Vast Majority of NC Voucher Recipients Already in Private School, DPI Report Finds

More than 91% of voucher recipients in 2024–25 did not come from public schools, leaving taxpayers footing a $432 million bill for students largely already enrolled in private education.

Holly Springs, NC, Jun. 14, 2025 — Since its creation in 2014, North Carolina’s Opportunity Scholarship program, initially targeted toward low-income families transferring from public schools, has steadily grown in scope. The most dramatic change came with House Bill 10 (Bill), passed in November 2024, which:

• Removed income caps and prior public school attendance requirements

• Injected approximately $463 million to clear a growing waitlist and ramp up future expansion

• Allowed retroactive reimbursements for families who enrolled children in private school before applying

As previously reported by Holly Springs Update, this overhaul drew strong reactions from across the political spectrum. Supporters highlighted the expansion of school choice, while critics raised concerns about rising costs and reduced oversight of public funds.

New DPI Report: Few Public School Students Used Vouchers

A report released by the North Carolina Department of Public Instruction (DPI) in June 2025 revealed that just a small fraction of this year’s Opportunity Scholarship recipients came from public schools. (Report, Presentation)

• Of the roughly 80,325 students funded in 2024–25, only about 6,710 (8.4%) had been enrolled in public schools the previous year.

• More than 91% of recipients either remained in private education or enrolled directly without first attending a public school.

This marks a significant departure from the program’s original focus. DPI also reported that the number of students funded nearly doubled compared to 2023–24, when approximately 32,500 students received vouchers.

State funding for the program also rose sharply, reaching approximately $432 million in actual expenditures for the current year, according to DPI and the NC State Education Assistance Authority.

State Funds Surge with No Public School Offset

The $432 million figure represents actual state spending for the 2024–25 fiscal year, not a projection. With most recipients already in private schools, the report suggests that the expansion has created new costs rather than offsetting existing ones.

DPI estimated just $10 million in public school “savings” from students who transferred out of public systems, far short of covering the program’s total expense.

Because North Carolina funds public schools on a delayed, or arrears-based, model, many of the students who left public schools this year were still counted in district budgets. This contributed to an unusual overlap, with some students effectively receiving funding twice—once through public school allocations and again through the voucher program.

Who Pays for This and How?

The additional costs are currently covered through a combination of general taxpayer dollars and reserve reallocations:

1. General Fund Appropriations
   A substantial portion of new funding came from the state’s General Fund, which includes revenue from sales taxes, income taxes, and other statewide sources. Lawmakers committed:

   • $248 million in one-time funds from a newly established education reserve

   • $215 million in recurring annual funds added to the Opportunity Scholarship reserve

   If left unchanged, recurring funding is scheduled to grow to $825 million annually by 2032–33.

2. Reductions to Public School Reserves
   Simultaneously, legislators reduced or eliminated some public school reserves and support programs:

   • A $36.2 million cut to the State Public School Fund

   • Elimination of the $60 million Education Enrollment Reserve

   Though not officially designated as voucher offsets, these changes created room in the budget for expanded private school scholarships.

If voucher usage continues to increase, particularly among families already paying for private school, the state may eventually need to identify new funding sources, reduce other services, or revisit how public education is resourced.

Potential Unintended Consequences

Some education analysts warn that broad public funding for private education could lead to increased tuition prices over time. This concern echoes the Bennett Hypothesis, which holds that increasing financial aid encourages schools to raise prices, knowing aid will absorb the difference. Research generally supports this theory.

A meta-review of 25 peer-reviewed studies found that most identified a connection between expanded aid and rising tuition, especially in market segments with limited competition. One often-cited analysis estimated that colleges raised tuition by $0.60 to $0.70 for every additional dollar in aid.

For-profit colleges showed the strongest effects, though public and nonprofit institutions also exhibited pass-through rates in the range of $0.40 to $0.60 per aid dollar. A 2017 Federal Reserve study found similar patterns where loan limits increased.

Applying that logic to North Carolina’s voucher model, critics suggest that expanding public subsidies without guardrails could lead some private schools to gradually raise tuition, thereby diminishing the value of the scholarships and increasing pressure on families.

Equity and Policy Implications

Approximately 640 private schools currently participate in the Opportunity Scholarship program, with funding being most heavily concentrated in suburban and urban areas. Demographic patterns suggest that the majority of funds are benefiting higher-income families, rather than reaching the state’s most under-resourced communities.

Critics argue that using public dollars to support students who were already in private school does little to improve educational equity or access. DPI has recommended that any savings from student transfers, however modest, be reinvested into public education.

Bottom Line

North Carolina’s universal voucher expansion has led to a significant increase in private school subsidies, but relatively few public school students are opting for this option

. With system costs climbing and nearly all new recipients already outside the public system, questions are growing about equity, effectiveness, and the long-term fiscal path ahead.