Schools gearing up for 2018 tax credit scholarships

Catholic schools across the Archdiocese of Chicago are hoping to welcome more students next year and some existing Catholic school families are looking for a financial break as a new state law that offers tax credits for donations to private scholarship funds goes into effect.

The scholarships will allow low- and middle-income families to get help to attend the schools of their choice. While families with incomes up to $73,800 for family of four, or 400 percent of the poverty level, will be eligible for some help, families with lower incomes get priority and can receive more assistance — up to 100 percent of required tuition and fees at the school of their choice.

The law makes Illinois the 18th state to allow what are called “tax credit scholarships” to kindergarten through high school students who attend private schools.

Rather than the state providing vouchers directly to students, aid will come from third-party, non-profit organizations, which can accept donations from individuals and corporations. Those donations will qualify for a 75 percent tax credit from the state, meaning that someone who donates $1,000 will receive a $750 tax credit.

The total amount of the scholarships is capped at $100 million per year, and it is supposed to be divided geographically, with 51 percent of the funds going to help students in Cook County, and about 10 percent going to students in Lake County, according to Jim Rigg, superintendent of schools in the Archdiocese of Chicago.

While Rigg said he can’t predict how many students will use tax credit scholarships in Catholic schools, or how many will be new students versus current students, he expects there will be a noticeable effect.

“We do have most of the private schools in this area that enroll low- and middle-income kids,” he said. “It is our mission to serve all who come to us, with a preferential option for the poor.”

He hopes the scholarships will help families that want a Catholic education for the children achieve that.

“Affordability is the No. 1 reason families do not choose our schools, and the No. 1 reason why families leave in the middle of a child’s education,” he said.
Schools do their best to keep tuition affordable, he said, with elementary tuition averaging about $5,000 a year while the average per-pupil cost is about $8,000 a year. 

Proponents of private schools, including the Catholic Conference of Illinois, have been pushing for tax credit scholarships for years, Rigg said, but there was little action until this summer, when it came together as part of budget deal. 

The law passed at the end of August, leaving the state, as well as schools and their supporters, little time to create the mechanism by which the money will be raised and scholarships will be awarded.

Rigg said the Office for Catholic Schools is directing donors to Empower Illinois, the scholarship-granting organization that is working with all six Catholic dioceses in the state, as well as groups of Jewish schools, Lutheran schools and other institutions.

Myles Mendoza, executive director of Empower Illinois, said the organization will be ready to accept both donations and scholarship applications for the 2018-2019 school year in January.

Empower Illinois was known until December as One Chance Illinois, an advocacy organization that helped work with private education providers to pass the law. It then reinvented itself as a scholarship provider, as it could use its existing non-profit status.

The archdiocese most likely will work with other scholarship-granting organizations as well once they get started, Rigg said, but with donations and scholarship applications starting in January, it wanted a partner that was reliable and able to get ready to go quickly.

Rigg said the archdiocesan Office of Stewardship and Development has been working to identify potential donors to the scholarship fund so that money will be available this year. Individual donors may designate their gifts to benefit individual schools — for example, a parochial school in their own parish, or their high school alma mater — or to groups of schools, however they wish to define them. Corporate donations may not be restricted.

Mendoza said that’s how the organization is intended to work: as a facilitator for education providers and their communities. Schools or groups of schools will develop relationships with donors, and direct families who want to apply for scholarships to the website for Empower Illinois.

“We want to help them build stronger communities,” Mendoza said. “So we’re doing the nitty-gritty work to make this happen.”

There could be up to 15,000 scholarships granted across the state next year, depending on the amount donated and the number of applications. Each of those families will likely be in touch with the scholarship-granting organization two or three times, or even more. That means planning for — and having online and telephone support capacity — for more than 90,000 contacts, he said.

At the same time, Empower Illinois plans to continue its advocacy to try to make the tax-credit scholarships permanent and to expand the program.

“So far, every state that’s done this has maintained or expanded their programs,” Mendoza said. “We want Illinois to do the same thing.”

Rigg said the Office for Catholic Schools will be making sure all of its schools are getting information out to families of current and potential students, as well as to potential donors. They also are helping schools prepare for more students next year.

For more information, visit schools.archchicago.org.