May 31, 2025

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Tax-Funded Vouchers Boost Private School Tuition

The 2024-25 school year was the first year that North Carolina’s
Opportunity Scholarship taxpayer-funded private school voucher program
became universally available. For the first time, all families could apply
to receive a tuition subsidy regardless of income or whether their child
had ever attended a public school. This policy change marked a striking
shift in taxpayer burden from using public dollars to fund only public
schools open to all students to adding the expense of funding private
schools through tuition vouchers.

Studies tracking voucher expansions in other states such as [7]Iowa and[8]
Arizona revealed that private schools raised their tuition and pressured
families to apply for vouchers once they became universally available. Our
examination found similar patterns. We found sharp tuition rate increases
in the first year of universal voucher availability, with many schools
raising rates to match the voucher amounts. We also found evidence of
schools taking advantage of the voucher program by giving admissions
preference to families who applied for vouchers or requiring families to
apply for a voucher as part of the school’s admissions process.

To examine whether the introduction of universal vouchers accelerated
tuition increases, we looked at tuition rates for schools dating back to at
least 2022-23. We were able to obtain three groups that satisfied this
requirement, obtaining data back to 2020-21, 2021-22, and/or 2022-23 in
addition to tuition for 2023-24 and 2024-25.

In all three groups, the average percentage change in tuition increased
substantially in the year the voucher expansion went into effect. In two
groups, it more than doubled. The data strongly suggest that voucher
availability drove the increase in tuition rates.

Tuition for Thales Academy private schools provides another view of tuition
increases produced by voucher programs. There are currently 10 Thales
Academies in North Carolina located in Chatham, Johnston, Union, and Wake
Counties. The one Thales Academy located in Virginia—where the state’s
tax-credit voucher program has not changed substantially since 2020—shows a
sharp contrast in tuition rate increases to the increases for the North
Carolina schools.

Between 2000-2021 and 2024-25, Thales in Virginia did not increase tuition.
It stayed constant at $5,300/year (K-5).

Tuition at Thales schools in North Carolina increased little until voucher
expansion was on the horizon (2023-24) when tuition increased 7%. In the
year vouchers became universally available (2024-25), average tuition
across all 10 schools increased 12% to $6,651.

These data suggest that North Carolina’s voucher expansion incentivized
this and other private schools to increase tuition prices. In other words,
once voucher funds became readily available, private schools used the
opportunity to raise tuition prices.

In addition to raising tuition, we found that many private schools strongly
encourage and, in some cases, even require applicants to apply for
vouchers. For example, Grace Christian School in Lee County lists as #4 in
its [9]admissions process[10] “Apply for the NCSEAA Opportunity
Scholarship” followed by the statement: “Complete the NC Opportunity
scholarship Application during the scholarship application period for each
student who will attend GCS. All students must apply for this scholarship
prior to applying for enrollment at GCS.” Before the 2024-25 school year,
applying for a voucher was not a step in their admissions process.

In 2024-25, Grace Christian School received more than [11]$5.1 million in
Opportunity Scholarship tuition payments from the state.

Other schools say clearly that they give preference in their admissions
processes to students who have received state-funded vouchers. For example,
ALC Mosaic in Mecklenburg County stated on its [12]website that “We will be
prioritizing families who have applied for and received the opportunity
scholarship for 2024-25.”

When new applications for Opportunity Scholarships [13]rose to more than
72,000 for the 2024-25 school year in response to expanded eligibility,
voucher supporters claimed that family interest and need drove the
increase. Our data suggest that private school admission policies
encouraging or requiring families to apply for vouchers also contributed to
the rise in applications.

As North Carolina lawmakers enter the budget negotiation process, they are
poised to spend [14]$731 million on voucher programs in 2025-26 despite
public schools across the state facing budget cuts and staffing shortages.

The pattern in tuition increases we revealed shows that private schools are
raising tuition to take advantage of the voucher funding. At the same time,
many schools are incentivizing families to apply for vouchers. As a result,
families may be forced to apply for a voucher even if they have no
financial need or would choose not to apply if left to their own devices.

Are private schools gaming the system at taxpayer expense? Can the state
afford to subsidize private school tuition increases at the expense of the
many other programs left unfunded?

Read our new [15]fact sheet on private school tuition increases!

Legislative and SBE Updates

The NC General Assembly reconvenes on Monday, June 3 at 3:00 p.m. Tuesday's
calendar is busy, with several press conferences and committee meetings.
[16]Check it out HERE to make sure you don't miss anything. Links to
livestream sessions are found on the calendar page.

See our [17]Week in Review for a summary of bills, bills that made
crossover, and key education bills to watch.

The State Board of Education will meet Wednesday, June 4 and Thursday June
5 for its monthly meeting.

Agenda and executive summaries are found [18]HERE.

Have You Heard? Ethnic Studies Works!

Ethnic Studies courses in CA have shown tremendous academic benefits for
students who take the course. Benefits for students include improved GPAs,
better attendance, and higher graduation rates. Students are also more
likely to become engaged with the school community and feel a sense of
belonging. As a result, starting with the class of 2029-30, an ethnic
studies course will be a graduation requirement.

This highly beneficial ethnic studies course was originally developed for
9th grade students by a group of teachers in the Bay Area. A study about
the course, [19]The Causal Effects of Cultural Relevance: Evidence from an
Ethnic Studies Curriculum, was published in 2016. It shared the course's
remarkable impact on students: increased 9th grade attendance by 21
percentage points, GPA by 1.4 grade points, and high school credits earned
by 23 points. The raised awareness of the course’s benefits for students
helped it spread throughout the state.

However, recent culture wars have brought the future of the course into
question. Listen to this great “Have You Heard?” podcast by Jennifer
Berkshire and Jack Schneider to learn more: [20]#198 Ethnic Studies Works.
Does That Even Matter Anymore?

In Case You Missed It

[21]New Gallup Poll: Many American Adults Wish They Had More Math Skills

[22]Raleigh wants to pay police better than teachers

[23]The (US) GOP House Budget Bill Also Takes Aim at Public Education with
Its Private School Voucher Scheme

[24]More than 3 million people would lose SNAP benefits under GOP bill,
nonpartisan report says

[25]Five-decade study: Black girls build on preschool success, while Black
boys struggle in some measures. Research into programs that might bridge
the gap is on the chopping block.

Check Out Our New Audiocast

Teaching is NOT a Sacrifice: It's Time to Change the Story, by Amelia
Wheeler, PhD.

We’ve all heard the headlines: the teacher shortage is reaching crisis
levels. But what if I told you this shortage isn’t just about low pay or
pandemic burnout? What if it’s rooted in something much older and deeper—a
cultural story we’ve been telling about teachers for over a century?

[26]Listen Here

Save the LUNCH Date!

Tuesday, June 10, noon - 1:00 p.m.

Join PSFNC and UNC law professor Barbara Fedders to discuss our latest
report, [27]North Carolina Charter Schools: Undermining Quality Education
for All.

We will discuss important findings in the report about problematic features
of charter schools in North Carolina: racial segregation, exclusionary
student discipline, the rate of school closures, and financial
mismanagement. There will be time for Q & A, so come ready to discuss!

[28]REGISTER HERE

Request A Speaker!

Need a speaker for your next event or group meeting? PSFNC welcomes the
opportunity to speak to your group or organization on public
education-related topics.

We offer our programs virtually to improve accessibility and attendance and
therefore extend your reach. Our services are free of charge but may
require travel-related expenses if the program is in-person.

Email us at [email protected] for more information.

Words to Remember

"As [voucher] programs have scaled up over the last ten years to the
statewide versions we’re talking about today the negative effects of
vouchers on test scores for the children who transfer from public to
private schools—I am not exaggerating when I tell you—they are on par with
what the COVID 19 pandemic did to test scores more recently, what Hurricane
Katrina did to test scores in Louisiana, in 2005. They’re so large that we
haven’t really seen anything else like it in the research record." — Josh
Cowen, NPE Conference, 2023

Help us support public schools!

Public Schools First NC is a statewide nonpartisan, 501(c)(3) nonprofit
focused solely

on pre-K to 12 public education issues. We collaborate with parents,
teachers, business and civic leaders, and communities across North Carolina
to advocate for one unified system of public education that prepares each
child for productive citizenship.

[29]DONATE HERE

[30]www.publicschoolsfirstnc.org

Questions? Contact us today at [email protected]

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