Are you trying to decide whether an AAA Tax Credit Scholarship or Education Savings Account is the best k-12 education funding solution for your family? Here are 10 things to consider before making a decision:
- What is the funding source of each Program?
AAA: AAA Tax Credit Scholarships are privately funded via donations to a non-profit organization = Small Government, Private Spending, Targeted Regulation
ESA: Arizona Education Savings Accounts are government funded via taxpayer dollars = Big Government, Big Spending, Big Regulation
- What state department is responsible for Program Regulations?
AAA: The AZ Department of Revenue, a neutral, non-politically driven department regulates AAA Tax Credit Scholarships.
ESA: The Arizona Department of Education whose director actively worked to stop the program from going into effect regulates ESAs.
- Who administers the day-to-day activity of the Programs?
AAA: AAA is a state-approved non-profit organization known as a School Tuition Organization (STO). AAA’s mission is to serve under-privileged families and promote the advancement of education. AAA is required to pass annual financial and compliance audits.
ESA: An unaccountable third-party for-profit company that is being sued by the state of Oklahoma for fraud and mismanagement of two scholarship programs administers the ESA.
- What is the Program funding frequency?
AAA: AAA raises the private contributions to fund our 3-year Arizona tax credit scholarships before any awards are granted each school year.
ESA: The Arizona state legislature must debate, vote and pass bi-annual budget legislation to include funding allocations for ESAs. If funding is allocated, the ESA accounts are funded quarterly.
- What is the family reporting requirement?
AAA: Not applicable – families do not have to report scholarship payments to the state. AAA is responsible for all state reporting.
ESA: The parent (“Contract Holder”) must submit an itemized school invoice to the state’s third-party administrator.
- Which Arizona private k-12 schools can I choose from?
AAA: All qualified private schools are eligible. Payments are sent directly to the schools by AAA once the student has been verified as remaining enrolled. Click here for AAA’s AZ School Eligibility Flyer.
ESA: Qualified schools must be registered with state’s third-party administrator otherwise the parent/Contract Holder must pay out-of-pocket and then request reimbursement from the ESA personally. The Contract Holder must submit an itemized school invoice to the third-party administrator.
- Are there any specific subject matter requirements?
AAA: Private schools are responsible for ensuring appropriate subject matter is being taught to students. Families are free to move their children into any eligible private school that best fits their children’s educational needs. Click here to learn about three easy steps for selecting a school.
ESA: Contract Holders are responsible to prove to the State that at least a portion of the ESA funds have been expended to provide for an education in State-mandated subject matter.
- What about the family requirement for reporting of other types of expenditures?
AAA: Not applicable – AAA Tax Credit Scholarships may only be used for tuition at eligible private schools.
ESA: Transaction receipts must be turned-in by the Contract Holder to the third-party administrator quarterly or after every 20 transactions. Transactions are subject to audit by the state for up to two years after the fact.
- What if we have no expenditures in a quarter?
AAA: Not applicable – AAA Tax Credit Scholarship payments are remitted to the schools on behalf of the students periodically throughout the school year.
ESA: If no spending occurs in a particular quarter, Contract Holders are required to attest in the ESA portal that no funds were spent.
- How are disallowed expenditures handled?
AAA: Not applicable – because AAA Tax Credit Scholarships may only be used for tuition at eligible private schools, there is no chance that a family could accidentally misspend funds.
ESA: Transactions are subject to audit by the State for up to two years after the fact. Disallowed expenditures must be repaid to the State by the Contract Holder. Any disallowed, misspent, or un-submitted expenses will be sent to the State Attorney General’s Office of Collection / Fraud for collection, fraud investigation, or both.
Ready to apply for an AAA Tax Credit Scholarship? Click here to access our online application.
Need more information before applying? Click here to learn everything you need to know about applying.