Student Funding

The maximum voucher amount allowed is90 percent of the average per pupil state K-12 allocation based on the prior fiscal year, not to exceed the private school’s actual tuition and fees. This maximum amount is reserved for students from families earning at or below the federal free and reduced-price lunch (FRL) program ($51,338 in 2022-23). Families earning above this threshold up to 175 percent of FRL ($89,841 for a family of four in 2022-23) may qualify for vouchers worth up to 90 percent of tuition. The vouchers may be used for tuition, transportation, equipment or any other items required by qualifying private schools. Total funding increased to $84.84 million for 2021–22 and to 94.84 million for fiscal year 2022-23. Beginning in year 2023-24, funding will be appropriated at $120,540,000 and increase yearly by $15,000,000.

Student Eligibility

Students are eligible to receive vouchers if their household income does not exceed 175 percent of FRL ($89,841 for a family of four in 2022-23). Students must also have attended a public school during the previous semester. Kindergartners, first graders, foster children, dependents of full-time active military members and children that have been adopted in the past year qualify for vouchers without having to attend a public school.

EdChoice Expert Feedback

North Carolina’s voucher program for students helps more than ten thousand students access schools that are the right fit for them, but policymakers could do much more to expand educational opportunity.

Eligibility for the voucher is limited to 323 percent of the federal poverty line (175% of the income limits for the federal free-and-reduced lunch program). For school year 2021-2022, Roughly four in 10 North Carolina’s students were eligible for a scholarship and less than 1 percent of students statewide actually use one of North Carolina’s three educational choice programs (including the Special Education Scholarship Grants for Children with Disabilities and Personal Education Savings Accounts).

The average voucher value is about $4,000, which is about 41 percent of the average expenditure per student at North Carolina’s district schools.

In order to expand access to educational choice, North Carolina policymakers should expand eligibility to all students.

North Carolina’s voucher program generally avoids unnecessary and counterproductive regulations.

Rules and Regulations

• Income Limit: 175 percent x FRL
• Prior Year Public School Requirement: Yes, with exceptions
• Geographic Limit: Statewide
• Enrollment Cap: None
• Budget Cap: $84.8 million (2021–22)
• Voucher Cap: 90 percent of the average per pupil state K-12 allocation based on the prior fiscal year
• Testing Mandates: Nationally norm-referenced tests

School Requirements:

• Not discriminate with respect to the categories listed in 42 U.S.C. § 2000d, as that statute read on January 1, 2014
• Comply with health and safety requirements
• Be accredited by the state board of education, a national or regional accrediting agency or an active member of the North Carolina Association of Independent Schools, or receive no funding from state government
• Provide the state with documentation for tuition and fees charged
• Conduct criminal background check on staff member with highest decision-making authority
• Provide parents with an annual written explanation of the student’s progress, including scores on standardized achievement tests
• Annually administer a nationally standardized test to voucher students and provide the test results to the state
• Provide graduation rates of voucher students to the state
• Contract with a certified public accountant to perform a financial review for schools that accept students who receive more than $300,000 in voucher grants

Governing Statutes

N.C. Rev. Stat. §§ 115C-562.1 through 562.8

Legal History

On July 23, 2015, the North Carolina Supreme Court in Hart v. State upheld the constitutionality of all aspects of the state’s voucher for children of low-income households. The lower court decision in Hart v.State, No. 13 CVS 16771 (August 28, 2014), was overturned.Hart v. State, 774 S.E.2d 281 (N.C. 2015); Richardson v. State,774 S.E.2d 304 (2015)

On July 27, 2020, Tamika Walker, president of the North Carolina Association of Educators teachers’ union, and others sued the state, alleging that the Opportunity Scholarships voucher program, as implemented, funds religious discrimination, has no meaningful educational requirements, discriminates against students based on “homosexuality, bisexuality, or gender non-conformity,” and does not accomplish a public purpose. This case is pending at the trial court. Kelly v. State and North Carolina State Education Assistance Authority, Wake County General Court of Justice, Superior Court Div., File no. 20 CVS 8346