Concerns about the management of the Education Tax Credit (ETC) scholarship have been raised at the last couple Home Education Advisory Council (HEAC) meetings. You can find the December 2024 and January 2025 summaries at these links.
HEAC issued a letter outlining several points of concern to Commissioner Edelblut. GSHE obtained it via a Right to Know request.
Background on the ETC
The Education Tax Credit scholarship, found in RSA 77-G, was created in 2012 as a way to provide access to private schools, home education, or out-of-district public schools for low-income families, set at 300% of the federal poverty limit. The funding source is not from the state’s education trust fund or treasury; it is funded through private donations by businesses and individuals. Participation in this scholarship does not alter a child’s educational status, unlike the Education Freedom Account (EFA), which is a separate pathway in state law RSA 193:1; home education, RSA 193-A, families that receive the ETC scholarship remain home ed families. The Children’s Scholarship Fund (CSF) manages both the Education Tax Credit and Education Freedom Account programs.
Areas of Concern
- Delayed processing of expenses
- Difficulties using Class Wallet, the transaction processor, for promotional codes, reimbursements, tracking orders, order history, and other management functions
- Poor communication and lack of responsibility between the Children’s Scholarship Fund (CSF) and Class Wallet when families have difficulties
- Delayed distributions of scholarship awards
- Slow response to verify if an expense is approved and discrepancy between the “approved” list and what is eligible per statute
- CSF focuses more on the EFA rather than ETC families
- CSF distributes ETC funds to EFA families even though they are not eligible per RSA 77-G
More specifics are given in the HEAC letter to Commissioner Edelblut.
“While the ETC is not a program that is exclusive TO home education, it is (and should be) one that is exclusive to Private/Home Education in the state of New Hampshire and should be managed in a way that best serves those families. When the EFA was added to statute as a 4th pathway to satisfy compulsory education, no corresponding changes were made to the qualification requirements to the ETC. To be clear, the ETC pre-dated any other alternative pathways, and specifically delineates that the funds are to be used ONLY for the pathways of Private School OR Home Education. The ETC should be serving those families that are NOT receiving any taxpayer education funds – either indirectly through enrollment in the public schools or directly by participating in the EFA.”
Why does this matter?
The ETC eligibility is limited to families that earn no more than 300% of the federal poverty limit and does not change the educational pathway status of the child; they remain a private school or home education student. The scholarship awards average just over $3,000 per student to 1,224 children, and home ed families historically receive roughly $800 per student. This includes EFA students who meet the income threshold.
In comparison, the EFA’s eligibility is higher, currently set at 350% of the FPL, and once a family enrolls in the EFA, that is the child’s educational pathway regardless of how the funds are used. Each EFA student receives an average of $5200, the same Average Daily Membership dollar amount that is given to public schools based on enrollment and comes from the Education Trust Fund per RSA 194-F:2. CSF reported 5,321 EFA participants for 2024-25 as of September 1, 2024.
CSF has stacked the EFA and ETC since fall 2021 when the EFA began. This means that if a family’s income qualifies for both, they may receive both and CSF encourages families to apply to both programs. However, the EFA participants are not listed as eligible students in the ETC law, RSA 77-G.
VIII. “Eligible student” means a New Hampshire resident who is at least 5 years of age and no more than 20 years of age, who has not graduated from high school, and
(a)(1) Who is currently attending a New Hampshire public school, including a chartered public school, and for whom the adequacy grant in the next school year would be reduced if the student were removed from the average daily membership calculation, or who is entering kindergarten or first grade; or
(2) Who received a scholarship under subparagraph (1) or this subparagraph in the prior program year; or
(3) Who does not qualify under subparagraph (1) or (2); and
(b) Whose annual household income is less than or equal to 300 percent of the federal poverty guidelines as updated annually in the Federal Register by the United States Department of Health and Human Services under the authority of 42 U.S.C. section 9902(2). The scholarship organization shall verify eligibility under this subparagraph.
Further, when limited ETC funds are disbursed to EFA families, that means there is less available to those families who decline the EFA.
HEAC asked Commissioner Edelblut to investigate CSF’s practices of distributing ETC scholarships to EFA participants, and in a response, he offered to forward the email to the scholarship organization, but nothing further.
How many independent home ed families have been adversely impacted by CSF’s practice?
What is the basis for CSF distributing the ETC to EFA families when they are not eligible per the applicable statute?
RSA 77-G:6 indicates that the managing scholarship organization may be investigated, at their own expense, if there are concerns, by the Department of Revenue. Does the Commissioner or HEAC believe this is warranted?
There are more questions than answers.
Granite State Home Educators (GSHE) is a 501c4, all-volunteer statewide grassroots organization created to support and empower families who choose home education for their children’s learning.