Student Funding

School tuition organizations (STOs) may award scholarships up to the private school tuition or 90 percent of the state funding that otherwise would go to that pupil had he or she remained in public school, whichever is less. That amount varies depending on the services the student’s disability requires. The total credits claimed cannot exceed $6 million in a given year.  

(Last updated December 18, 2023) 

Student Eligibility

Students are eligible if they (1) have a Multidisciplinary Evaluation Team (MET) or Individualized Education Plan (IEP) from an Arizona public school district, (2) have a 504 plan from an Arizona public school district or (3) are now or have ever been in the Arizona foster care system.  

(Last updated December 18, 2023) 

EdChoice Expert Feedback

Arizona’s tax-credit scholarship program for disabled and displaced students helps over 1,000 students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity. 

Students with special needs and those in foster care are eligible to receive a tax-credit scholarship. Slightly more than 10 percent of Arizona students are eligible to receive a scholarship via this program, and all students are eligible to receive a scholarship via the individual-donor scholarship program.  

Statewide, fewer than 10 percent of students participate in one of Arizona’s private educational choice options (including the universal-eligibility Original Individual-Donor Tax-Credit Scholarship Program, the Low-Income Corporate-Donor Tax-Credit Scholarship Program, “Switcher” Tax-Credit Scholarship Program, and the Empowerment Scholarship Account Program).   

The average scholarship size is about $3,800, which is approximately 39 percent of the average expenditure per student at Arizona’s district schools. There is no cap on scholarship values and students may receive more than one scholarship. Students from low-income families and those who have switched from the public school system may also receive scholarships via the other tax-credit scholarship programs in addition to the original scholarship program that is available to all students. Tax credits are worth 100 percent of the value of the contributions to scholarship organizations, but only $6 million in tax credits are available annually, which is equivalent to only 0.06% of Arizona’s total K–12 current expenditures.  

In order to expand access to educational choice, Arizona policymakers should significantly increase the amount of available tax credits. 

Arizona’s scholarship program generally avoids unnecessary and counterproductive regulations.  

(Last updated December 18, 2023) 

Rules and Regulations

• Income Limit: None
• Prior Year Public School Requirement: None
• Geographic Limit: Statewide
• Enrollment Cap: None
• Scholarship Cap: 90 percent State Funding
• Testing Mandates: None
• Credit Value: 100 percent
• Per Donor Credit Cap: None
• Total Tax Credit Cap: $6 million
• *Limited to students with special needs and students in foster care

STO Requirements:

• Use at least 90 percent of contributions for scholarships
• Make scholarships available for more than one school
• Allow the state to verify that scholarships have been awarded to students attending a qualified school
  • Annually report to the state: Data on accepted contributions, grants awarded, and the amount of money being held for identified student scholarships in future years
  • a list of participating schools with the number and dollar amount of scholarship awards received
  • the salary of the STO’s top three officials for the fiscal year and proof of independent review of financial statements by a certified public accountant

(Last updated December 18, 2023) 

Governing Statutes

Ariz. Rev. Stat. §§ 15-891; 43-1184; 43-1501 through 1507; and 20-224.07

(Last updated December 18, 2023) 

Legal History

No legal challenges have been filed against the program.

(Last updated January 17, 2023)