State Budget Needs to Extend ESA Application Window

June 13, 2024

Palmetto Promise Team

The General Assembly has a chance to bolster South Carolina’s fledgling ESA program in the 2024 Fiscal Year budget, currently being reviewed in Conference Committee.

As you may recall, for the 2024-25 school year, the Education Scholarship Trust Fund program will allocate 5,000 $6,000 scholarships to low and moderate income families across the state to spend on educational expenses like private school tuition, textbooks, disability services, tutoring, and more. Applications for these 5,000 slots were accepted on a very tight timeline – between January 15 and March 15, 2024 – and eligibility was limited to families at or below 200% of the federal poverty line whose students were enrolled in public school during the 2023-24 school year.

Palmetto Promise undertook an extensive outreach project to spread the word about the new education scholarships available, reaching out to families through over 100,000 mail pieces, 130,000 text messages, 520,000 emails, 165 radio ads, and a digital marketing campaign reaching millions. And despite the short application window and strict eligibility limits, South Carolina families were eager to receive these scholarships to exercise choice in their children’s educations. For only 5,000 available scholarships, the SC Department of Education received 7,907 applications. We broke down the statistics on these applicants in a blog post shortly after the application window closed.

Recently, after the Department of Education reviewed all applications, it was announced that, of those 7,907 who applied, only 2,880 were approved to receive the scholarships. You may be wondering, like we did, what happened to render so many students ineligible. Some in the media have fallaciously interpreted this rejection rate to be a sign that South Carolina does not want or need ESAs. But this is clearly proven wrong by the sheer volume of applications the Department of Education received – South Carolinians want school choice, and an overwhelming number families were so interested in utilizing ESA funds that they took the time to apply.

So what happened?

According to the SC Daily Gazette, about 10.7% of rejected students fell outside the income limit for the scholarships. We hold that this is, at least in part, because families likely had no idea they exceeded the income limit, as ESTF calculations include certain nontaxable income (eg. housing allowances and alimony). An additional 8.2% of rejected students fell outside the age range for the program.

The biggest reason for denials? 79% of those rejected “applied after the deadline or did not complete documentation.”

That means that the number one barrier to students utilizing ESTF scholarships is the strict, two-month application window that the General Assembly chose to constrain the program.

South Carolina’s families desperately want ESTF scholarships. The budget allocation for 5,000 scholarships has already been set. The General Assembly should allow students to take full advantage of these scholarships by extending the application window and accepting applications until all 5,000 scholarships are awarded.

Representative Shannon Erickson (R-Beaufort), Chairlady of the House Education Committee, proposed a budget proviso that would do exactly this. It reads:

1.112.      (SDE: Education Scholarship Trust Fund)  Pursuant to the funds appropriated to the Education Scholarship Trust Fund (ETSF) program, the department may accept scholarship applications on a rolling basis after the March 15th deadline, if available space and funds exist. The ESTF program may accept any student who meets the requisite age specifications and is the child of active-duty military personnel who was killed while on active-duty status or an active-duty member of the Armed Forces of the United States who has received permanent change of station orders to a military base and who, as a result, will reside in South Carolina and meets the requisite age specifications. For the current fiscal year, the requirements of Section 59-8-140(F)(1) and Section 59-8-115(E)(4)(b) are suspended.

This proviso was easily adopted in the House. Yet, in the budget conference committee this week, members chose to table this proviso over concerns it conflicts with a Senate rule that the budget cannot “amend, add, or repeal” any of the permanent Code of Laws. But according to the same rule (24B), with a 3/5 vote of Senators present and voting, the Senate can allow and pass a House budget proviso that temporarily amends existing law to extend the application window past the codified March 15 deadline.

To put it simply, if the Conference Committee chooses to include the proviso, with a vote of 28 Senators (in a Senate with 30 Republicans, assuming everyone is present), Representative Erickson’s ESTF proviso can be included in the budget, and the application window for ESAs can be reopened until all 5,000 scholarships are awarded.

This proviso is simple common sense. The 5,000 scholarships already allocated, budgeted for, and signed into law should be awarded for the 2024-25 school year. The number of applications show that there is undeniable demand for these scholarships, and the rejection data clearly shows us that the tight two-month application window impeded families’ ability to get applications completed on time in order to receive scholarships

That is why we suggest the conference committee include Representative Erickson’s proviso in the conference report and call on the Senate to give it the green light. In order for the ESTF program to work as intended, the General Assembly should recognize the need to be flexible and responsive to bumps in the road during a program’s initial year of operation. Proviso 1.112 must be passed.