Ben DeGrow is a Senior Policy Director of Education Choice for ExcelinEd.
The dust has hardly settled on a fruitful season of policymaking that is yielding rapid growth in education scholarship accounts (ESAs). Across the country, current programs have expanded and new programs launched. Originally, states designed their ESAs for special-needs or lower-income students only. But the newest programs cover all (or nearly all) K-12 students, with eligibility starting this upcoming school year or soon thereafter.
ESAs are the latest innovation in school choice, and they are especially popular with families because of their flexibility. In contrast, vouchers are state-funded coupons that pay only for private school tuition. Tax-credit scholarships also fund private school tuition, where donors, rather than state governments, underwrite the program and receive tax credits for doing so .
Neither vouchers nor tax credits give families real purchasing power to customize education. ESAs can be game changers in that regard. They provide families with funded accounts to spend not only on private school tuition but also on other educational goods and services they can choose to meet their children’s needs. These customizable resources range from tutoring and therapies to curriculum and assessments.
As states continue to expand educational choice in the coming months and years, policymakers need to consider how different programs work with each other, how they could be streamlined and what effect those interactions have on families, students, educators and school leaders.
Twelve months ago, West Virginia stood alone in making its ESA, the Hope Scholarship, available to any student in the state (provided they spend at least 45 days in public school). After a legal injunction temporarily suspended launch of the program, the state’s supreme court restored hope last fall, and ESA funding began to flow to thousands of families.
By that time, Arizona had also taken action, expanding eligibility to all for its decade-old Empowerment Scholarship Accounts. They previously had been reserved for students with special needs as well as those in foster care, on Native American reservations and children of military servicemembers. Within months, the number of applicants to the program more than quadrupled.
In 2023 thus far, four states—Iowa, Utah, Arkansas and Florida—have enacted universal ESAs. Each of these will take full effect within the next few years.
Of these six states, only West Virginia built its universal program from scratch. All other universal ESA states had a history of smaller choice programs. Florida began funding families with the option to choose private education for their special-needs students more than two decades ago. The Sunshine State then adopted its successful Tax-Credit Scholarship Program, which eventually served more than 100,000 low-income students.
Earlier this year, Florida embraced a universal approach, fully expanding access to school choice and now allowing all families of K-12 students to apply for dollars to spend through a multi-use account. To achieve this, different funding sources were brought together to broadly offer the most flexible version of choice, regardless of family income or student need.
Florida’s bold step raises the question for others: What do states do with other existing private choice programs once universal ESAs are on the table? Currently, there is no clear and consistent approach.
Iowa officials say low- and middle-income families can supplement an ESA – which currently requires recipients to be enrolled in a private school – with a modest scholarship through the state’s School Tuition Organization Tax Credit. Yet in Utah and Arkansas, new laws strictly preclude accepting funds from other choice programs. That tracks with Arizona’s more established law, which says students can’t simultaneously benefit from an ESA and a tuition tax credit.
In a few states, the relationship between private choice programs leaves officials with decisions about how best to maximize their benefits for students. One of those states is Indiana, a national leader in private education choice. It currently offers scholarship tax credits that families can use to supplement funding from either a Choice Scholarship voucher or an ESA.
Indiana’s legislature recently expanded voucher eligibility to cover 97% of the Hoosier State’s total K-12 population. Its ESA, launched in 2022, now reaches a similar share of special needs students. However, individual students cannot combine funding from the voucher and ESA.
Indiana’s programs are administered by two different state agencies — the Department of Education for Choice Scholarships and the State Treasurer for Education Scholarship Accounts. For parents who aren’t in the know, this arrangement exacerbates the challenge of connecting students in need with education opportunities. Marketing and outreach efforts could be enhanced by creating a single online landing page for choice program information.
Even more beneficial, Indiana could consider blending the best of Choice Scholarships and Education Scholarship Accounts into one. This approach would give the vast number of voucher-eligible students the same flexible spending power available to the smaller ESA population. That could include access to more innovative educational models, like micro-schools, or funding for transportation to a more traditional school of the family’s choice.
On the other side of the coin, students with unique abilities might find more schooling options to reach their flexible spending potential. At present, some traditionally accredited private schools that already accept vouchers have shown little eagerness to embrace Indiana’s newer ESA program. If Indiana combined its state-funded private choice under one banner, these schools would be encouraged to welcome even more students.
The road each state travels to universal ESAs varies in the amount and type of ground covered. Precursors that come in the form of vouchers or tax-credit scholarships pave the way for customized education opportunities, but they may also require extra time and effort to implement.
And as always, adopting programs is not enough. School choice-friendly states can continue the momentum to expand opportunity by focusing on streamlining families’ access to these much-needed education options.
As a growing number of states have adopted ESAs, it has become increasingly clear that implementation matters. On this webinar, learn the potential benefits and implications of ESA expansion, with both proponents and opponents weighing in to share data, research and insights gained about implementation best practices and challenges.
