What is a "School Tuition Organization"? Is it different from a "Scholarship Funding Organization"?


Jon Golbe, Writes for Noodle

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A different, increasingly common way for state governments to help pay for private school is scholarship-granting organizations.

These are known by various names, including School Tuition Organizations (STO) in Arizona, Student Scholarship Organizations (SSO) in Georgia, and Scholarship Funding Organizations (SFO) in Florida. In states where they’re legal, individuals or corporations donate money to scholarship-granting organizations which in turn award scholarships to eligible students. The donors then usually get their money back as a tax credit, which comes out of the state budget. As with vouchers, the students and schools that can attain the benefits of scholarship-granting organizations vary — some organizations only award scholarships to students with disabilities, to students of color, or to students in districts with public schools that have been given poor evaluations, whereas others are available to anyone. Some organizations work on a “first-come, first served” basis, while others have a lottery for all applicants. Donors may have some influence over which schools or which students receive the scholarship money, but officially, the donor’s preference cannot be the only grounds by which the student’s eligibility is judged. This can be a slightly murky process, so rules exist to prevent discrimination and favoritism. For instance, in Arizona, it’s illegal to donate scholarship money to be used primarily by one’s own dependents or to arrange a “swap” with another set of parents in which each pays for the others’ children.

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