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Health & Fitness

How much Student Scholarship Organizations cost?

How Student Scholarship Organizations SSOs cost, to have public school students to go to private schools by tax credit vouchers.

As humans we are a covenant species, which relies on written words to justify our belief in an ideology or legal system.  Most ideals that become rules and laws limit flexibility and efficiency, but also liability against lawsuits.  Not all laws control behavior, only justify punishment or rights.

Since 2008, Georgia has experimented with the ideal that became law of Student Scholarship Organizations, (SSOs) to help public school students to attend private schools.  What is the cost of this ideal, made into law?

Representative Earl Ehrhart (R – Powder Springs) a sponsor of these SSO laws, tells Patch this program:

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“provide a clear savings to the public treasury by educating Georgia's children for much less than what the public system spends.  $11K v. $4K on average.  This is simple math and truly a fact as much as the opponents do not want to accept it.  It is actually quite frightening that these public education bureaucrats who are responsible for children in Georgia cannot do such basic sums.  I for one will leave it the parents to decide on who does provide a better educational product.”

When asked by several emails where he got these statistics of $11K vs. $4K, there was no response.

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In 2011, Ehrhart said on the Georgia House floor that SSOs saves $40M each year.  The state spends $7,500 per public school student a year, while the average private scholarship spends $4,500, a $3,000 savings.  Again, where are the statistics?

Understandable, parents should “decide” a “better educational product,” but that choice is expensive.  Otherwise, every Georgian would be going to private schools.  We all could “decide” to buy a Lamborghini or Tesla, but we all cannot afford it.  Choice is based on our income.

What is the cost of this private “educational product?”

Holy Innocents' Episcopal School in Atlanta, costs $11,000 for Early Learners/Pre-Kindergarten and $21,510 for grades 6-12.

Wesleyan School in Peachtree Corners, costs $14,900 for Kindergarten and $19,965 for grades 7-12.

The Lovett School in Atlanta, costs $19,210 for Kindergarten, $22,290 for grades 6-11 and $22,740 for 12th grade.

Other than cost of private schools and their savings, what about the cost of the tax credit?

The 2011 Georgia Department of Revenue's (GADOR) Qualified Education Expense Credit (QEEC) report, shows 17,042 individuals donated $31,095,340 for this tax credit.

There were 196 total corporate/fiduciary donors, contributing $16,263,646.

The total eligible students awarded scholarships was 11,292 that received $39,456,599 in scholarships.

What about the student's family incomes that were awarded a scholarship and the incomes of those 17,042 individual donors?  We will never know, because this is top secret educational information.

Some SSOs like Georgia GOAL voluntarily releases their statistics yearly, but most do not.

When asked about the lowest-highest ranges and averages, from the 2011 QEEC report, from the 196 corporate donors and $40M in awarded scholarships.  The GADOR tells Patch, “We cannot provide that information due to confidentiality law.”

When asked why GADOR confidential was not allowed to give ranges or averages of donors and scholarships.  Rep. Ehrhart tells Patch; “the new law (H.B. 283) will allow you this access.  It has not been implemented yet.  New laws generally take effect in July of the year they are passed.  I myself put the changes in place that will give all access to the aggregate data you seek.”

Now Georgians may ask for confidential information after July 2013 from the GADOR, so there may be more transparency.

Since ranges and averages for corporate donors and scholarships was confidential, because SSOs are nonprofits; I did my own calculations.

The average corporate-trust donation out of the 196 total divided by $16,263,646; gives an average donation of $82,977.79.

This means a corporation received 75% off of their Georgia income taxes, from my estimated average Georgia SSO donation of $82,977.79.  They only paid the GADOR 25% of what they owed the State from their liabilities, which was $20,744.45.

The average scholarship awarded out of the 11,292 total, divided by $39,456,599; gives an average Georgia private student each an award of $3,494.21.

For 2013, the Georgia Department of Education (GADOE) max awarded scholarship is $9,046.

If the cost of some Georgia private schools range from $11K-23K per year; it is well over my estimated $3,494 average scholarship and GADOE's max $9,046 awarded scholarship.  How can the Lower and Middle Class afford this even with a $3K-9K scholarship?

For 2011, the U.S. Census has five quintiles (fifths) with the lowest at $20,262 or less; the second quintile from $20,263-$38,520; the third from $38,521-$62,434; and the fourth from $62,435-$101,582.  The Census's fifth quintile or Top 5% income bracket is over $186,000 a year.  The Middle Class must be either from $39K-62K or $39K-102K a year.

When asked if families making $186K or more, could misuse these laws to reduce their tuition.  Rep. Ehrhart tells Patch “Under certain circumstances this could be the case.  It is however highly unlikely as the majority of the scholarship dollars are given on the basis of financial need.”

The new H.B. 283 law “consider(s)” the financial need of students, which reads:

“In awarding scholarships or tuition grants, shall consider financial needs of students based on all sources, including the federal adjusted gross income from the federal income tax return most recently filed by the parents or guardians of such students, as adjusted for family size...(If not filed in two years the SSO) shall consider the financial need of the student based on proof of employment income of the parents or guardians from the 30 consecutive days closest to when the applicant submitted the scholarship application and on any other sources of income, including, but not limited to, unemployment benefits, social security benefits, and child support benefits.”

There is nothing in the SSO laws that a Top 5% income bracket family, cannot apply for scholarships.  Again we are covenant people and if it is not written down, someone will use the language of the law, or lack thereof, for their advantage.

Do families that make over $39K-102K a year only donate to SSOs?  What about families making under $39K a year, are they donating $1,000-2,500?  We will never know, because those statistics are confidential.

Rep. Ehrhart tells Patch:

“are you aware that in the public (school) system there are tens of thousands of families making over $186K who are subsidized with tax money at an average of $11K per year.  While in the SSO system it is a rare exception that some middle class kid actually gets a chance at state help for their education.  The horror!  And if they are, it is only an average of $4K in help.  Are the opponents suggesting here that all public school be means tested as well and only poor families actually receive the free education?  I think they are.  I doubt they will be successful.”

The Southern Education Foundation (SEF) show costs of State Per Pupil Expenditure at $4,320 and SSO Cost Per SSO Scholarship at $11,830.

When it comes to means testing all public school students where “only poor families” receive free education; education has always been for parents that could afford it for their children.  In Mexico and Africa, many poor parents do not get any free tax-funded education for their child, all out-of-pocket.

If American public education never existed, then more Lower-Income and Under Middle Class American children would not have an education.  Again this is about money, not about choice or which educational bureaucracy is better.

Yes, some rich and wealthy families go to public schools, but for various reasons.  Some cannot afford private schools, because of their higher standard of living keeping up with the Jones by networking and club fees.  Others are living paycheque to paycheque, even earning over $186K a year.

Some rich and wealthy families are just cheap, to save money.  Others loath the stigma of being labeled rich or wealthy.  They send their child to a public school for the diversity that they will face when they get out in the work force, compared to a private school.

A 2012 Pew Research survey, asked 2,508 Americans who is the Middle Class.  They agreed one is in the Middle Class, if they made $70K annually.  At least 49% surveyed self-identified themselves as Middle Class, even when their incomes ranged from less than $30K and over $100K.

It seems being labeled the Middle Class is better, than the stigma of labeling oneself as those surveyed as Lower Class (32%) or Upper Class (17%).

How can a Lower or Under Middle Class public school family making less than $20K-62K a year, pay for a private school?  How can a family afford the extra $8,000-$14,000 a year, if they make less than $39K a year?

Even with the $3K-9K scholarship, a private education would cost over 25-35% of a family's income, which only made $39K per year.  The family still has to pay for rent, food, mortgage, fuel, utilities, clothing, etc.

Are their cheaper private schools?  Will private schools become cheaper, because they are subsidized to serve more public school children by SSOs?

If all schools had the same resources, then all public, charter and private schools would be better.  The problem is, we do not live in that world.  American education is economically segregated, based on income and funding.

How can corporations, private schools and nonprofits make a profit and provide “a better educational product?”  Education is not reproducing an inanimate object, like a vehicle or iPad, but forming a human mind.

Corporations are about making a profit by cutting labor and costs.  How can a for-profit or nonprofit education both provide a better product, cut costs and make a profit?  Education is not a profit making venture, unless you cut costs and dumb down education.

The brain drain of taking the best A-B students out of public schools and putting them in a charter or private school, improves that school and their exam scores.  What about those C-F students left behind?  Are schools going to segregate further by grade levels, with A-B in one and C-F in another?  How will a C-F student get inspired or compete with others, making C-F?

A mixed-income student body brings about diversity, because those children will experience heterogeneity out in the work force and in life.  Sheltering A-B students or richer wealthy students into one school, does not reflect the conglomerated world we live in.

Keeping troubled, disabled, and special educated students in one school, will not bring about a “better educational product.”

Rep. Ehrhart tells Patch “Georgia has made the correct policy decision that it is important to educate its children.  There are no public kids and private kids; they are all Georgia's kids and the money to educate them should follow the child not the system.”

Good point, it is about “all” kids, but again we are covenant people and it costs money to educate through taxes or out-of-pocket.

The money “should follow the child and not the system.”  It was not written into law that SSO scholarships “follow” the students, nor outside the SSO's preferred network of private schools.  Much like private health insurance has preferred doctor networks, where the patient cannot “choice” another doctor outside that network.

Ehrhart's SSO Faith First Georgia has 33 partnered private schools and Georgia GOAL has 119 partnered private schools in their network, but would either allow money to “follow” the students outside those approved schools?  This is competition with other SSOs.  The “financial needs” that “should follow” the students, is not written into law.

Herbert W. Garrett executive director of Georgia School Superintendents Association tells Patch:

“I tire of calling it a 'scholarship,' because it truly is a voucher...once a child gets a voucher to a certain private school, he cannot transfer to another private school and take the money with him/her.  In fact, any unused voucher money would go back to the SSO which is more than ironic, since so many Republican lawmakers continually talk about how the 'money should follow the child'.”

Ehrhart is right; education should be a bipartisan issue.  We should “all” support “all” kids, but that only exists in happy ending movies.  If power, rights influence and money is involved in any issue like immigration, same-sex bonding, drug use, and financial reforms.  Education will be as partisan of an issue, and we will “all” take a side.

Picking any side will cost money.  Picking a side, will have you voting against your own long term best interests, and will be divisive.  Education is no different.

Reforming any public or private human organization, takes debate, money, and getting rid of management that stayed too long in their jobs.  Many public policy decisions depend on citizens funding them through taxes, while others want education austerity cuts.

Two theories applies to why money does not follow students.  The first is Legislation Capture, when political bureaucracy “officials inappropriately identify with the interests of a client or industry, at the expense of good governance.”  In this case private school interests are what lawmakers identify with, and create laws that are not accountable by good governance to represent all parents' interests; only represent existing private school parents' interests through tax credit vouchers.

The second is the Principle-Agent Problem in Moral Hazard, where one party (the agent) acts on behalf of another party (the principle).  The agent has more information of their actions and intent, than the principle does.  The principle cannot monitor the agent that acts inappropriately, since both the agent and principle have conflicting interests.

With Information Asymmetry by the Principle-Agent Problem, the public and lawmakers support laws that lack information on how SSOs work or their true intent.  Private schools cannot be monitored by the public, nor have aligned interests.

Replacing one ideal like public education for private, is hoping the new human organization will be better than the old human organization.  We feel we need to do something to change things, to feel in control and that we fixed the problem.  Yet we forget when humans are involved, there will be flaws.

Flaws from not knowing all the facts or factors, with little debate.  Rushing to a decision to create any new organization.  In time, all large public or private human organizations, will become bureaucratic, inflexible, and need reform.  We only learn by trial and error.

When contacting people on SSO educational tax credits and their cost seems to be an ideological semantic war.  A shell game of put money over here, and defunding the Georgia State Treasury over there.

Only historians will tell, if we fixed the problem of education.  Yet each generation, since the founding of this nation has never “fixed education,” no matter public or private.  Education has always been a trial and error human organization, which never solves specific issues.  We just hope replacing an old ideal, with a new word will make it better.

New rules or laws create an advantage for those that create them.  Today's new reform ideal, will in time become bureaucratic and need dismantling, when it fails to educate “all” students.

Unless someone one day can insert information directly into the brain; education will not cost less nor be efficient and will be more of an art form, than a science.  Education is not an assembly line.




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