STO tax credit boost begins to benefit students

In DBQ archdiocese, tuition assistance up about $1.4 million

By Dan Russo | Witness Editor

Kim Hermsen Jeff HendersonMANCHESTER — Families who send their children to Catholic Schools in the Dubuque Archdiocese are just beginning to reap the benefits of Iowa legislators’ decision in 2014 to increase the level of tax credits for Student Tuition Organizations (STOs).

The “Our Faith, Our Children, Our Future” STO board has approved nearly $5.5 million in financial assistance for the 2015-2016 school year, with round one STO award notifications totaling $5.14 million going out to schools around the archdiocese this month. Schools will be sending award letters to their families by May 22. There is an additional $350,000 for round two awards for any families that apply over the summer.

“I want to express my sincerest grati­tude to the over 1,000 donors who gave a gift to the STO program in 2014,” said Archdiocesan Superintendent of Schools Kim Hermsen. “Their incredible support enables families to have choice in education and enroll their children in Catholic schools which support the faith formation and academic achievement of their children.”

St. Mary’s School in Manchester is an ex­­ample of a place in the archdiocese that is feeling the positive impact of the legisla­tive and fundraising efforts surrounding STOs. The minimum STO funded scholarship qualified households can receive there has jumped from $300 per student in the 2014-2015 school year to $500 per student in the 2015-2016 year, according to principal Vicki Palmer.

“That’s significant for our families, especially if they have multiple kids in school,” she said.

The amount of STO funds earmarked for St. Mary’s specifically has increased to $78,000 for students in kindergarten through sixth grades for the next school year. Depending on a family’s income, the STO program can pay for up to 95 percent of tuition.

“Our policy is (all families) have to at least try for STO tuition assistance, and if you don’t get anything, you can come back and apply for local assistance,” explained Palmer.

Like many Catholic schools, St. Mary’s also has its own funds to help families that may not qualify for STO help. There are 173 students at St. Mary’s, with about 23 families receiving assistance from the Dubuque Archdiocesan STO. Palmer is grateful for the recent increase in available funds.

“I think it’s a wonderful opportunity for us to thank the Iowa Catholic Conference and all the legislators and other people who got the STO program started for our schools,” said the principal.

Newman Catholic School System in Mason City is another place where the STO expansion will do a lot of good. In that kindergarten through 12th grade program of about 540 students, roughly 30 percent of families receive STO assistance, according to Tony Adams, the system’s administrator. The STO program has helped Catholic Schools, including the Newman system, to retain students and attract new ones.

“Our families have less of a financial strain,” said Adams. “They are very grateful for STO assistance. That’s a common theme I hear.”

In this year’s round one of STO awards, the Newman system will receive about $270,000 in STO tuition assistance, Adams reported. The average STO award in the Dubuque Archdiocese for the 2015-2016 school year is about $1,718, which is $375 more per student than last year, according to Hermsen.

The recent expansion in the STO program did not happen by accident. STO leaders and other supporters across the state lobbied legislators for an increase in tax credits last year and then waged a successful fundraising campaign.

“In 2014 the (Iowa) legislature increased the level of tax credits in Iowa from $8.75 million to $12.5 million,” explained Jeff Hen­derson, archdiocesan development director. “Based on our enrollment in 2014 we were allowed to raise $5,697,329, which we did. Of the amount raised, we will be giving nearly 97 percent to qualified families enrolled in archdiocesan Catholic schools for the 2015-2016 school year.”

Fundraisers are now working to reach the 2015 goal of $5.5 million for the Dubuque Archdiocesan STO.

“We are extremely grateful to the donors who support the STO program,” said Henderson. “Without this support, we would not be able to provide this outstanding level of financial assistance to our families.”

Begun in 2006 statewide, STOs are charitable entities that receive voluntary cash donations from Iowa taxpayers. There are multiple STOs in the state, with the Dubuque Archdiocese having one of the largest. The organizations redistribute donated money to families who wish to send their children to private schools. The law restricts tuition grants to families whose income does not exceed an amount equal to three times the federal poverty guideline for their family size.

Donors are able to earn a state income tax credit by giving to STOs. For instance, a person who originally owes $2,000 in Iowa taxes and gives $1,000 to an STO, would have 65 percent of the donation ($650) taken off their tax bill. Donors can also take the entire donation as a deduction on their federal income tax returns.

Families in the archdiocese are encouraged to apply for STO round two for the 2015-2016 school year. For more information on applying or donating to the “Our Faith, Our Children, Our Future STO,” visit


Photos: Kim Hermsen.jpg – Jeff Henderson.jpg