RALEIGH — Two scholarship programs would be consolidated under a recently filed House bill.
House Bill 420, titled “Expand & Consolidate K-12 Scholarships,” was filed on March 22 by Reps. Donnie Loftis (R-Gaston), David Willis (R-Union) and John Bradford (R-Mecklenburg).
The bill changes the name of Personal Education Student Accounts (PESA) for Children with Disabilities to just PESA and the Opportunity Scholarship Program (OSP), which offers funds for low-income students to attend the participating private school of their choice, will be consolidated under PESA.
The result will be two sets of scholarships offered under PESA — one for students with disabilities and one available to all students. Unlike the current OSP criteria, there will be no family income threshold restrictions to be eligible to apply for PESA.
The OSP’s funds are separate from the state’s education budget but that will change under the bill. According to the bill, all OSP funds will revert to the General Fund “No later than November 1, 2026.”
The General Assembly had increased OSP funding for the next 15 years as well as raised the income eligibility threshold in the 2022-23 budget that was signed by Gov. Roy Cooper. The annual appropriation to the OSP reserve fund was increased from $255.54 million to $311.54 million.
There were 25,429 scholarships awarded through the OSP in 2022-23, representing $131,913,162 in grants. The program currently has 544 schools that are participating.
PESA state funding is currently $48.9 million. The consolidation of the PESA and OSP would raise that to $326.2 million for the next fiscal year. Funding for newly consolidate PESA scholarships would reach $1.5 billion by the 2032-33 fiscal year.
The NC State Education Assistance Authority (NCSEAA) will still oversee the funding for the scholarships, per the proposed bill.
Full-time private school students served under the current OSP would go from 33% to 66% of state per-pupil ADM funding for public school students set aside in the prior year. Part-time student funding would also increase from 17% to 33%.
Homeschool students are included in the bills and could get up to 28% of the average state per-pupil ADM allotment for the prior fiscal year.
Parents will have to sign written agreements for the proper use of the funds for the specified education purposes in the bill, which will be transferred electronically.
Scholarship awards for students with disabilities would be $9,000 for an eligible full-time student or (ii) $4,500 for an eligible part-time student. If that eligible student with disabilities has more than one of the named disabilities, the funding may increase to $17,000 for a full-time student or $8,500 for a part-time student. The named disabilities include autism, hearing impairment, moderate or severe intellectual disability, orthopedic impairment and visual impairment.
