The total scholarship for students without special needs cannot exceed the actual education expenses of the student or 100 percent of the per-pupil amount distributed to the local public school by the state, whichever is less. Students with special needs may be funded with scholarships worth up to 300 percent of the commonwealth’s per-pupil amount if they attend schools specifically for students with special needs.

Students must come from households where family income is less than 300 percent of the federal poverty line ($75,300 for a family of four in 2018–19). Students with special needs also are eligible and do not have an income limitation. Students must either be enrollees in A) Kindergarten, prekindergarten, or first grade, or B) a public school student the previous school year, a previous scholarship recipient or a new resident of Virginia.

Both the restrictive eligibility requirements and the low overall funding cap of $25 million limit the ability of Virginia’s tax-credit scholarships to serve students. Moreover, the credit value is only 65 percent of the contribution amount, which makes it difficult to attract sufficient donations. The program is limited further by its per-pupil funding, which is only 28 percent of state per-student spending on public school students. On a positive note, the program requires participating students to take a nationally norm-referenced test chosen by the school, rather than the standardized test mandated by the state. Virginia should consider increasing the funding and credit caps for this program, expand student eligibility and increase the scholarship size.

• Income Limit: 300 percent x Poverty (400 percent for students with special needs)
• Prior Year Public School Requirement: 100 percent of state funding
• Geographic Limit: Statewide
• Enrollment Cap: None
• Scholarship Cap: 100 percent of state funding
• Testing Mandates: National
• Credit Value: 65 percent
• Total Credit Cap: Yes (individual) / None (business)
• Budget Cap: $25 million

Scholarship Foundation Requirements:

• Be approved by the state
• Use at least 90 percent of contributions for scholarships
• Make scholarships available for more than one school
• Comply with Title VI of the Civil Rights Act of 1964
• Conduct an annual audit, review or compilation on tax credit-derived funds
• Submit to the state:
  • Total number and dollar amount of contributions received
  • Dates when such contributions were received
  • Total number and dollar amount of scholarships awarded

Code of Va. §§ 58.1-439.25-28

No legal challenges have been filed against the program.