What you need to know about Illinois’ new tax credit scholarship program

Illinois launched into uncharted waters this year as it launched a new tax credit scholarship program, becoming the country’s 18th state to use public money to pay for private schools.

While the program will help poor students get a chance at attending private schools, the long-term effects — and the impacts on public school funding — are unclear.

How can my kids get scholarships?

There are income guidelines for all children set to enter grades K-12. An eligible family of four can earn up to $73,800, or three times the federal poverty level. Through April, priority will be given to families earning just 185% of the poverty level, or $45,510 for four, or those residing within a “focus district” including Chicago. Then, students have to apply through one or more qualifying scholarship-granting organizations according to where they live in Illinois.

Money will be given out to eligible students on a first-come, first-served basis statewide starting in February, so interested families should act quickly. Students can apply to as many organizations as they like but can only accept one scholarship. And they must apply separately to the schools. Cook County residents are part of Region 1 and can apply through six scholarship organizations, whose dates vary:

Currently open: Highsight

Jan. 22: ACSI Children’s Tuition Fund of Illinois

Jan. 22, 8 a.m.: Big Shoulders Fund

Jan 24: Empower Illinois

Efforts to reach two other organizations approved by the Department of Revenue were unsuccessful. No scholarship information appeared on their websites.

How much money is available?

In total, $100 million could be at stake if donors max out the state credit, though the organizations will keep 5 percent of what’s donated through them for administrative costs. As of late last week, $38 million had been pledged, according to Myles Mendoza of Empower Illinois, one of the scholarship groups. Per child, the scholarship amount will depend partly on the child’s needs, the school district’s tuition and the cost of the school. All students qualify for up to about $13,000 each. Students considered gifted may get 1.1 times that amount, and English-language learners 1.2 times. Special education students qualify for up to double. In the end, scholarship recipients will receive the lower of either what tuition costs or the tuition equivalent of their local public school’s tuition.

Which schools will accept the scholarships?

The schools must be private and be actual schools that charge tuition, so the scholarships can’t be used for homeschooling costs. The Illinois State Board of Education also must also recognize the school; its list can be found here. Empower Illinois also is keeping a list here.

To be recognized, a school has to answer a series of questions from the state about its school policies, curricula, personnel, and student health and safety, according to ISBE. The school must allow visits every few years, and also comply with other state statutes and regulations. It’s worth noting that ISBE recognition is different from academic-based accreditation determined by an independent third party, and that schools accepting the tax credit scholarships are not required to hold any accreditation.

How did this program come to Illinois?

The tax credit program was ultimately slipped into what became the school funding bill — which was intended to put new money for education into the state’s poorest and neediest districts. The addition of private school benefits in a public school funding bill was viewed as unusual, and came about late in the game, but Cardinal Blase Cupich, head of the powerful Catholic church in Chicago, gave the program a major boost.

What if I want to donate and take a tax credit?

Donors who want to take advantage of the tax credits must register with the Illinois Department of Revenue and reserve their credit, up to $1 million per individual. Once approved, they can write the check. Donations cannot be earmarked for particular students, but they can be sent to a specific schools or network of schools if made by an individual. Corporate donations go into a general fund. Donors can take a $.75 credit on every dollar they give until the $75 million in credits is exhausted.

Sounds great. What’s the downside?

The state has to come up with the $75 million in new revenue to offset the credits. Critics, like unions, say the “back-door voucher” program will hurt traditional public schools by poaching students. Schools without a large donor base may find themselves with fewer scholarship students than, say, Catholic schools in Chicago since money will be doled out first from school fundraising, then the school system’s, before it comes out of the general pot.