By Anne Marie Amacher
The Catholic Messenger
Since 2006, School Tuition Organizations (STOs) in Iowa have helped many families afford a Catholic education for their children.
Funding for the STO program allowed by state law has slowly grown, but not enough to fund every student who needs assistance, said Steve Roling, executive director of the STO of Southeast Iowa. The first year’s cap was $2.5 million. Since then, the cap has grown to $12 million per year. Supporters hope the Iowa Legislature will raise the cap this session, said Tom Chapman, executive director of the Iowa Catholic Conference.
The Iowa Alliance for Choice in Education (ACE) supports parental choice in education as a pathway to academic success, said Trish Wilger, the executive director. “The savings these programs create at the state level doesn’t usually draw much attention. As our legislators deal with educational funding, it’s important that they — and their constituents — understand the fiscal benefits of education choice.”
Twelve STOs in the state provide funding for private schools, including Catholic schools. Two STOs operate in the Diocese of Davenport: STO of Southeast Iowa and the Mississippi Valley STO.
Each STO has its own funding cap, based on the total amount allowed to be raised and the number of students per school within the STO. Donors may specify a school or donate to the STO in general.
Donors
Qualifying donors are individuals, LLCs, Subchapter S corporations and C corporations. Individuals can make unlimited gifts by check, credit card, stock, IRAs and more. But once the STO limit has been met, donations can no longer be accepted. Individual donors receive a 65 percent tax credit on their Iowa tax form and receive a tax deduction on their federal form, which reduces their taxable income.
Liz King Powers, coordinator of the Mississippi Valley STO, offers an example. If a couple donates $1,000 to an STO, they receive an Iowa tax credit certificate worth $650. In addition, they can claim a $1,000 donation on their federal tax return, which could save $350 in federal tax. The federal level varies, based on the individual/couple’s tax bracket.
Recipients
After Jan. 1, Roling said families may apply for STO grants. A tax return is required along with an STO application. Application deadline for the STO of Southeast Iowa is April 17 (tax day) this year. Funds granted will be awarded for the 2018-19 school year.
Each STO committee reviews the applications. Families must meet certain criteria, such as residing in the state of Iowa, having students at least 5 years old by September and a family income at or below three times the federal poverty level. After reviewing applications, the committee determines how much money is needed and makes decisions on awards. “There isn’t enough to cover every student for their total amount,” Roling said.
At Notre Dame Catholic Schools in Burlington, about 76 percent of what is needed is distributed. At Regina Catholic Schools in Iowa City, the STO of Southeast Iowa covers about 55 percent. Schools receive letters identifying grant recipients and the grant they’ll receive. The schools contact the families.
Families needing assistance beyond what the STO provides are encouraged to check with their school’s financial aid or business office.
Powers of the MVSTO said that as of Dec. 20, 2017, $1,235,962 in tuition grants were awarded through the Family Tuition Plan (FTP) for the 2017-2018 school year. “We are able to meet some additional need through a partnership between the MVSTO and the Embracing Our Future Campaign.”
MVSTO begins accepting FTP applications after an applicant’s taxes have been submitted for the preceding year, with a June 30 deadline. Applications received after June 30 are not eligible for full funding unless the family is new to the school or has extenuating circumstances such as job loss, extreme medical costs, etc., Powers said.
FTP applications are processed through a formula that determines each family’s unique “tuition threshold,” or the amount they should reasonably be able to pay in tuition based on income, family size, and total tuition requirements. The FTP then covers the cost over each family’s threshold – for example, if a family’s tuition threshold is determined to be $3,000 but their total tuition requirements are $5,500, the FTP would cover the additional $2,500. After applications have been processed, a letter is sent to the school and family with the grant results. Payments are handled by each individual school.
For information on STO of Southeast Iowa visit http://stoseiowa.org or contact Roling at (563) 391-1845 or steve.roling@roling.tax. For MVSTO, visit www. mvsto.org or contact Liz King Powers at (563) 326-5313, ext. 228 or email Elizabeth.powers@assumptionhigh.org.
STOs in the Diocese of Davenport
Two School Tuition Organizations serve the Diocese of Davenport:
STO of Southeast Iowa covers Notre Dame Catholic Schools in Burlington; Prince of Peace Catholic Schools in Clinton; St. Joseph Catholic School in DeWitt; Regina Catholic Education Center in Iowa City; St. Vincent Catholic Schools in Keokuk; Holy Trinity Catholic Schools in Lee County (Fort Madison, St. Paul and West Point); Saints Mary and Mathias Catholic School in Muscatine; Seton Catholic School in Ottumwa; and St. James Catholic School in Washington.
For 2018, STO of Southeast Iowa has 2,291 students and can take contributions totaling a maximum of $814,819 through Dec. 31, or until the cap is met.
Mississippi Valley STO covers Lourdes Catholic School and Rivermont Collegiate, both in Bettendorf and All Saints Catholic School, Assumption High School, John F. Kennedy Catholic School and St. Paul the Apostle Catholic School in Davenport.
For 2018, Mississippi Valley STO has 1,957 students and can take contributions totaling a maximum of $696,028 through Dec. 31, or until the cap is met.
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