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Illinois – Invest in Kids Program

Illinois – Invest in Kids Program

Illinois’s Invest in Kids program, a tax-credit scholarship program for low- and middle-income students, was enacted in 2017 and will launch in 2018, making it Illinois’s second educational choice program. Learn more about the program’s details on this page, including eligibility, funding, regulations and more.

Program Fast Facts

  • Illinois’s second educational choice program

  • 22nd tax-credit scholarship program nationwide

  • Limited to low- and middle-income families

  • 52 percent of families with children income-eligible statewide

  • Maximum value: $12,973 (2015–16)

  • Maximum value as a percentage of state’s public school per-student spending: 94 percent

Program Details

Percent of Illinois families with children eligible for the Invest in Kids Program

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

Illinois offers tax credits to individuals and businesses for donations to scholarship-granting organizations (SGOs), nonprofits that provide private school scholarships to low- and middle-income students.

Student Funding

Each SGO determines the amount of the scholarships it distributes, but no scholarship amount for general students can exceed the lesser of the state’s average operational expense per pupil (OEPP; $12,973 in 2015–16) and the necessary costs and fees for attendance at the qualified school.

  • Students identified as gifted and talented children may receive a scholarship worth up to 110 percent of the state’s average OEPP.
  • Students who are English Language Learners may receive a scholarship worth up to 120 percent of the state’s average OEPP and students eligible to receive services under IDEA may receive a scholarship worth up to 200 percent of the state’s average OEPP.
  • Students whose household income is less than 185 percent of the poverty level ($45,510 for a family of four in 2017–18) may receive a scholarship worth up to 100 percent of the state’s average OEPP.
  • Students whose household income is between 185 percent and 250 percent of the poverty level ($61,500 for a family of four in 2017–18) may receive, on average, a scholarship worth up to 75 percent of the state’s average OEPP.
  • Students whose household income is 250 percent or more of the federal poverty level may receive, on average, a scholarship worth up to 50 percent of the state’s average OEPP.

Until April 1 of the year preceding the scholarship year, SGOs are required to grant priority to (1) eligible students who previously received a tax-credit scholarship, (2) students from households whose prior year’s income does not exceed 185 percent of the federal poverty level (FPL; $73,800 for a family of four in 2017–18), (3) students who reside in districts that have a school with at least one subgroup whose average student performance is at or below the state average for the lowest 10 percent of student performance in that subgroup or with a school with an average graduation rate of less than 60 percent, then (4) siblings of current scholarship recipients. All other eligible students shall be eligible to receive scholarships without regard to those priority groups beginning April 1 of the same year.

Student Eligibility

Students are eligible to receive scholarships if their family income does not exceed 300 percent of the federal poverty level ($73,800 for a family of four in 2017–18). Once a student has received a scholarship, families may earn up to 400 percent of the FPL ($98,400 for a family of four in 2017–18) for the duration of the scholarship or scholarship renewal while retaining eligibility.

Students must also (1) be eligible to attend an Illinois public elementary or high school the semester prior to receiving a scholarship or be starting school in Illinois for the first time and (2) reside in the state.

EdChoice Expert Feedback

Illinois’s tax-credit scholarship program is a positive step for families wanting educational choice in the state. The program allows students to be eligible without first requiring them to attend a public school, which grants access to more families than states that have such a requirement. Moreover, the scholarships offer high funding amounts for low-income families, gifted students, English language learners and students with special needs. However, there is room for improvement. The $75 million credit cap, while seemingly large, is a small fraction of what Illinois spends on K–12 education. The state testing mandate may deter private schools from participating in the program and provide a strong incentive to narrow the curriculum and “teach to the test”; a nationally norm-referenced test would allow scholarship students’ parents to compare their performance with students nationally without imposing the unintended consequences that stem from imposing a single state test. It is also unclear whether the 75 percent credit value will provide enough of an incentive for individuals and businesses to donate the maximum amount to scholarship-granting organizations so as many students as possible have access to scholarships. Additionally, disbursing credits in a manner that is “geographically proportionate to enrollment in recognized non-public schools in Illinois” does not incentivize the opening of private schools in small town and rural areas that do not already have a significant number of private school students. Finally, the program’s sunset provision should be eliminated so students will have access to educational choice beyond the 2022–23 school year.

Rules and Regulations

  • Income Limit: 300 percent x Poverty (400 percent to remain eligible year-to-year)
  • Prior Year Public School Requirement: No
  • Geographic Limit: None
  • Enrollment Cap: None
  • Scholarship Cap: State’s average operational expense per pupil ($12,973 in 2015–16)
  • Testing Mandates: State assessments
  • Credit Value: 75 percent
  • Total Credit Cap: $1 million
  • Budget Cap: $75 million

SGO Requirements

  • Use at least 95 percent of contributions for scholarships
  • Carry forward no more than 25 percent of the qualified contributions to the next calendar year of receipt, through 2021–22; no qualifying contributions may be carried forward beginning in 2022–23.
  • Award scholarships by priority group until April 1 of the year preceding the scholarship year
  • Must continue to fund a student’s scholarship if the student transfers to a different school during the academic year, with the scholarship amount prorated
  • Must provide a copy of a financial audit by an independent certified public accountant within 180 days after the end of the fiscal year to the Department of Revenue
  • Must assess and document each student’s eligibility for the academic year prior to granting a scholarship
  • Must grant scholarships only to eligible students
  • Must allow an eligible student to attend any qualified school of the student’s choosing, subject to the availability of funds
  • Must provide a report to the Department of Revenue listing the total certificates of receipt issues, total amount of qualified contributions, number of students utilizing scholarships and the name and address of each qualified school for which qualified students utilized scholarships
  • Make reasonable efforts to advertise the availability of scholarships to eligible students

Governing Statutes

N/A

Legal History

No legal challenges have been filed against this program.

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