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The Opportunity Scholarship Program has faced several legal and legislative challenges in the four years since its establishment in July 2013. It is the intention of this memorandum to highlight the frustrations these challenges have presented to school leaders and parents who depend on the Program. In addition, the North Carolina State Education Assistance Authority has responded to such challenges in administering the program. Below is a timeline of the Opportunity Scholarship Program, including disruptions, context, and consequences of each hurdle or stoppage of the Program.
OSP Faces Legal Challenge (2013-2014)
The Opportunity Scholarship Program was established in July 2013 and five months later, in December 2013, a pair of lawsuits were filed challenging its constitutionality. In January 2014, The Institute for Justice intervened on behalf of parents to defend the Program. Despite the filing of the lawsuit, implementation of the Opportunity Scholarship Program continued and applications opened on February 1, 2014.
OSP Faces a Temporary Injunction (2014)
On February 21st, 2014, the Opportunity Scholarship Program was enjoined and a temporary injunction was put in place. The priority application period (February 1st - March 1st) halted early on February 25th with 4,500 applicants for the Program.
In April, the North Carolina Court of Appeals rejected a petition to lift the injunction and PEFNC’s Oneof4500 campaign was launched, documenting parents’ frustrations to the setback in attaining a better education for their children and representing the 4,500 families who qualified, applied, and were denied for an Opportunity Scholarship. That same month, the motion to lift the injunction was allowed by the North Carolina Supreme Court. In June, the SEAA moved forward with the lottery for Opportunity Scholarship awards and in July, the lower court ruled that no scholarship money would be interrupted.
OSP Faces a Permanent Injunction (2014)
In August, the Superior Court granted a permanent injunction on the Program and funds were halted. The Court of Appeals dismissed an appeal to stay the injunction. This same month, school started for private schools in North Carolina. Families who were promised a new educational beginning for their children were in limbo because of the Court’s newest ruling. The Institute for Justice refiled a petition to the Court of Appeals and the Court allowed funds to be disbursed, but only for those families who had accepted their award prior to the court’s injunction.
Over $4.6 million of the allocated $6.8 million was expended for 1,216 recipients because disbursements were only allowed for those families who accepted their award prior to the injunction. Applicants outnumbered scholarships available by 232%, yet the Program ultimately ended up with only 51% subscription.
OSP Ruled Constitutional, but Held up Legislatively (2015)
In December, the North Carolina Supreme Court allowed SEAA to open the 2015-16 application and on February 1, 2015 applications officially opened. While applications were accepted throughout the application period uninterrupted, still remaining was a legal cloud of uncertainty hanging over the Program. In total, 8,675 new applications were received by the SEAA. After nineteen months, in July 2015 the North Carolina Supreme Court upheld the Opportunity Scholarship Program as constitutional.
Even with a Republican-led House and Senate and with a Republican Governor, there was a “three month standoff” during the 2015 budget negotiations and the final budget was not signed into law until September 18, 2015. For most private schools in North Carolina, school starts in early to mid-August. This led to a steady stream of calls to the Parents for Educational Freedom in North Carolina office from school leaders and parents who were unsure about their next steps as they waited for the General Assembly to send their final budget to the Governor
For schools, the process becomes extremely frustrating. They must decide if their budgets will allow for them to go forward with enrolling these students into their school and taking the chance that the student will eventually be awarded a scholarship. For those that do receive a scholarship eventually, there is a sigh of relief for both parent and school leader, as funds to cover tuition are on the way. For those that do not receive a scholarship, the student has now enrolled in the school and both parent and school face a tough situation. One of the eligibility requirements for the Opportunity Scholarship is that the student must be coming from a public school to a private school. If the student has chosen to enroll in the private school, they disqualify themselves from applying for a scholarship for the next year. For the school who has taken on this student, for whom the parent can obviously not afford tuition, they must now decide how to proceed. The school must either fully commit to waiving or subsidizing the student’s tuition (not just for this year, but for every year that the student is enrolled) or they must ask the student to withdraw. If parents want to apply for the Opportunity Scholarship again the following year, they must withdraw their student from the private school and put them back into public school (a month into the school year) to maintain eligibility for the Opportunity Scholarship. It is truly a no-win situation for families and schools who are forced, by no fault of their own, to make these tough and truly life-altering decisions.
It should also be noted that as part of the application process, the NCSEAA must undergo an income verification process for awarded families that directly affect tuition disbursement. As stated to PEFNC by Kathryn Marker (Director of Grants, Training, and Outreach), “[income verification] delays with 2016-17 … caused some issues and thus understandable frustration on the part of schools throughout the year.”
Ultimately, the 2015-17 state budget provided a 500% increase in funding for the Opportunity Scholarship Program: $17.6 million for 2015-16 (providing 4,200 scholarships) and $24.8 million for 2016-17 (providing 6,025 scholarships). For the 2015-16 school year, 6,109 scholarships were offered and there were 3,683 recipients. Because of the five-month lag time between applying for the scholarship, waiting for the NC Supreme Court to rule on its constitutionality, and then waiting for money to be appropriated, 12% of scholarships went unused because many families didn’t want to start school not knowing if they would ultimately receive the scholarship.
For the 2016-17 school year, uncertainty about the Program lingered and a certain level of trust that the Program was here to stay needed to be rebuilt. Thus, there were 5,624 total recipients for the 6,025 scholarships available, leaving 11% of scholarships unused.
The Opportunity Scholarship Program has faced several legal and legislative challenges in the four years since its establishment in July 2013. It is the intention of this memorandum to highlight the frustrations these challenges have presented to school leaders and parents who depend on the Program. In addition, the North Carolina State Education Assistance Authority has responded to such challenges in administering the program. Below is a timeline of the Opportunity Scholarship Program, including disruptions, context, and consequences of each hurdle or stoppage of the Program.
OSP Faces Legal Challenge (2013-2014)
The Opportunity Scholarship Program was established in July 2013 and five months later, in December 2013, a pair of lawsuits were filed challenging its constitutionality. In January 2014, The Institute for Justice intervened on behalf of parents to defend the Program. Despite the filing of the lawsuit, implementation of the Opportunity Scholarship Program continued and applications opened on February 1, 2014.
OSP Faces a Temporary Injunction (2014)
On February 21st, 2014, the Opportunity Scholarship Program was enjoined and a temporary injunction was put in place. The priority application period (February 1st - March 1st) halted early on February 25th with 4,500 applicants for the Program.
In April, the North Carolina Court of Appeals rejected a petition to lift the injunction and PEFNC’s Oneof4500 campaign was launched, documenting parents’ frustrations to the setback in attaining a better education for their children and representing the 4,500 families who qualified, applied, and were denied for an Opportunity Scholarship. That same month, the motion to lift the injunction was allowed by the North Carolina Supreme Court. In June, the SEAA moved forward with the lottery for Opportunity Scholarship awards and in July, the lower court ruled that no scholarship money would be interrupted.
OSP Faces a Permanent Injunction (2014)
In August, the Superior Court granted a permanent injunction on the Program and funds were halted. The Court of Appeals dismissed an appeal to stay the injunction. This same month, school started for private schools in North Carolina. Families who were promised a new educational beginning for their children were in limbo because of the Court’s newest ruling. The Institute for Justice refiled a petition to the Court of Appeals and the Court allowed funds to be disbursed, but only for those families who had accepted their award prior to the court’s injunction.
Over $4.6 million of the allocated $6.8 million was expended for 1,216 recipients because disbursements were only allowed for those families who accepted their award prior to the injunction. Applicants outnumbered scholarships available by 232%, yet the Program ultimately ended up with only 51% subscription.
OSP Ruled Constitutional, but Held up Legislatively (2015)
In December, the North Carolina Supreme Court allowed SEAA to open the 2015-16 application and on February 1, 2015 applications officially opened. While applications were accepted throughout the application period uninterrupted, still remaining was a legal cloud of uncertainty hanging over the Program. In total, 8,675 new applications were received by the SEAA. After nineteen months, in July 2015 the North Carolina Supreme Court upheld the Opportunity Scholarship Program as constitutional.
Even with a Republican-led House and Senate and with a Republican Governor, there was a “three month standoff” during the 2015 budget negotiations and the final budget was not signed into law until September 18, 2015. For most private schools in North Carolina, school starts in early to mid-August. This led to a steady stream of calls to the Parents for Educational Freedom in North Carolina office from school leaders and parents who were unsure about their next steps as they waited for the General Assembly to send their final budget to the Governor
For schools, the process becomes extremely frustrating. They must decide if their budgets will allow for them to go forward with enrolling these students into their school and taking the chance that the student will eventually be awarded a scholarship. For those that do receive a scholarship eventually, there is a sigh of relief for both parent and school leader, as funds to cover tuition are on the way. For those that do not receive a scholarship, the student has now enrolled in the school and both parent and school face a tough situation. One of the eligibility requirements for the Opportunity Scholarship is that the student must be coming from a public school to a private school. If the student has chosen to enroll in the private school, they disqualify themselves from applying for a scholarship for the next year. For the school who has taken on this student, for whom the parent can obviously not afford tuition, they must now decide how to proceed. The school must either fully commit to waiving or subsidizing the student’s tuition (not just for this year, but for every year that the student is enrolled) or they must ask the student to withdraw. If parents want to apply for the Opportunity Scholarship again the following year, they must withdraw their student from the private school and put them back into public school (a month into the school year) to maintain eligibility for the Opportunity Scholarship. It is truly a no-win situation for families and schools who are forced, by no fault of their own, to make these tough and truly life-altering decisions.
It should also be noted that as part of the application process, the NCSEAA must undergo an income verification process for awarded families that directly affect tuition disbursement. As stated to PEFNC by Kathryn Marker (Director of Grants, Training, and Outreach), “[income verification] delays with 2016-17 … caused some issues and thus understandable frustration on the part of schools throughout the year.”
Ultimately, the 2015-17 state budget provided a 500% increase in funding for the Opportunity Scholarship Program: $17.6 million for 2015-16 (providing 4,200 scholarships) and $24.8 million for 2016-17 (providing 6,025 scholarships). For the 2015-16 school year, 6,109 scholarships were offered and there were 3,683 recipients. Because of the five-month lag time between applying for the scholarship, waiting for the NC Supreme Court to rule on its constitutionality, and then waiting for money to be appropriated, 12% of scholarships went unused because many families didn’t want to start school not knowing if they would ultimately receive the scholarship.
For the 2016-17 school year, uncertainty about the Program lingered and a certain level of trust that the Program was here to stay needed to be rebuilt. Thus, there were 5,624 total recipients for the 6,025 scholarships available, leaving 11% of scholarships unused.