Private Donors Help Low-Income Kids Stay In Schools Of Their Choice

The South Carolina Supreme Court issued a decision last September to strike down the state’s Education Scholarship Trust Fund (ESTF), upending a new education savings account (ESA)-style program enacted by South Carolina lawmakers the prior year. The ESTF program struck down by the South Carolina Supreme Court provided low-income families with an annual scholarship of approximately $6,000 to pay for private school tuition and other education-related expenses.

Thousands of kids from low-income households across South Carolina were a few weeks into the fall semester at a new private school they were attending with the help of an ESA when the South Carolina Supreme Court’s decision jeopardized funding. In the aftermath of that decision and thanks to the leadership of the Palmetto Promise Institute, a South Carolina-based think tank, private individuals, households, and foundations stepped up to ensure that the thousands of children who had been awarded ESAs wouldn’t be forced out of the private school they chose to attend and back into the government-run school they sought to leave.

“I am pleased to announce that Palmetto Promise Institute will be able to fund ESTF scholarships for school tuition though the end of the calendar year due to the generosity of Jeff Yass, a Pennsylvania businessman and philanthropist who is a strong believer in the power of school choice options to change lives,” said Wendy Damron, president and CEO of the Palmetto Promise Institute, when she announced the creation of the ESA Rescue Fund last October. A recent injection of additional funds into PPI’s ESA Rescue Fund is indicative of how the demand for school choice and momentum behind expanding it are growing, not waning.

Dick and Betsey DeVos recently donated $250,000 to ESA Rescue Fund in South Carolina. The entirety of that donation, like those before it, will go toward keeping ESA recipients in the school of their choosing, ensuring they are not harmed by the state supreme court’s decision last fall.

Ensuring children who began attending private school last fall with ESA assistance wouldn’t be forced back into their old school wasn’t the only impetus for the creation of the ESA Rescue Fund. The other reason was to ensure the long-term viability of school choice in South Carolina.

“We feared that if we did not come in and support the families and schools during this time, they would be afraid to participate again when the program was reinstated,” Damron explains. “These are the families that need the program the most. Additionally, we could create all of the scholarships in the world, but if education providers are afraid to participate, we don’t have a program.”

While Damron and her team continue to raise the funds needed to ensure South Carolina kids aren’t forced back into the government-run schools they sought to leave with the help of an ESA, South Carolina lawmakers have been busy working on the legislative remedy to last September’s state supreme court’s decision against the ESTF. At the end of February, the South Carolina House of Representatives passed legislation to fund ESA’s in a manner that many believe will withstand legal challenges. There are, however, some differences between the House-passed bill and the version approved by the South Carolina Senate in early February. Those differences will need to be worked out in conference committee.

“Besides the funding source, the Senate voted to fund scholarships of about $7,500, or 90% of what the state spends per public school pupil, but the House plan would start with $6,000 scholarships and then increase them based on the percentage increase in state public school funding,” PPI noted of the discrepancies between the House and Senate versions of the ESA funding bill. “While the funding matter is contentious, other states’ ESA programs have withstood legal challenges, and the U.S. Supreme Court has ruled that money given to parents to put toward their child’s education at a private school is not the same as government directly funding private or religious education.”

Even though the South Carolina Supreme Court struck-down a taxpayer-fund ESA-style program less than a year ago, the composition of the court has changed such that a different outcome is anticipated by many the next time around. The chief justice who ruled against South Carolina’s ESA program last September, for example, has since retired, and the new chief justice is pro-school choice.

Expansion Of School Choice Continues As Dominant State Policy Trend

South Carolina is not the only state where lawmakers are seeking to provide parents and children in their state with school choice. Following Governor Bill Lee’s (R-Tenn.) enactment of legislation in February making all Tennessee families eligible for ESAs, Idaho Governor Brad Little signed legislation on Februrary 27 making all Idaho kids eligible to apply for an education tax credit worth up to $5,000 annually, $7,500 for children with special needs. The next state where lawmakers are poised to provide school choice is Texas, where legislation to offer ESAs is now working its way through the Lone Star State Legislature. In fact, Texas House Speaker Dustin Burrows (R-Texas) recently voiced support for the ESA bill pending in his chamber, House Bill 3, which a majority of Texas House members are cosponsoring.

Governor Greg Abbott (R-Texas) is expressing confidence that 2025 will be the year that a school choice bill makes it to his desk. “For the first time in our great state’s history, the Texas House has the votes to pass a universal school choice program,” Governor Abbott said in a recent press release. Should school choice be enacted in Texas this year, that achievement will be viewed by many as a result of Governor Abbott’s efforts to back statehouse candidates who support school choice.

Since 2020, lawmakers and governors in fifteen states have enacted universal school choice programs. After the recent increase in the number of families that now have access to school choice, another significant boost for school choice eligibility is on the horizon in some of the largest, fastest growing states. The expansion of school choice, like the push for lower and flatter state income taxes, is a state policy trend that is continuing well into 2025.

In the case of school choice, proponents are on the cusp of legislative victories in the second largest state by population (Texas) and the state that experienced the nation’s fastest rate of population growth last year (South Carolina). What’s more, based on the way in which private donors have stepped up in the Palmetto State, access to school choice in South Carolina is no longer wholly dependent on further state legislative action and its ability to survive legal challenge.