by Kaitlyn Shepherd
Policy Analyst for the Center for Effective Education | John Locke Foundation
The recent introduction of several legislative proposals aimed at expanding access to North Carolina’s Opportunity Scholarship Program (OSP) shows that support for school choice is growing in the Tar Heel State.
A biennial budget proposal that passed the House last month would add $25 million in ongoing funding to support scholarship awards for students beginning in fiscal year 2024–2025. It would also expand eligibility by removing a public-school attendance requirement for students in third through eighth grade.
Policymakers also presented a bill that would allow certain homeschool students to participate in the OSP and receive awards of up to $1,000 initially. Over time, award amounts would increase until eligible homeschool students could receive up to 45% of state per-student spending. Identical proposals recently introduced in the House and Senate would remove household income eligibility restrictions and open the program to students from all economic backgrounds while prioritizing families with the greatest financial need.
The continued growth of and interest in the Opportunity Scholarship Program demonstrate its ongoing success and the need for similar opportunities for all students in North Carolina. Considering these developments, a brief history of the program may be helpful.
Simply stated, the OSP gives parents of eligible students a voucher to help cover the cost of tuition and fees at the private school that best serves their child’s needs.
Lawmakers created the program in 2013 and launched it the following year. During the 2014–2015 school year, the first year of operation, only one income level determined eligibility. Students had to live in a household that met the income requirements needed to qualify for the federal free or reduced-price lunch program. In practice, this meant that a family of four making up to $44,123 would meet the requirement. During the 2014–2015 school year, 1,216 students were awarded scholarships worth up to $4,200 each and totaling more than $4.6 million dollars.
In every subsequent year, eligibility has been determined based on two income levels. For the 2015–2016 school year, children in households making anywhere from 100% to 133% “of the amount required for the student to qualify for the federal free or reduced-price lunch program” met the requirement. Students in a family of four whose household income was $59,667 or less could apply. Eligible students whose household incomes satisfied the lower income-eligibility guideline could receive a voucher worth up to $4,200 per year, which represented 75% of the average private school tuition in North Carolina. Students whose household income rose to the level of the higher income-eligibility guideline could receive the lesser of $4,200 or 90% of their private school’s required tuition and fees.
The program faced lawsuits almost immediately. In a pair of cases, the North Carolina School Boards Association, the North Carolina Association of Educators, multiple school boards, and their allies claimed that the OSP violated the state constitution. One of their main allegations was that the constitution required the General Assembly to spend state funding only on the public school system. The trial court agreed and halted implementation of the program.
Fortunately for students and families, in July 2015, the North Carolina Supreme Court upheld the constitutionality of the OSP. The court found that the OSP served a valid public purpose. It also explained that the state constitution did not prevent the General Assembly from appropriating money for educational initiatives other than the public schools. In the opinion for the court, then–Chief Justice Mark Martin summarized the court’s reasoning:
Insofar as the General Assembly appropriates a portion of the State’s general revenues for the public schools, Section 6 [of Article IX of the state constitution] mandates that those funds be faithfully used for that purpose. Article IX, Section 6 does not, however, prohibit the General Assembly from appropriating general revenue to support other educational initiatives. … Because the Opportunity Scholarship Program was funded from general revenues, not from sources of funding that Section 6 reserves for our public schools, plaintiffs are not entitled to relief under this provision.
Despite the decision by the North Carolina Supreme Court, parents and policymakers were still worried about the future financial stability of the program. In 2016, lawmakers sought to respond to those concerns when they created the Opportunity Scholarship Grant Fund Reserve. The reserve was meant to hold money appropriated “to award scholarship grants to eligible students for the school year that begins in the fiscal year following the fiscal year in which the appropriation is made to the Reserve.” Knowing that program funding would be available for the upcoming year filled parents with confidence and certainty.
The OSP survived another lawsuit two years later. Gov. Roy Cooper had challenged budgetary provisions that added $10 million annually to the OSP over a 10-year period and required the “governor’s budget proposal … to recommend that same plan.” Judges ruled that the provisions did not infringe upon Cooper’s authority.
In recent years, the pace of change has increased for the OSP. For the spring semester of the 2020–2021 school year, lawmakers empowered more families to apply for the OSP by raising the upper income limit to 150% of the amount needed to qualify for free or reduced-price lunches. This meant that a family of four making up to around $73,000 a year would meet the requirement.
In 2021, policymakers raised the upper income limit to 175% of the amount needed to qualify for free or reduced-price lunches. During the 2022–2023 school year, this change allowed families of four who made up to $89,842 to apply. Lawmakers also increased award amounts to up to 90% “of the average State per pupil allocation for average daily membership in the prior fiscal year,” or around $5,900 for full-time students.
In 2022, legislators raised the income eligibility cap to its current level, 200% of the amount needed to qualify for free or reduced-price lunches. Students in a family of four with an annual income of up to $111,000 could qualify during the 2023–2024 academic year.
Students whose household income does not exceed “the amount required for the student to qualify for the federal free or reduced-price lunch program” – $55,500 for a family of four – could receive scholarships worth up to $6,492 for the 2023–2024 school year. Students who live in households with higher incomes could receive up to “90% of the required tuition and fees or $6,492, whichever is less.”
More than 25,000 students now use the OSP to access the private schools that best meet their needs.
Lawmakers are considering expanding the program further to allow even more families to participate. House Bill 823 and Senate Bill 406, companion bills aptly named the “Choose Your School, Choose Your Future” bills, would “end income eligibility requirements for the Opportunity Scholarship [and] tie the size of the award to income” to ensure that the largest awards go to the families with the greatest financial need.
Despite some fluctuations, public support for the OSP remains high. Polling data from 2015 showed that 68% of respondents supported the program, while the latest Civitas Poll released by the John Locke Foundation in January 2023 revealed that more than two-thirds of respondents approved of the program, an increase of six percentage points over the previous year.
Lawmakers could meet continued demand and empower more families to choose the educational option that best fits their child’s needs by expanding the OSP to serve all K-12 students.