charged by the school. 2) A maximum of $4,500 for a student in grades 1-8—more in grades 9-12. 3) An amount based on the per-student state funding for public schools in the family’s school district of residence as follows:

• 90 percent of the local funding amount if household income is up to 100 percent of Reduced Lunch eligibility;

• 50 percent of the local funding amount if household income is up to 150 percent of Reduced Lunch eligibility (see accompanying chart); and 4) The eligible child must be a student in grades 2-12 enrolling in a Catholic school after attending at least one year—two semesters—in an Indiana public school, or 5) The eligible child must be a current non-public school student in grades 1-12 who received a Tax Credit Scholarship for a prior school year—two semesters. The law allows eligible kindergarten and first-grade students in Catholic schools to receive tax credit scholarships that can make them eligible for a state school voucher the following school year.

Indiana Tax Credit Scholarships

These are scholarships provided through the Educational CHOICE Charitable Trust that provide a minimum of $500 toward the tuition of a student in a non-public school of the parents’ choice. A student can qualify if the family’s income is up to 200 percent of the Federal Reduced Lunch Program guideline or less (see chart).

Donating for Tax Credit Scholarships

Donors—individuals or corporations—are eligible for a 50 percent credit against their state tax liability for contributions made through an Indiana Scholarship Granting Organization (SGO). The SGO for the archdiocese is the Educational CHOICE Charitable Trust. A change in the law allows gifts to be designated by the donor to a specific school or group of schools, but not to specific students. An individual school must establish a fund within the trust of at least $5,000 to allow donor designation.

The goal of the archdiocese is to have Catholic schools identify each and every eligible potential kindergarten or first grade student and offer the opportunity for a CHOICE Tax Credit Scholarship so that the student may be eligible next fall for an Indiana state school voucher. Eligibility can only be established during the first year of enrollment in the Catholic school, and could qualify a student for a state voucher of $4,500 or more annually for the next 12 years—a potential $54,000 to $64,000.

What to do? If you are an eligible parent of a public school student—or of an incoming kindergarten or first-grade student and want your child to attend a Catholic school—you should apply now to the Catholic school of your choice.

If you are a donor who would like to help families to have this choice, contact your local Catholic school principal for information about donating through the SGO. You can also find more information at www.archindy.org/schools or www.ChoiceTrust.org.

(G. Joseph Peters is associate executive director of the archdiocesan Office of Catholic Education. E-mail him at jpeters@archindy.org.)

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