Program Summary

“Choosing a school is the most important decision a parent makes for their child.”

South Dakota created tax credit scholarships recognizing and believing in the great responsibility parents have for their child’s education. Every parent’s hope is that their child has every opportunity to succeed. The tax credit scholarship program is one more effort by the State of South Dakota to help parents achieve that goal. Whatever school a family chooses, South Dakota, in partnership with the insurance industry, has further empowered parents with that decision.

Tax credit scholarships became law on July 1, 2016, only a few weeks before the start of school. SD Partners in Education, Inc. was incorporated as a non-profit to handle the operational activities of the new program. Because SDPE, Inc. didn’t yet have the requisite 501 c (3) status, Great Plains Education Foundation, Aberdeen, SD, agreed to be the Scholarship Granting Organization. They are handling all the administrative and financial functions, similar to their work with the State in the Dakota Corps scholarships.

Sammons Financial Group, an insurance holding company which includes Midland National Life Insurance Co., led the way with a $150,000 donation. With dollars now available for scholarships, applications were opened for families. Avera Health Plans followed soon after with a $100,000 contribution. These early contributions allowed families to immediately take advantage of this new program. Calendar year 2016 ended with total contributions to the scholarship granting organization of $325,000. Because SD law (13-65-9) states that all tax information is confidential, it is the companies’ prerogative to issue their own press release regarding their contribution.

While 80% of the contribution qualifies for a tax credit, the remaining 20% ($65,000) is due to the benevolence of these insurance companies resulting in an increased private investment in the education of South Dakota students. While the initial tax credit limit was $2 million for the calendar year 2016, the amount contributed and awarded in the inaugural few months is absolutely gratifying. The new tax year 2017 has begun with the goal of reaching that $2 million tax credit limit this year. Insurance companies’ long standing generosity and investment in education will be the key to making this opportunity available for many more families.

Although the timeline was very short, 325 families initially applied for the 2016-17 schoolyear through TADS, a 3rd party financial aid assessment scholarship organization. Every student that applied and was grade and income eligible received a scholarship. Scholarship amounts were based on income levels with the lowest income receiving the highest scholarship award ($1,300). Because scholarships cannot exceed tuition and fees, a few $100 scholarships were awarded. The average scholarship was approximately $750. The only denials were due to income or grade ineligibility. (Income eligibility is 150% or less of free and reduced lunch.) Initially 40 non-public schools, whose student enrollment totals 8,409, elected to participate; one additional school has recently signed up to participate.

The initial contributions resulted inĀ 280 scholarships awarded to students in 38 schools across South Dakota for the 2016-17 schoolyear. The additional contributions allow us to continue to award scholarships for the 2nd semester as well as a great start in helping us provide scholarship opportunities for next year.

Schools’ new students receiving scholarships include: 97 Kindergarten students (62% low income*); 76 students in grades 1-12 and transferring from a public school or new to SD K-12 schools (59.2% low income*). Returning students: 67 – 1st Grade students (64.2% low income*); 40 – 9th Grade students (47.5% low income*).

(Preliminary numbers as more families continue to apply for the second semester.)

*Low income eligible student is defined as a member of a household whose income does not exceed 100% of free or reduced lunch guldelines as of January 2016. {13-65-1(4)}.