Student Funding

Use of Funds 

Qualifying expenses include tuition, fees, and district transportation. 

Funding Amount and Source 

Qualifying private donors contribute to approved Scholarship Organizations. Each Scholarship Organization determines scholarship amounts, which are capped at the amount of the school’s tuition and fees, or $8,500 for students without a disability and $15,000 for students with a disability. Students attending “economically disadvantaged schools”—those where 51% or more of students received an EITC/OSTC scholarship of at least $500 (K–8) or $1,000 (9–12) during the previous school year—may receive scholarships worth up to $10,500 for elementary students and $12,500 for secondary students. Students with special needs may receive up to $15,000, and students with special needs attending economically disadvantaged schools may receive up to $19,000. Public school boards may set up tuition grant programs that allow students to attend a public or private school. For private schools under such programs, the tuition grant is limited to the state’s per-pupil subsidy amount. 

Tax credits are worth 75% of the contribution; however, a 90% credit can be claimed if the corporation commits to two consecutive annual contributions. In either case, the maximum tax credit is $750,000 per company; however, this cap is lifted from October 1 through November 30 during years when there are unclaimed credits. Credits are awarded to companies on a first-come, first-served basis until the $90 million cap is reached. 

(Last updated July 26, 2024)  

 

Student Eligibility

Students must live in a “low-achieving” school zone, with low-achieving defined as the state’s bottom 15% of public schools based on standardized test scores. Also, families are eligible only if their household incomes are less than $112,348 plus $19,775 for each child in the family in 2024–2025, adjusted annually for inflation. Students with special needs are eligible for scholarships if they come from families that earn 150% of the baseline income level (for example, a family with one child may earn up to $142,011 in 2024–2025) or less, and those with the most severe special needs are eligible if they come from families who earn 299% of the baseline income level ($171,475 for a one-child family in 2024–2025) or less. Scholarship Organizations must give preference to applications from students who received an application in the prior year or students whose household income does not exceed 185% of the Federal Poverty Level. 

 (Last updated July 26, 2024) 

EdChoice Expert Feedback

Pennsylvania’s Opportunity Tax-Credit Scholarship program helps thousands of students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity. Eligibility for the scholarships is limited to students assigned to “low-achieving” schools (the bottom 15% on state tests). Less than one in 10 Pennsylvania students are eligible for a scholarship and less than five percent of students statewide actually use a scholarship from one of Pennsylvania’s two tax-credit scholarship programs (including the Educational Improvement Tax Credit program). The average scholarship size is about $1,900, which is only about 15 percent of the average expenditure per student at Pennsylvania’s district schools, though the cap on scholarship values is somewhat higher ($8,500 to $12,500 for most students or $15,000 to $19,000 for students with special needs). Tax credits are worth 75 percent or 90 percent of the value of the contributions to scholarship organizations, but only $85 million in tax credits are available annually, which is equivalent to only 0.17 percent of Pennsylvania’s total K–12 revenue. To expand access to educational choice, Pennsylvania policymakers should dramatically increase the available tax credits and expand eligibility to all students (prioritizing scholarships based on need). The program could also be converted into an education savings account to ensure that all students have access to the education that’s the right fit for them, whether private school or a customized course of education. Pennsylvania’s scholarship program generally avoids unnecessary and counterproductive regulations. (Last updated December 18, 2023)  

Rules and Regulations

Program Guidelines

• Income Limit: $112,348 plus $19,775 per child (higher for students with special needs)
• Prior Year Public School Requirement: None
• Enrollment Cap: None
• Scholarship Cap: $10,500 / $12,500 (zoned school) / $15,000 /19,000 (special needs)
• Testing Mandates: None
• Credit Value: 75%/ 90% with a commitment to the same contribution amount for two consecutive years; for economically disadvantaged scholarships, 85% / 99% with a commitment to the same contribution amount for two consecutive years
• Per Donor Credit Cap: $750,000
• Total Tax Credit Cap/Budget Cap: $90 million
• Special Needs Pathway: Priority

Participant and Family Guidelines

• Click Here for the Program Administrator’s Parent Handbook
• Education Requirements: N/A
• Parent Supplemented Funds/Scholarships: Allowed
• Miscellaneous: N/A

Education Provider Guidelines

• Accreditation/Approval: State or regional
• Employment Standards: N/A
• Nondiscrimination: Comply with state and federal nondiscrimination laws
• Calendar/Curriculum/Attendance: N/A
• Financial: N/A
• Miscellaneous: Do not recruit a student for athletic purposes

Scholarship Organization Guidelines

• Scholarship to Contribution Ratio: Use at least 90% of contributions for scholarships
• State Reporting: Submit an annual report to the state detailing donations received and scholarships awarded to the state, including number of scholarships awarded and total and average amounts of scholarships awarded to students from households with a family income that does not exceed 185% of the federal poverty guideline ($57,720 for a family of four in 2024–25)
• Financial: Submit a copy of a financial audit conducted by a certified accounting firm
• Award Priority: Renewing students
• Miscellaneous:
  • Exempt from federal income tax under 501(c)(3) of the Internal Revenue Code
  • Make scholarships available to more than one school

(Last updated September 27, 2024)

Governing Statutes

24 Pa. Stat. §§ 20-2001-B through 2013-B 

(Last updated July 26, 2024) 

Legal History

No legal challenges have been filed against the program.

(Last updated July 26, 2024)