Senate subcommittee previews rewrite of scholarship program to address court ruling

Subcommittee chair opened a final 2024 meeting to review a bill scheduled to be prefiled tomorrow that would restructure the state’s Education Scholarship Trust Fund into a K–12 Education Lottery Scholarship to respond to a recent South Carolina Supreme Court ruling.

The briefing, led by Donna Barton, research director for K–12 issues, framed the redraft as a direct response to the Edison opinion (filed Sept. 11, 2024), which concluded portions of the current trust arrangement treated appropriated money as public funds and struck parts of the law that would have benefited independent schools. "The majority of opinion concluded that this was not a true trust fund and therefore maintained its public fund nature and struck portions of the act that would have benefited independent schools," Barton told the subcommittee.

Why it matters: the proposed rewrite changes where the money comes from and how awards are calculated, an effort staff said is intended to address the constitutional concerns identified by the court while allowing students already using scholarships to continue receiving aid. "You got a couple thousand students out there that are right in the middle of the school year. They have made that transition to an independent school… and all of a sudden the majority opinion literally pulled the rug out from under them," the subcommittee chair said, pressing urgency for a legislative fix.

What the bill would do: Barton described several specific changes. The program would be renamed the "K through 12 Education Lottery Scholarship" and eligibility would be limited to South Carolina residency and meeting poverty guidelines (the draft increases the third‑year poverty threshold to 600% of federal guidelines). The draft removes other eligibility criteria, sets awards equal to the average per‑pupil state funding (Barton said that figure was a little over $8,000 last year), and expands eligible expenses to include uniforms and inter‑district transfer fees. Barton also said the bill moves from fixed application windows to a rolling application model.

Funding mechanics: the redraft directs appropriations to a scholarship fund that the treasurer would supply from the South Carolina Education Lottery account — described in the briefing as a separate account that does not flow through the general fund. Barton said shifting some current lottery‑funded programs into general appropriations could free lottery funds to support the scholarship without reducing existing lottery expenditures for public education, but she and members noted appropriations are controlled by the General Assembly and depend on available lottery revenues.

Participation and timeline: the draft keeps a staged rollout — 5,000 eligible students in year one, 10,000 in year two and a 15,000 cap in year three — and includes a third‑year study and evaluation by the Department of Education. Barton said roughly 2,633 students were enrolled prior to the Edison decision and that rolling enrollment may increase participation. The draft also would require the Department of Education to create a model inter‑district transfer policy and give districts 120 days to adopt a consistent policy.

What the committee did: the session was informational; the chair said members will reconvene in January for a deeper review and to begin offering amendments. The chair also announced that Senator Turner has agreed to serve as vice chairman of the Senate Education Committee for the next four years. No motions or votes were taken at the December meeting.

Next steps: the bill is expected to be prefiled tomorrow; the subcommittee will schedule a January meeting to debate language and consider amendments. Committee staff invited written comments and said they had received many; staff plans further analysis before the next session.