Number of Nonpublic Schools Participating in AAA Grows

The number of students using options provided through the Alabama Accountability Act (AAA) aren’t yet publicly available, but with the 2014-2015 school year opening in the next few weeks, here’s an update on which nonpublic, a.k.a. private, schools have agreed to take students from “failing” public schools along with the scholarships from donations that were collected to pay for students’ tuition per the AAA.

Keep in mind that only 52 students were reported to have transferred to nonpublic schools at the start of the 2013-2014 school year, while 667 students transferred to a “non-failing” school within the same district.

The most recent list of “failing” schools was released in mid-January of this year.

School officials had until January 31 to notify parents of the “failing” school designation.

Parents had until May 2 to notify the school of their intent to transfer.

The list of participating schools has grown from 29 to 93 to 136 in the time period from August 2013 to April 2014 to July 2, 2014. The map below shows locations of participating schools (indicated by the red marker) and locations of public schools deemed “failing” under the Alabama Accountability Act (indicated by the orange school icon).

Zoom in and click on a marker to see the name and other information about the school.

What Did the Schools Agree to Do in Order to Participate?

There were hoops to jump through, certainly. Those hoops are outlined here. There are minimum requirements, such as being in existence for three years, a 180-day school year or its hourly equivalent, and being accredited by one of six agencies.

If previously-enrolled public school students were enrolled in a public school that was deemed to be “failing” under the AAA guidelines, and the student uses funds from a scholarship-granting organization (SGO) to attend the nonpublic school, the nonpublic participating school (referred to as a “qualifying nonpublic school” in the law) agrees to do the following for that particular student:

• Annually administer either the state achievement tests or nationally recognized norm-referenced tests that measure learning gains in math and language arts to all participating students in grades that require testing under the accountability testing laws of the state for public schools (currently grades 3 through 8).
• Allow the costs of the testing requirements to be covered by the educational scholarships distributed by the SGO.
• Provide the parents of each student who was tested with a copy of the results of the tests on an annual basis beginning with the first year of testing.
• Provide the test results to Alabama Department of Revenue (ADOR) on an annual basis, beginning with the first year of testing.
• Provide graduation rates of those students benefiting from education scholarships to the ADOR or an organization chosen by the state in a manner consistent with nationally recognized standards. [Taken verbatim from this form required to be completed when seeking participation status.]

How Does the Tuition for the Nonpublic Qualifying School Get Paid? 

Student’s Family Income Level Below 150% of Median Alabama Income

If the student’s family’s income is below 150% of the median Alabama income (around $62,000 for 2013), the student’s tuition can be paid through a scholarship from a Scholarship Granting Organization (SGO). Donations by individuals and corporations to the SGOs can reduce actual tax liability, meaning the income tax that the individual or corporation pays is reduced by the amount of the donation, with restrictions noted below.

For individuals, up to $7,500 can be claimed as a tax credit, but the total amount cannot be more than 50% of the taxpayer’s total liability.

For corporations, that total amount is not restricted, but is capped at 50% of the corporation’s tax liability.

The total amount of tax credits claimed across the state cannot exceed $25 million in a calendar year. ADOR has prescribed a method to allow taxpayers to reserve tax credits in order to keep track of the amounts. See “Reserving Tax Credits” on ADOR’s Accountability Act page.

Student’s Family Pays the Tuition Directly to a Nonpublic Qualifying School

For families that pay tuition directly to a nonpublic qualifying school, an amount equal to 80% of the state funding per student (approximately $3500 for the 2013 calendar year) can be deducted from the family’s actual income tax owed.

Scholarship-Granting Organizations (SGOs)- Updated List

Brendan Kirby of al.com wrote a great article in January 2014 explaining SGOs and their impact. Mike Cason, also of al.com, provided this update in March 2014.

There are currently nine SGOs that have been approved by the Alabama Department of Revenue (ADOR):

• AAA Scholarship Foundation, Inc.
• Chambers County Educational Foundation, Inc.
• Alabama Opportunity Scholarship Fund
• Beacons of Hope, Inc.
• Scholarships for Kids, Inc.
• Foundation for Educational Progress – The address given for this organization is for The Country Day School, but the Headmaster’s blog states they will utilize Scholarships for Kids, Inc. for scholarships.
• Rocket City Scholarship Granting Organization, Inc.
• Montessori Society of Huntsville
• One Hundred Black Men of Greater Mobile, Inc.

There is much more information to be shared about SGOs: how they operate, how strict the student income eligibility requirement is, how money that has been donated is distributed, and what SGOs are allowed to do with excess donations beyond the amounts required for tuition payments for students previously enrolled in “failing” schools (excess funds can be distributed after September 15). That’s next.