When the Alabama Accountability Act was passed earlier this year, the legislation not only opened up new doors to students in failing schools, but it also made it possible to add cash to people’s wallets who are willing to help.
The AAA allows parents to take their children out of failing schools, place them in private schools and then receive a $3,500 tax credit per child. Also, parents who already send their children to non-public schools, but are zoned for failing schools, can receive the tax credit.
It also opens up an avenue for tax credits to those individuals willing to help fund the program. People who donate to the scholarship program created under the AAA are able to get that money back in part through tax credits from the state.
The scholarship program allows donors to claim a tax credit against their state income tax for up to 50 percent of their liability, while individuals can receive up to a maximum tax credit of $7,500.
Scholarship for Kids, Inc. is one of the non-profits created to serve as a scholarship granting organization (SGO), which is a non-profit group the works with donors and schools.
Jenny McCain, president of Scholarships for Kids, was in Mobile on Nov. 26 to talk with Prichard Preparatory School about scholarships for the school. She also wanted to get the word out about the opportunity for tax credits.
“With the Alabama Accountability Act, the state allowed for up to $25 million in state tax credit on a first-come-first-serve basis for those who donate in order for scholarships to be created,” McCain said. “Funding scholarships through donors for a school like Prichard Preparatory means that instead of fundraising for scholarships, the school can have Scholarships for Kids do that.”
Prichard Preparatory School’s tuition costs $8,000 per year for each child, but through donations and fundraising that amount is reduced to $2,000 per year for the parent to pay.
The funding from scholarships would allow more children to go to the school since Prichard Preparatory would not have to find the $6,000 needed for each student.
To date, there is only $6 million in available tax credit left in the program. The $25 million cap resets on Jan. 1, 2014.
While Scholarships for Kids helps schools receive scholarships, they are not responsible for handing those scholarships out. The schools themselves will do that once they know how many are available for the institution.
However, McCain said during the donation process, a person or corporation can tag the money for a certain school.
“If someone wants to donate, but wants to make sure the money goes to Prichard Preparatory for instance, then that can be earmarked for the school,” she said. “That money will be allocated to the school for scholarships.”
The school doesn’t know the amount of scholarships they will be given by the state, but trusts that there will be room for people interested in sending their children to Prichard Preparatory.
For parents interested in applying for scholarships, they should contact the school when the scholarships are released by the state. The deadline has not yet been set.