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GRACE Scholars Explained
May 29th, 2012

In response to news reports questioning student scholarship organization (SSO) practices, Director of GRACE Scholars David Brown addresses the key areas in which the GRACE program differs from other SSOs in the state of Georgia. Below, please find his letter, sent May 25, 2012.

News reports disseminated this week by The New York Times, 11 Alive (the NBC affiliate in Atlanta), and The Atlanta Journal-Constitution raised some questions about practices used by some student scholarship organizations (SSOs) in Georgia. From its founding by Archbishop Gregory and Bishop Boland in 2008, GRACE Scholars has deliberately blazed its own trail to create an SSO that reflects Catholic teaching and best supported GRACE's mission "to provide children from families with financial need throughout the State of Georgia with greater opportunities to secure a quality PK-12 Catholic education." The GRACE path diverged from that of other SSOs as each developed their own policies and practices. This message describes how GRACE differs from other SSOs in three key areas featured in this week's news stories.

Public school transfers: enrollment versus attendance
To qualify for SSO financial aid, students entering the second grade or above must be enrolled in a public school to qualify for SSO assistance. One of the legislators who authored the original SSO law is on record as saying that the choice of the word enrolled is neither an accident nor is it to be confused with attendance. Enrollment in this context means registered. Apparently many students have registered at public schools - but did not actually attend - to qualify for SSO funding.

GRACE adopted a stricter standard. The goal is to bring new students to Catholic schools. Enrollment without attendance is not recognized. To qualify for GRACE assistance, students must have attended a public school during the previous school year. Attendance is documented by a report card or transcript.

Designating contributions to individuals
The SSO law prohibits the awarding of a scholarship to a student at the request of a donor. Such gifts do not qualify for a federal charitable contribution deduction, and an IRS-recognized charity could lose its 501(c)(3) status if the organization treats such a contribution as a charitable contribution. The news media reports on practices by some SSOs that critics allege violates the spirit, if not the letter, of the law.

Since its inception, GRACE has had a clear policy prohibiting the designation of gifts to individual scholarships. True to its Catholic identity, GRACE seeks to serve the common good, not private agenda.

Means testing for scholarship assistance
Critics and supporters of SSOs differ on whether the Georgia legislature intended the SSO/education tax credit law to limit awards to those who demonstrate financial need. Of the 38 SSOs in Georgia, it is not clear how many SSOs practice means testing. It appears, however, to be a small number.

GRACE requires each candidate for a scholarship to submit a "calculated financial need" (CFN) when he or she applies for a GRACE award. CFNs are calculated by two nationally recognized, independent financial aid services based on tax returns and other information provided by the family. A Scholar Profile completed in December 2011 demonstrated that GRACE was reaching families with clear financial need. The average annual family income for GRACE families is $48,000. One in three GRACE Scholars qualifies for free or reduced school lunch. One in four Scholars come from families with annual incomes of $27,750. To view the complete Scholars Profile, please visit the GRACE website.

GRACE's approach to these three issues reflects the vision of Georgia's bishops and GRACE's lay leaders of how a Catholic SSO should be structured and operated. The founders were not reacting to other SSOs. Rather, their aim was to build an organization that was true to its Catholic identity and faithful to its calling to make Catholic schools more accessible and affordable.


David Brown

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