MORE TO THE STORY: Opportunity Scholarship Program Funding
Our latest video covers the North Carolina Opportunity Scholarship Program (OSP) debunks the false claim used by activists that the OSP ‘steals money from public education’. Here are some more details that further debunk that claim.
The OSP, in a nutshell, grants up to $4,200 a year for thousands of qualified low-income students, giving them the chance to choose a private school which best suits their academic needs and goals.
Contrary to what teacher union affiliate, the NC Association of Educators, and their affiliated anti-school choice activist groups would have us believe, the OSP is not ‘stealing money’ from public education.
In fact, OSP funding is completely separate from the state’s education budget.
The OPS runs on funds administered by the North Carolina State Education Assistance Authority (NCSEAA), which was established in the state’s General Statutes (G.S. §116 Article 23) in 1965.
The NCSEAA was created for the express purpose of “obtaining an education beyond the high school level” through either public or private schools.
“The purpose of this Article is to authorize a system of financial assistance, consisting of grants, loans, work-study or other employment, and other aids, to assist qualified students to enable them to obtain an education beyond the high school level by attending public or private educational institutions.”
But where does the NCSEAA draw its funding for the program if not from the Education budget? The answer is the state’s Escheat Fund.
What exactly is an escheat fund?
It is a system employed by the state whereby unclaimed or long-dormant financial assets are transferred to the state. Things like bank deposits, securities in accounts that have been inactive for a long period of time, unclaimed accounts or property are examples of such financial assets.
Since 1971, the North Carolina State treasurer has overseen the Escheat Fund and the department’s website has a brief history we’ve included below.
The Escheat Fund got the Opportunity Scholarship program off the ground but it was clear due to the high demand that more would need to be done. In 2015 legislators augmented funding of the program by establishing the Opportunity Scholarship Grant Reserve Fund.
This new reserve fund is administered by the Board of Governors of The University of North Carolina, but it is still not 'stealing money' from the education budget.
Session Laws 2016-94, s. 11A.3(c), provides: "It is the intent of the General Assembly to move the Opportunity Scholarship Grant program funding into the Opportunity Scholarship Grant Fund Reserve (Reserve) established under G.S. 115C-562.8, as enacted by this section, so that funds appropriated for scholarship grants in a fiscal year are awarded to students for the school year in the following fiscal year. This change shall provide additional program stability." (NCSEAA Website)
"The Reserve shall consist of monies appropriated from the General Fund to the Reserve by the General Assembly and any interest accrued to it thereon." (NC State Statute 115C-562.8 )
Escheat monies provided to the NCSEAA as dictated in the Escheat statutes remain intact.
Beginning this school year, the reserve fund will appropriate $44,840,000 towards the OSP. The state will increase this reserve fund by $10 million each year for the next ten years.