TL;DR: The $8,148 Students First ESA has no income test, but Iowa's School Tuition Organization grants do: they serve families at or below 400 percent of the federal poverty guidelines, about $132,000 for a family of four. The two stack. Around Des Moines, the Diocese's Catholic Tuition Organization gave $2.7 million to 1,879 students this fall, and a federal scholarship tax credit adds another layer from 2027.
What is an Iowa STO grant, and how is it different from the ESA?
A School Tuition Organization (STO) is a nonprofit that collects donations for tuition grants at accredited nonpublic schools. Donors receive an Iowa tax credit worth 75 percent of the gift, and the Department of Revenue rule caps those credits at $20 million a year statewide, shared out among STOs by their member schools' enrollment. Grants go to students whose household income is no more than four times the federal poverty guidelines.
The ESA works differently: it is state money in an Odyssey account, the same $8,148 for every eligible K-12 student, with no income line. An STO grant is need-based, set by each organization, and applied to tuition at its member schools.
Can a Des Moines family receive an STO grant and an ESA together?
Yes. The Diocese of Des Moines states that an ESA does not reduce a Student Tuition Organization grant, and families can receive both if they meet the STO income limit. That matters most where tuition runs above the ESA, as it does at many high schools, because the STO grant can cover part of the remaining balance before the family pays anything.
| Students First ESA | STO grant | Federal SGO scholarship (from 2027) | |
|---|---|---|---|
| Income test | None | At or below 400% of poverty | Below 300% of area median income |
| Funded by | State of Iowa | Donors earning a 75% Iowa credit | Donors earning up to a $1,700 federal credit |
| Amount | $8,148 (2026-27) | Set by each STO | Not yet published |
| Applied for through | Odyssey | The school's STO | State-certified SGOs |
How does the Catholic Tuition Organization work for Diocese of Des Moines schools?
The Catholic Tuition Organization (CTO) is the Diocese of Des Moines' STO, created in 2006. Its September 2, 2026 report shows $2.7 million in tuition grants to 1,879 students at the diocese's 16 Catholic schools, funded by donors who gave in 2025. Families qualify below 400 percent of the poverty guidelines, which the diocese puts at $132,000 for a family of four based on the 2025 tax return.
The diocese says CTO awards are the first funds applied to a student's tuition. All 13 Catholic schools in our Polk, Dallas, Warren and Madison county data, from St. Luke the Evangelist in Ankeny to Dowling Catholic in West Des Moines and St. Patrick in Perry, are state-accredited, so both the CTO grant and the ESA apply at each of them.
Which STOs serve other Des Moines-area schools?
Each accredited school belongs to an STO, and the school is the place to ask. Des Moines Christian School, for example, is represented by the Heart of Iowa STO and points families to its own contact for applications. Other Christian and independent schools name their STO in the admissions or financial aid section of their process.
What an STO grant is not: it is not a single statewide application, it is not available at a school without Iowa accreditation, and it is not open to every income. Three questions to ask any school this winter: which STO do you use, when is the application due, and which year's tax return does it check?
Because STO money comes from donations under a capped credit, a grant is not an entitlement in the way the ESA is. An eligible family can apply and receive less than the gap it hoped to close, which is why school-based aid, parish or church-member pricing and the Iowa tuition and textbook credit on the remaining out-of-pocket amount still belong in the plan.
What will the 2027 federal scholarship tax credit add?
A new donor credit, with scholarships to follow. Governor Reynolds opted Iowa into the federal education tax credit on January 5, 2026. Starting in 2027, a donor who gives to an approved scholarship granting organization (SGO) can claim up to $1,700 back as a federal credit, dollar for dollar, and students in families below 300 percent of area median income are eligible. The Governor's office and the Department of Education certify Iowa's SGOs.
Des Moines Christian School already lists itself as a member of the Iowa Scholarship Granting Organization. Scholarship sizes and application steps have not been published, so treat this as a layer to watch rather than one to budget on yet. Our federal credit page will track it.
Frequently asked questions
What is an Iowa STO grant, and how is it different from the ESA?
It is a need-based tuition grant from a donor-funded school tuition organization, for families at or below 400 percent of poverty; the ESA is a universal state account of $8,148.
Can a Des Moines family receive an STO grant and an ESA together?
Yes; the Diocese of Des Moines states that an ESA does not reduce an STO grant.
How does the Catholic Tuition Organization work for Diocese of Des Moines schools?
It gave $2.7 million to 1,879 students at 16 Catholic schools in its September 2026 round, for families under $132,000 (family of four), and its award is applied to tuition first.
What will the 2027 federal scholarship tax credit add?
A donor credit of up to $1,700 from 2027 that funds SGO scholarships for students below 300 percent of area median income.
Related questions
- Who qualifies for an STO grant?
- How do CTO grants work?
- How do families pay for Catholic school?
- What would we owe after the ESA?
Sources
- Diocese of Des Moines: More than 1,800 Catholic school students receive CTO grants (Sept. 2, 2026)
- Diocese of Des Moines: ESA Iowa, updated info for 2025-2026 (Apr. 3, 2025)
- Iowa Administrative Code 701-304.32: School tuition organization tax credit
- Office of the Governor: Iowa opts into federal education tax credit program (Jan. 5, 2026)
- Des Moines Christian School: School Tuition Organization
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