FSTC – The Bottom Line for Baltimore, MD Jewish Schools

Background on the Federal Scholarship Tax Credit Program.

Under the new FSTC program, taxpayers can donate $1,700 per year ($3,400 for married couples) to a Scholarship Granting Organization (SGO) and get an equal amount off their federal taxes.

SGOs use these donations to award scholarships to students who:

• Attend a K-12 school (public, charter, or nonpublic school).
• Have a family income under 300% of their local Area Median Income; and
• Live in a state that has opted in to the program.

Any K-12 student can receive a scholarship if they meet the requirements. Students with no tuition costs – such as those in public and charter schools – can still use scholarships for a range of education expenses, including: books, uniforms, tutoring, special needs services, bussing, computers, Internet, afterschool programs, and fees.

Crucially, states must opt into the program before their residents can receive scholarships.

What it Means for Students in Baltimore Area Jewish Schools.

• Jewish schools in the Baltimore Area currently enroll ~6,600 students (according to Maryland State Department of Education data).

• If the average family has 2 kids in Jewish school, that’s ~3,300 families who could donate to the program (a Jewish federation population study estimated 1.7 students per day school family; two per family is therefore a conservative estimate).

• If even half of families donate the maximum $3,400 to a Federal Tax Credit Scholarship fund for the community, that would mean $5,600,000 per year for the day school community!

• Families can ask their grandparents, friends, and extended family in any state to donate to a scholarship fund for the school and receive the federal tax credit.
  • If each family gets four friends or grandparents to donate at least $1,700 to the community’s fund, that would mean an extra $22,400,000 per year for students!
• We project that over 85% of Jewish families will be eligible for a scholarship (with a family income under 300% of Area Median Income, which is $402,000 in Baltimore County).
  • This is based on a 2020 Baltimore Jewish Population Study projecting that in 2018, 13% of Jewish households had a family income of $200,000 or more.
• If the community maximizes donations from families, grandparents, and friends of families, then that could mean an average scholarship of $5,000 for 85% of students.