Private school tuition loophole exploited

Officials at two local private schools contacted by The Atlanta Journal-Constitution acknowledged that some of their students are using the loophole to get scholarship money to cut their tuition costs.

Public school officials aren’t sure how many students at other private schools are doing the same thing. Without knowing, public schools may have assigned teachers, classrooms and other resources to children who won’t attend.

Critics of the program say it has essentially turned into a way for state taxpayers to subsidize children already attending private schools.

And some public school officials say they are forced, by law, to play along and enroll students they know won’t attend.

“There is definitely a loophole in the law, and they are taking full advantage of it,” said William Cason, superintendent of the public school system in Valdosta. “It just seems to me to be dishonest.”

John Newcomer, a member of the Horizon Christian Academy board in Cumming, called the scholarship program “a way for us to get some of the tax dollars that are taken from us.”

The school’s May newsletter promoted it as “a way for you to have state funds pay your child’s tuition.”

“The state kind of implemented a voucher system in disguise,” Newcomer said.

More than 1.6 million children attend public k-12 schools in Georgia. About 107,000 attended private schools last year.

Private school tuition can run more than $15,000 a year, although the cost at most schools is far less. Still, many parents who would like to send children to private schools can’t afford it.

So legislators approved a plan in 2008 that sets up a system of tax credits to fund private school scholarships through private donations. Donors get to pay a smaller state tax bill, and children get tuition money.

The state set aside $50 million for the tax credits. Taxpayers or corporations who give to a scholarship organization can get a dollar-for-dollar credit against state income taxes. For example, a married couple who give $2,500 can take $2,500 off their annual state tax bill — the most allowed for couples. Individual taxpayers are capped at $1,000, and corporations can take a credit of up to 75 percent of their total state tax liability.

According to the state Department of Education, 19 scholarship organizations are participating in the program, including one run by a chief legislative advocate of the effort, House Rules Chairman Earl Ehrhart (R-Powder Springs). Organizations collecting the donations get to keep 10 percent of the money for administration. They then dole out the money to the schools and the schools decide which students get scholarships.

About $5 million was given for the scholarships last year by 1,855 donors, according to the Department of Revenue. Officials couldn’t say how many scholarships were given out.

Parents of private school students may donate money to one of the scholarship funds and designate that the money go to their school. However, they are not allowed to designate that the tax-subsidized donation go directly toward their child’s tuition.

Republican leaders like Ehrhart sold the program as a way to give parents with children in bad public schools the financial help they need to be able to send their kids to private schools.

Public education and teacher groups opposed the program because they feared it would open the door to taxpayer-funded private school vouchers.

It is unclear how many private school parents around the state are using the scholarship loophole.

Public school officials in Forsyth and Barrow counties and Valdosta told the AJC they have had private school students sign up or ask to sign up just so they can qualify for the private school scholarships.

Barrow County School Superintendent Ron Sanders said he estimates that the system has had more than 100 private school students enroll in his system so they can qualify for the scholarship money.

Sue Derison, director of information services for Forsyth County schools, estimates that her system has had 65 private school students enroll since the law took effect.

In Forsyth County, the system has enrolled students who have never been in the public school system. But school officials decided not to put information about those students into the school district’s system until they show up on the first day of school.

Other systems told the AJC they are seeing an uptick in private school students enrolling in their schools, but they attributed at least some of the growth to the sour economy.

Ehrhart scoffed at reports of private school families using the loophole to get the scholarship.

“That sounds like left-wingers who don’t like the program,” he said.

Ehrhart, who sits on the board of Marietta’s Dominion Christian High School, said the purpose of the law was not to give scholarship money to students already attending private schools unless they first attended a public school.

He said it’s legal for private school parents to use the loophole, but he added that any that are doing so are “an anomaly. There is no conspiracy there.”

Another law providing for private school scholarships for students with disabilities requires those children to attend a public school for a year before becoming eligible, according to the state Department of Education.

Sanders and other public school officials say it costs money to enroll students, and some schools could be assigning teachers or setting aside space for students who may never attend.

Dana Tofig, a DOE spokesman, said the department hopes parents enrolling children in public schools solely to be eligible for the scholarship let school systems know that’s what they are doing.

Public school officials say at least some of the private school parents are doing just that.

“I appreciate their honesty, but it’s their honesty that brought it to light,” said Ken Greene, director of student services for Barrow County Schools in Winder.

Newcomer said about 30 of Horizon Christian’s 300 students have gotten scholarships. He said the school’s students will receive about $100,000 this year from the program.

“It’s a great program. It helps a lot of families that wouldn’t be able to give their children the faith-based education they think their children should have.”

At Bethlehem Christian Academy in Barrow County, about 10 of the 330 students are receiving scholarship money, said Anthony Torbett, chairman of the private school’s board. A handful, he estimates, have used the loophole to qualify.

“I think the word is starting to get out, and people are starting to look into it,” Torbett said.

Georgia has been down the road of private school scholarships or vouchers before. In 1961, state officials passed a law to provide vouchers to parents who wanted their kids out of desegregated public schools. Hundreds of students received the vouchers, but it fell into disuse after reviews showed many of the parents getting the tuition help had previously been sending their children to private schools.

Tim Callahan of the Professional Association of Georgia Educators teacher group said his organization always saw the recent scholarship law as a “boondoggle to subsidize students already going to private schools.

“I think our opposition was warranted then, and this just underscores it,” he said.