Alabama SGO's Give $4 Million to Students Already in Private Schools

Alabama author, Larry Lee, reports on the latest in that state's school privatization controversy.

June 15, 2015 |

By Larry Lee, Montgomery, Alabama

New information from the Alabama Department of Revenue shows more specifically how scholarship grant organizations (SGO's) spent money in 2014. The most eye-catching is the fact that three SGO's spent at least $4 million on scholarships to students who were already attending private schools.

Bottom line, we diverted more than $4 million away from the Education Trust Fund that supports public education and gave it to private schools to pay tuition and fees for students who attended that school for at least one year prior to getting aid.

The Alabama Opportunity Scholarship Fund, LLC, created by former Governor Bob Riley, gave 725 of these scholarships. Scholarships for Kids, Inc. of Birmingham handed out 320 and AAA Scholarship Foundation, Inc. of Prattville funded 21 (which was 70 percent of their scholarships).

If you multiply the number of scholarships by the average scholarship amount for each SGO you learn that as much as $4,431,897 may have gone to private schools for previously enrolled students.

We also learn that AOSF gave out more scholarships in Mobile County than any other. The primary target for Scholarship for Kids was Jefferson County, while AAA Scholarships and Beacons of Hope were most active in Montgomery County. (Beacons of Hope did not award any scholarships to students already in a private school.)

Another bit of info that catches one’s eye is the amount spent by AOSF IN 2014 on “non-scholarship expenditures.” The revenue department form notes that this cannot be greater than 5 percent of scholarship funds received during the year. However, this SGO says they spent $805,190 while only collecting $652,390 in donations.

An annual audit by the firm of McGladrey of Step Up for Students, the Florida SGO that controls AOSF, shows the Alabama group spent $522,282 on salaries and wages and $387,036 on recruiting and advertising by June 20, 2014.

Even though supporters of the accountability act continue to claim it was intended to help failing schools and their students, it has long been acknowledged that a large number of scholarship recipients were not from these schools. The new info is the most specific look to date at how far this legislation has strayed from its original stated purpose.

And you can’t help but wonder if the AAA bill passed on Feb. 28, 2013 had stated that it would take $4 million from public schools to give to students already attending private schools, would it have passed both the House and Senate?

Eighteen senators voted to approve Senator Marsh’s amendment to the accountability act on June 3, 2015. This amendment increases the amount of money SGOs can raise and which, if the past is prologue, means even more money will leave the education trust fund to support students who are already attending private schools.

The public needs to hold these senators accountable for their vote.

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