What to know about education savings accounts, the school choice measure making waves in states

Amid the national debate over school choice, advocates are seeing growing success with arrangements known as education savings accounts (ESAs), with legislation already introduced or passed in multiple states this year.

ESAs, derided as vouchers by their opponents, are state-funded accounts for parents who are looking for alternative education options for children besides their local public school. The government will put a certain amount of money in the account each year to help students pay for educational expenses such as private school tuition, homeschooling and private tutors.

Amounts for the taxpayer-funded accounts are different in each state. For Arizona, which passed the first universal ESA legislation last year, students get up to $7,000 in their ESAs.

“This is a monumental moment for all of Arizona’s students. Our kids will no longer be locked in under-performing schools. Today, we’re unlocking a whole new world of opportunity for them and their parents,” then-Arizona Gov. Doug Ducey (R) said when he signed the ESA legislation into law last year.

More than 15 states this year have proposed ESA bills, according to a tracker by school-choice advocacy group EFI Institute. Among those, Iowa and Utah are the first to get their legislation signed into law.

Here’s what you need to know:

Different states, different rules

ESAs all have the same basic framework: The government puts money into an account for a student that parents are then able to use for education outside the public school system.

However, even among the relatively few states so far that have ESAs, there are different qualifications and standards. 

Mississippi, for example, offers ESA accounts of around $6,800 only for special needs students through its Equal Opportunity for Students with Special Needs Program.

In New Hampshire, an ESA setup called the Education Freedom Account Program allows those in low- and middle-income households to open accounts. 

The ESA movement picked up a lot of steam last year with Arizona becoming the first state to offer universal accounts with no restrictions. Parents can sign up and receive a certain amount of money to take their children out of public school and invest in homeschooling, online education and private school tuition. 

That program has become the standard that school choice advocates argue other states need to emulate. 

Last month, a wave of ESA legislation was introduced across the country.

Jonathan Butcher, the Will Skillman Fellow in Education at the conservative Heritage Foundation, said Utah and Iowa’s programs, the first approved this year, are more correctly identified as “account-style” programs.

In a normal-style ESA account, parents are able to save money from year to year. When their child is in middle school, they might decide to save more knowing high school will be more expensive. 

In Utah, $42 million was allocated to the ESA program, with anyone able to apply but priority given to low-income families. The money, however, does not roll over year after year.

In Iowa, the money in an ESA account, which will be around $7,500, has to go towards private school or associated costs — not homeschooling or other educational options.  

“I think both Utah and Iowa are excellent programs. It’s very exciting to see these become a reality for students,” Butcher said. “I would just say they’re account-style, right? I think the most positive thing, the most beneficial thing about these particular programs is that they are universal.”

He added that in Arizona parents have the freedom to save and spend the money more widely. While parents still need to take their children out of public school to access the funds, they can use it for certain “public school services.”

“So you can use the account and say, ‘Hey, look, I’d love for my child to take Spanish at this local science school because they have a great Spanish program,’ or ‘I’d love for them to be able to participate in you the football team or band or whatever.’ And so they’ll use the account to pay for that contracted service,” Butcher said.

At least 10 other states have some sort of ESA legislation before them, from expanding ESA eligibility in Florida to creating brand new programs in Washington.  

ESAs are largely a partisan issue

Republicans, who are far more supportive of school choice and skeptical of public schools in general, are unsurprisingly also the primary backers of ESAs.

Democrats, on the other hand, raise multiple concerns, as do teachers’ unions. They say ESAs are simply school vouchers by another name.

One of their objections is that public taxpayer money is used to fund individuals going to private schools, where the institutions can pick and choose who gets accepted. 

“Children who are special needs, who may have mental health issues, who may have physical disabilities or whose parents don’t meet the criteria of the religious institution can be denied admittance to that private school,” Iowa State Education Association President Mike Beranek said. 

“And so that’s very hard to understand why these private institutions who will be receiving public dollars do not have the same requirements as a public school,” he added. 

Another issue raised — one that has given Republican states such as Texas difficulty in implementing ESAs — is rural residents.

“In many of our rural areas here in the state, there is not access to a private institution. So, in real terms, in practice, people who are in our rural communities will be subsidizing parents who live in larger areas, larger urban areas, suburban areas that have a higher frequency of private institutions,” Beranek said. 

Perhaps the biggest concerns raised by opponents of ESAs is they take away money from public schools and there isn’t enough transparency on how the money is used. 

“My primary issue being as a classroom teacher and a parent is that it does directly defund our local public schools,” said Beth Lewis, director of Save Our Schools in Arizona.

“A second reason why the ESA voucher is a problem is that there’s no transparency or accountability, and that’s baked in by design. So we have no idea how taxpayer dollars are being used, what kind of curriculum is being taught, whether standards are being met, whether teachers have fingerprint, background checks, or credentials,” Lewis added.

The push has grown since the pandemic

Parental choice in education has become increasingly popular since the beginning of the coronavirus pandemic, as homeschooling and private school enrollment rose due to a myriad of factors, such as school closings and mask mandates.

“Following the COVID remote schooling and all this disruption to schooling that happened during the more active period of the COVID pandemic than what we’re in now, it got sort of a lot of parents agitated, and I think created a little bit of a political movement around parental choice in schools,” said Sarah Reber, Joseph A. Pechman Senior Fellow and former David M. Rubenstein Fellow in Economics Studies at Brookings Institution.

Republicans have seized on discontent with the public school system, fueling ESA legislation in multiple states.

Advocates for ESAs argue this helps gets students out of public schools, particularly ones that are failing or parents don’t feel align with their values or goals for their child, a message that advocates say resonates with parents more since the pandemic.