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Iowa – School Tuition Organization Tax Credit


Iowa – School Tuition Organization Tax Credit

The Iowa School Tuition Organization Tax Credit program, a tax-credit scholarship program, was enacted and launched in 2006. It helps Iowa students from low- and lower middle-income households to afford the schooling options that best fit their needs. Learn more about the program’s details on this page, including eligibility, funding, regulations, and more.

Program Fast Facts

  • 10,494 participating students (2014–15)

  • 34 percent of families eligible statewide

  • 12 scholarship organizations awarding scholarships (2014–15)

  • 139 participating schools (2014–15)

  • Average scholarship value: $1,287 (2014–15)

  • Value as a percentage of public school per-student spending: 12 percent

Program Details

Iowa’s School Tuition Organization Tax Credit Participation

Students Participating
School Year Ending

Click the + symbols to learn more about this program’s details.

Iowa offers tax credits to donors supporting School Tuition Organizations (STOs), nonprofits that provide private school scholarships to students in need.

Student Funding

Scholarship amounts are determined by STOs.

The credit is worth 65 percent of the donation’s value, which also is limited by a statewide cap of $12 million. Each STO is able to grant tax credits to its donors up to its share of the statewide limit, with each STO’s share determined by the enrollment at the schools it serves. Corporate donations are able to constitute up to 25 percent of the $12 million cap.

Student Eligibility

Children are eligible to receive scholarships if their family income does not exceed 300 percent of federal poverty guidelines ($72,750 for a family of four in 2015–16).

Rules and Regulations

  • Income Limit: 300 percent x Poverty
  • Prior Year Public School Requirement: None
  • Geographic Limit: Statewide
  • Enrollment Cap: None
  • Scholarship Cap: Full Tuition
  • Testing Mandates: None
  • Credit Value: 65 percent
  • Total Credit Cap: None
  • Budget Cap: $12 million
  • STO Requirements:
    • Use at least 90 percent of contributions for scholarships
    • Make scholarships available for more than one school
    • Annual review of financial statements by public accounting firm
    • Submit data to the state on accepted contributions, grants awarded, and participating schools

Governing Statutes

Iowa Stat. § 422.11S

Legal History

No legal challenges have been filed against the program.

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