BIRMINGHAM, Ala. — Scholarship payments to private schools participating in the Alabama Accountability Act tax credit scholarship program are up for most schools, with some elementary and middle school students now receiving the $10,000 yearly maximum, according to reports filed with the Alabama Department of Revenue.
Average scholarship amounts have grown from $4,899 in 2015-2016, the AAA’s first year, to $5,907 last year, according to the reports.
As the state gears up to provide up to $100 million to families for school choice options through the CHOOSE Act’s education savings accounts worth $7,000, Alabama Daily News examined the amount of scholarships awarded through the AAA, the state’s first school choice program.
Prior to the 2023-24 school year, elementary scholarships through the AAA were capped at $6,000 and middle school scholarships were capped at $8,000. High school scholarships were capped at $10,000, but state lawmakers set the maximum for all scholarships, regardless of grade level, at $10,000 at the start of the 2023-24 school year.
Seven of the state’s 122 participating schools reached the $10,000 maximum:
All schools are located in Birmingham, except Randolph School, which is located in Huntsville.
About 3,600 students used tax-credit scholarships during the 2023-24 school year, Alabama Daily News reported last month. Scholarships are funded through donations, for which contributors get a dollar-for-dollar state tax credit, and distributed by scholarship granting organizations, as defined by the 2013 law.
Andy Ryan of the Alabama Opportunity Scholarship Fund said his SGO has around 2,000 students on a waiting list.
The table below shows key metrics from the reports, including the number of scholarships, the average amount paid among schools, the lowest amount and the highest amount. Click here if you are unable to see the table.
Because of the timing of when a scholarship granting organization, or SGO, pays scholarships, it could appear that the maximum amount paid was higher than $10,000, but SGO officials say that is likely a function of when reports are filed.
Alabama Daily News compiled payment amounts from the quarterly reports SGOs began filing in 2015 to calculate the amounts used for this analysis. Those quarterly reports are the only required documents that show how many students are using scholarships at each school and the total amount paid to that school for that quarter.
While state law sets a $10,000 maximum scholarship award, there is no minimum requirement, giving organizations the ability to decide each year the size of the scholarships awarded.
And ADN found no clear correlation between scholarship amounts and tuition rates. And while there is no public record listing all private school tuition rates, schools are required to publish tuition and fees on their websites.
A check of those school websites showed tuition rates ranging from $1,850 to nearly $30,000 for the current school year.
The table below shows the number of scholarships reported at each school and the average amount paid per scholarship at that school for the past two years. Click here if you are unable to see the table.
Scholarships for Kids is the state’s largest of seven scholarship granting organizations currently operating in Alabama. Executive Director Stephen Bridgers told Alabama Daily News that payments may not correlate with tuition because of the process through which scholarships are awarded.
Students must first qualify for a scholarship, meaning the family cannot earn more than 250% of the federal poverty level, which is $75,000 for a family of four for the current school year, for example.
After a student qualifies, Bridgers said his organization considers a parent’s means to determine what portion of tuition the parent can pay, a requirement at SFK.
“Paying something gets more buy-in from everybody involved,” he said. But that amount could differ from family to family, meaning scholarship amounts can differ, too.
Because scholarships are based on a parent’s means, scholarship amounts could be different even for students attending the same school.
“It’s trying to find that balance between where the parent doesn’t have too much of a burden, but the school also doesn’t as well,” Bridgers said.
Families say that it works for them, he added. “Once parents and students come into one of our schools, usually they don’t leave until they graduate.”
Scholarships for Kids has a 97% retention rate, meaning 97% of parents who receive a scholarship come back for another school year, he said.
About the AAA Tax Credit Scholarship Program
The Alabama Accountability Act tax-credit scholarship program, the state’s first school choice program, allows eligible K-12 students to get scholarships to use for eligible educational services using money donors contribute to scholarship granting organizations in exchange for donors getting a dollar-for-dollar state income tax credit, up to a certain cap.
Until 2022, SGOs were required to award all donated amounts during the same academic year those donations were received, but now are given three calendar years to distribute those donations.
The cap on tax credits for 2024 is $40 million. In order to get the actual income tax credit, donors must first donate money to one of the seven registered SGOs. Donors must then reserve their tax credit through the Alabama Department of Revenue’s website, which tracks the total of tax credits reserved.
officials tell ADN that the bulk of their donations come in at the end of the year. According to the Alabama Department of Revenue website, with seven weeks left in the 2024 tax year, less than $7 million in tax credits have been claimed for the 2024 tax year.
The AAA was passed in 2013. It was initially branded as a way to allow low-income students – currently defined as students whose families earn no more than 250% of the federal poverty level – to escape “failing” public schools, as they were initially called, but was revamped to become a school choice program.
Eligibility for scholarships expanded in 2023 after lawmakers swapped “failing” schools for “priority schools” - those that earned a ‘D’ or ‘F’ on the state report card - and bumped students zoned for priority schools to the front of the line.
Students with “unique needs,” defined as a student who has an Individualized Education Program (IEP) or Section 504 plan now are also eligible for scholarships.
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