Student Funding

Scholarship organizations determine scholarship amounts, which are capped at the amount of a school’s tuition and fees or $8,500. Students attending “economically disadvantaged schools”—those where 75 percent or more of their student population are on scholarship—may receive scholarships worth up to $9,500. Students with special needs may receive up to $15,000, and special needs students attending economically disadvantaged schools may receive up to $16,000. Public school boards may set up tuition grant programs that allow students to attend a public or private school. For private schools under such programs, the tuition grant is limited to the state’s per-pupil subsidy amount.

Of the $55 million available for Opportunity Scholarships, at least $5 million be used for students from economically disadvantaged schools.

Student Eligibility

Students must live in a “low-achieving” school zone, with low-achieving defined as the state’s bottom 15 percent of public schools based on standardized test scores. Also, families are eligible only if their household incomes are less than $96,676 plus $17,017 for each child in the family in 2022-23, adjusted annually for inflation. Students with special needs are eligible for scholarships if they come from families who earn 150 percent of the baseline income level (for example, a family with one child may earn up to $170,540 in 2022-23) or less, and those with the most severe special needs are eligible if they come from families who earn 299 percent of the baseline income level ($339,942 for a one-child family in 2022-23) or less.

EdChoice Expert Feedback

Pennsylvania’s Opportunity Tax-Credit Scholarship program helps tens of thousands of students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity.

Eligibility for the scholarships is limited to students assigned to “low-achieving” schools (the bottom 15% on state tests). Only one in 10 Pennsylvania students are eligible for a scholarship and less than 5 percent of students statewide actually use a scholarship from one of Pennsylvania’s two tax-credit scholarship programs (including the Educational Improvement Tax Credit program).

The average scholarship size is about $2,000, which is only about 11 percent of the average expenditure per student at Pennsylvania’s district schools, though the cap on scholarship values is somewhat higher ($8,500 to $9,500 for most students or $15,000 to $16,000 for students with special needs). Tax credits are worth 75 percent or 90 percent of the value of the contributions to scholarship organizations, but only $55 million in tax credits are available annually, which is equivalent to only 0.17 percent of Pennsylvania’s total K–12 revenue.

In order to expand access to educational choice, Pennsylvania policymakers should dramatically increase the available tax credits and expand eligibility to all students (prioritizing scholarships based on need). The program could also be converted into an education savings account to ensure that all students have access to the education that’s the right fit for them, whether private school or a customized course of education.

Pennsylvania’s scholarship program generally avoids unnecessary and counterproductive regulations.

Rules and Regulations

• Income Limit: $96,676 plus $17,017 per child (higher for students with special needs)
• Prior Year Public School Requirement: None
• Geographic Limit: Statewide
• Enrollment Cap: None
• Scholarship Cap: $8,500 / $9,500 (economically disadvantaged school) / $15/16,000 (special needs)
• Testing Mandates: None
• Credit Value: 75 / 90 percent
• Per Donor Credit Cap: $750,000
• Budget Cap: $55 million
• *Limited to students in low-performing schools

SO Requirements:

• Use at least 80 percent of contributions for scholarships
• Make scholarships available to more than one school
• Submit annual report detailing donations received and scholarships awarded to the state, including number of scholarships awarded and total and average amounts of scholarships awarded to students from households with a family income that does not exceed 185 percent of the federal poverty guideline ($49,025 for a family of four in 2021–22)
• Submit a copy of a financial audit conducted by a certified accounting firm

Governing Statutes

24 Pa. Const. Stat. § 20-2009B

Legal History

No legal challenges have been filed against the program.