Student Opportunity Scholarships would give families of K-12 students access to tax-credit scholarship funds. This would enable them to meet their children’s unique academic needs with instruction, materials, and services which are, in some cases, not available to them in the public system.
How would accounts be funded?
- Individuals and companies make donations to scholarship-granting organizations that are subject to state oversight. Those organizations, in turn, distribute scholarships on behalf of children, with families controlling funds in their child’s account. Donors to the scholarship organizations receive a dollar-for-dollar credit on Michigan’s individual or corporate income tax.
How would eligibility for scholarships be determined?
- Scholarship organizations give the first priority to free or reduced lunch students, children in foster care, or students with disabilities eligible for an individualized education program; these students are also eligible for the highest scholarship amounts.
- Other students are eligible for smaller scholarships, with eligibility based on a sliding scale according to household income. A household would qualify as long as its income is no more than 200% of the reduced lunch qualification threshold ($98,000 for a family of 4).
How would the accounts work, and how could families use them?
- There is a wide array of possible uses: tuition; tutoring; online courses; dual enrollment; curriculum materials; alternative education, summer school, and after-school programs; occupational, behavioral, or speech-language therapies; mental health services; career counseling and training; education-related transportation; AP and college prep testing fees; athletic and extracurricular activities.
- All student accounts are subject to a maximum contribution cap each year — $500 for public school students, $1,100 for students with disabilities. For families paying tuition or providing at-home instruction, accounts are capped at 90% of the state’s K-12 school funding formula.
How would the state ensure organizations properly administer funds?
- Organizations must prove their 501(c)3 status to the Michigan Department of Treasury to launch; this means they must supply their articles of incorporation and provide full documentation of their IRS status and audited financial statements to qualify and then renew their approval.
- Organizations are required to provide parent-friendly information and scholarship application processes, and must spend at least 90% of the available funds on scholarships.
- Contributions to the organizations cannot be designated to benefit individual students, nor can an administering organization give scholarships to the children of its board members, staffers or anyone else affiliated with the organization
How would the state further guarantee oversight and accountability of the scholarship funds?
- The Department of Treasury retains standard procedures for approving tax-credit donations and scholarship-granting organizations.
- The department provides annual reports to the Legislature on how money from the program is used and what it accomplishes.
What would schools and other education service providers have to do in order to receive funds?
- There are no new state regulations beyond what is needed to oversee the program.
- The program does not establish new state accountability or testing requirements.
- Schools and other education providers cannot be forced to alter their creed or policies.