Cyberattack on SC's K-12 voucher program triggered lockdown

COLUMBIA — A phishing scam that targeted vendors for the state’s K-12 voucher program led to the “fraudulent redirection” of an estimated $100,000 through the state’s third-party payment platform, education department officials said, prompting a lockdown on disbursements to schools and small businesses for roughly a week.

Vendors were first alerted to the scam by state officials on Sept. 25, and the South Carolina Department of Education is still working with the company that handles vendor payments — ClassWallet — to verify banking information, assess the scope of the incident and try to claw back the diverted money, spokeswoman Christy Cox wrote in an email.

“Because that work is ongoing, the final impact has not yet been determined,” she wrote.

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Legislative leaders were advised “promptly” the breach, she said, adding that the $100,000 preliminary estimate was included in the initial notification to lawmakers and staff.

As first reported in The 74 , vendors ranging from private schools and tutoring centers to uniform suppliers and music teachers received “spoof” emails designed to resemble official communications from the South Carolina Department of Education or its payment platform, ClassWallet.

A statement from the South Carolina Department of Education said certain service providers were targeted with phishing emails requesting ClassWallet account credentials, but the statement did not say how many. information for vendors is publicly available so that families can locate state-approved educational service providers.

A response from ClassWallet’s media team echoed what state officials said.

The $83 million K-12 voucher program in South Carolina, called the Education Scholarship Trust Fund, this year is serving 15,000 students who can access up to $7,634 for private vendor services.

The phishing scam did not target individual families or their accounts, but the incident did in some cases delay services.

Several vendors the newspaper reached this week said their accounts — placed in “archive” mode for days — were fully functional again by Oct. 5. It remained unclear, however, how many of the 959 providers listed by the state as “ready for payment” had regained access.

For the vendors reached by The Post and Courier, the phishing scam draws attention to broader concerns the voucher program. Families’ enrollment and real-time payment status need to be clarified — critical for risk management and customer service, one vendor said. Another said demand for the program, currently capped at 15,000 students, is far beyond its capacity.

Addlestone Hebrew Academy in Charleston has three students who receive tuition assistance through the state’s voucher program, said Mark Blaylock, the school’s chief operating officer. Payments were delayed by the phishing scam, but the school worked with the families, Blaylock said.

“More than anything, we would like to see the state expand the program,” said Blaylock, whose 112-student school in West Ashley serves children from preschool through eighth grade. “We had a lot of families that tried to get in last year, but because … the legislature only approved a certain amount, that filled up relatively quickly.”

For Heather Brannon, owner of Palmetto Screenprinting and Embroidery in Anderson, the phishing scam was a minor setback in a system she said needs a general overhaul. Customers, she said, might have had to wait an extra few days because of the security breach, but some of her customers already wait weeks for payment approvals.

When she first joined the ESTF program as a vendor in September 2025, Brannon said she filled orders immediately. But she soon learned to hold off until she knew payments from ClassWallet would be approved. Brannon said she supports the program but has no access to a list of students to confirm if they are recipients of ESTF funds.

Sitting on her store’s floor this week were bags of uniforms worth more than $1,000. She was waiting for ClassWallet to approve parents’ requests for payment to vendors, then transfer the money, so she can distribute the uniforms to families, she said. It can take weeks.

“I get agitated just looking at it,” she said.