2. Private Scholarships

Where legislation is failing to improve the public school system and provide greater parental choice, private organizations have stepped in to fill the gap between parents' demand and the limited opportunities for school choice.

The Educational Choice Project in Battle Creek and CEO Michigan in Grand Rapids distributed nearly 650 private scholarships to children in the 1998-99 school year. More than $2.2 million has been invested to provide children with the opportunity to attend the schools that best meet their needs. Although CEO Michigan has been able to help 500 children so far, there are still more than 5,135 students on its waiting list.105

Philanthropist Virginia Gilder started a private scholarship program with $1 million to bail children out of Albany, New York's worst-performing school, Giffen Elementary. Over 100 of the 458 children at Giffen accepted Gilder's scholarships, which pay up to 90 percent (capped at $2,000 per year) of the cost of attending a private or parochial school for a minimum of three years and a maximum of six. Those who took advantage of Gilder's generosity included the child of Giffen's PTA president.

Albany school officials reacted to the exodus of students by making major changes in the Giffen school, including the replacement of the principal, two assistants, and more than 12 teachers. Gilder's private scholarship clearly demonstrated the ability of incentive reforms to improve government education.106

In New York City, the privately funded School Choice Scholarship Fund invested $6 million in 2,500 student scholarships in 1997 (1,000 more than the previous year). Students from the city's 14 lowest-performing districts were permitted to attend their schools-of-choice, while 20,000 more awaited the opportunity. All of the students who were eligible to receive the $1,400 scholarship qualified for the federal free-lunch program. A study conducted by Paul Peterson of Harvard University and David Myers of Mathematica Policy Research reported that about 95 percent of the students being assisted by the scholarship are black or Hispanic and the average incomes of all benefactors is just over $9,500.107

Similarly, in 1998, the Washington, D. C.-based Washington Scholarship Fund provided 1,000 low-income students with scholarships to attend the schools of their choice. When the fund announced its scholarships, over 7,500 students—10 percent of the children enrolled in Washington's government schools—applied for them.108

By March 31, 1999, the nationally focused Children's Scholarship Fund (CSF) had received 1.25 million applications from over 22,000 communities from all 50 states for its $1,000, 4-year scholarships. Though the average income of the applicant families was under $22,000 a year, they were willing to make significant financial sacrifices if they received only a partial scholarship. Ted Forstmann, co-chairman and CEO of CSF, remarked, "Think of it: 1.25 million applicants asking to pay $1,000 a year over four years. That's $5 billion that poor families were willing to spend simply to escape the schools where their children have been relegated and to secure a decent education."109

Low-income families in Milwaukee have benefited from the largest private scholarship program to date. In 1998, approximately 4,500 scholarships were awarded by the city's most prominent businesses and foundations through Partners Advancing Values in Education (PAVE).

PAVE provides scholarships equivalent to half of the tuition at any K-12 private or parochial school in Milwaukee. As affluent parents have done for years, low-income parents in Milwaukee are now empowered to choose the school best suited for their children's needs. PAVE scholarships are awarded on a first-come, first-served basis to low-income families in search of educational choice.

Students using PAVE scholarships collectively worth over $4.2 million attend more than 110 private elementary and secondary schools in the Milwaukee area. Parents are satisfied with the opportunity to choose alternative schools for their children, and a survey revealed that 75 percent of PAVE's scholarship graduates—all low-income students—continued with post-secondary education. 110