Tax Credit Will Boost Catholic School Scholarships
Published: October 30, 2008
Queen of Angels kindergarten students Grace Allen, left, and Justin Perry work at their desk. (Photo by Michael Alexander)
ATLANTA—Georgians who want to contribute to faith-based or private education now have a new state tax credit option. And families who might not have previously qualified for financial aid for these schools now have another source to draw from to help finance their children’s education.
The Georgia Private School Tax Credit law, originally known as House Bill 1133, provides an income tax credit for Georgians or corporations who want to donate to a Student Scholarship Organization (SSO) for students in public schools or just starting school who want to attend faith-based or private accredited educational institutions. The legislation was passed during the 2008 legislative session.
SSOs are 501(c)(3) charitable organizations designed to help cover the cost of private school education.
The Georgia program—and state legislation—is modeled after similar successful educational tax credit programs in Pennsylvania, Florida, Rhode Island and Wisconsin, said Frank Mulcahy, executive director of the Georgia Catholic Conference. As a lobbyist, Mulcahy represents the Atlanta Archdiocese and the Savannah Diocese in public policy matters.
The Atlanta and Savannah dioceses have formed the nonprofit G.R.A.C.E. Scholars, Inc. for scholarship donations to attend Catholic schools in Georgia. The name is an acronym for Georgia Residents Assisting Children’s Education. The organization’s board of directors is comprised of Atlanta Archbishop Wilton D. Gregory, Savannah Bishop J. Kevin Boland, their respective Catholic school superintendents, Diane Starkovich in Atlanta and Sister Rose Mary Collins, SSJ, in Savannah, and Brad Wilson, chief financial officer of the Atlanta Archdiocese.
Any individual, married couple or corporation who has tax liability to the state of Georgia can invest in G.R.A.C.E. Scholars. In turn, donors know at least 90 percent of the funds will be spent assisting qualified families who enroll a child in a Georgia Catholic school with tuition.
This is one of nine SSOs formed so far in Georgia to provide scholarships to accredited non-public schools. All will be drawing from the same $50 million pool allocated by the state for providing tax credits to donors in a calendar year. Approved SSOs are listed on the state Department of Education Web site.
When fully funded, the G.R.A.C.E. Scholars SSO also has the added benefit of providing more financial aid for families who want to send their children to a Catholic school but for financial reasons have not been able to, said Starkovich.
“We really believe that the parents are the first educators of our children; this will give them the opportunity to select or choose the school that’s most appropriate for their child,” she said.
The G.R.A.C.E. scholarships would be available to low- or middle-income families who currently have a child or children in the public school system but would like to send their children to a Georgia Catholic school or to families who would like their child ready to start a qualified kindergarten or pre-kindergarten to attend a Catholic school. The scholarship could be used at one of 44 Catholic elementary and high schools in the state.
The student would have to be first accepted to the Catholic school before the parents can apply for the scholarship, Starkovich said. If the students are awarded a G.R.A.C.E scholarship, the checks are sent directly to the parent and not the school. Parents then endorse the check and send it to the school, where it will be applied to their tuition costs.
The amount of tuition assistance will vary; much of it depends on how much is donated to the scholarship fund. One of the qualifying requirements is that the family’s federally adjusted gross income cannot exceed $90,000.
The scholarships will be available in late March or early April, after school acceptance packets are sent out. The number of scholarships awarded will depend on several factors, said Starkovich. “The first year will be challenging as we put all the processes in place and get our donors.”
But she is excited about the possibilities. “We hope this will be able to spread tuition out more and provide more assistance to the middle class who often don’t qualify for needs-based aid. The fact is tuition is just expensive.”
Any family, individual or corporation in the state can donate to a particular SSO, but they can’t direct who gets the scholarships, said Mulcahy.
For donors who want a tax credit for their Georgia tax return, the process works like this:
Prospective donors to G.R.A.C.E. must first contact the organization and express their intent to make a contribution. Then they must file a form with the Georgia Department of Revenue saying they’re going to make a contribution and will be taking a tax credit on their return.
Because there is $50 million in tax credits allotted per calendar year for all SSOs, it is a first-come, first-served application. Taxpayers are notified within 30 days if there are available tax credit funds for their proposed donation.
If approved, the donor must then send a check to G.R.A.C.E Scholars within 30 days of their Georgia Department of Revenue acceptance. A receipt for the donation is then sent to the donor to file along with their state taxes.
“If people want to take advantage of it for this tax season, they need to act quickly,” said Dan Wiseman, coordinator of special projects for the Archdiocese of Atlanta Office of Catholic Schools.
However, donations will be accepted year-round.
Wiseman said it is anticipated that most families seeking scholarships will have children just starting school. It is also designed to assist families making the transition from the public system to the private system. While students already in Catholic schools in Georgia are not eligible to apply for this scholarship fund, younger siblings just beginning school could be eligible.
For students already in Catholic schools, each school in the Archdiocese of Atlanta has access to tuition assistance funds for families. Last year the schools gave out in excess of $6 million to qualified families within the Archdiocese of Atlanta, Wiseman said.
For more information on G.R.A.C.E. Scholars, or for information on how the tax credit works, go to www.gracescholars.org or contact Dan Wiseman at (404) 885-7491 or firstname.lastname@example.org.