February 26, 2021
Everything you need to know about Education Savings Accounts (ESAs)
There are thousands of underperforming schools across the country. And that matters because the students they’re supposed to educate aren’t getting the tools they need to succeed. While some families can afford to send their child to a better school, low-income students don’t always have that option.
Americans want all children to have a quality education that prepares them for college, a career, and life. How can we reach that goal?
Some argue the answer lies in more funding for education, but America already spends more than any other country in the world. And we’re not seeing results. According to Pew Research, the US ranked 38th in math and 24th in science when compared against 71 other countries.
If more money isn’t the answer, what is? One solution is empowering parents to make the best educational choices for their children through Education Savings Accounts (ESAs). ESAs actually save taxpayer money while giving families the education options they need and deserve.
In the United States, where you live determines where you go to school, and in some cases, the quality of education you’ll receive. Some parents can afford to send their child to a private school if their public school is inadequate, but low-income families that are zoned for an underperforming public school may not have the resources needed to send their child somewhere else. America’s one-size-fits-all approach to education often hurts minority and low-income children the most, who can’t afford to pay for alternate education options. ESAs are a solution to this problem.
Education Savings Accounts, sometimes known as Education Scholarship Accounts, are state-supervised funds that parents can use to pay for a wide variety of education options. The state government deposits a portion of what the state would have spent to send the child to public school into a private account that parents can use for education-related expenses. Parents can use these funds for private school tuition, online learning, textbooks, and even services and therapies for students with disabilities—whatever their child most needs to thrive.
ESAs empower parents by giving them the freedom to choose the education option that best meets their children’s needs.
Arizona was the first state to enact an ESA program in 2011. The program, called Arizona Empowerment Accounts, gave parents of special needs children the ability to find the school that was the best fit for their child by applying the funds towards the cost of that school. The Goldwater Institute pioneered this program and has been working to ensure even more children have access. In February 2021, the Arizona Legislature passed legislation that would extend Arizona’s ESA program eligibility to include low-income communities—giving even more students education opportunity in the Grand Canyon State.
Nine states have active ESA programs: Arkansas, Arizona, Iowa, Florida, North Carolina, Ohio, Oklahoma, West Virginia, and Utah.
A trip to the doctor’s office confirmed Amanda Thornton’s suspicions. Her five-year-old son, Riley, had autism. Shaken but undeterred, Amanda was determined to find the best school for Riley. She and her husband Mark knew their public school could not give him the special attention he needed to help manage his behavior issues. Through her research, Amanda heard about Mississippi’s ESA program.
In February 2019, Riley received an ESA. Amanda and Mark enrolled him in Spectrum Academy, a school for children with autism. Riley is learning to communicate and is doing well in school. Amanda noted in an interview with Empower Mississippi: “Riley has to have one-on-one attention. He doesn’t do well if he doesn’t have it. He would fall between the cracks in a public school.” Amanda and Mark said they would not be able to afford Spectrum’s tuition without the help of the ESA.
Riley is just one example of all the special needs children ESAs have helped. There are countless others. Students with special needs thrive with individualized attention and a tailored education environment, something their public school can’t always provide. ESAs empower parents of children with disabilities to find a school that best fits their child’s unique needs.
ESAs also help families and children with the least. They give poor families the same opportunities available to families with more resources. With an ESA in hand, low-income parents have options for where to enroll their child—in many cases, that’s a school where they have a better chance to succeed.
Many parents are frustrated with their child’s learning experience during the coronavirus. While many schools have reopened, some remain closed or are implementing a mix of in-person and virtual learning. If a parent is dissatisfied with their child’s public school—due to a lack of reopening or for some other reason—an Education Savings Account would give those parents the resources they need to send their child to another school. ESAs give parents options at a time when they need them more than ever. The appetite for those options is growing. According to polling from Heart +Mind Strategies, nearly half of Americans favor an approach to education where public school is not the only option.
In addition, many parents are taking money out of their own pockets to pay for education expenses related to virtual learning. Many parents have lost their jobs in the last year and are struggling financially. ESAs can help parents pay for education costs during this difficult time.
States are grappling with budget shortfalls from the coronavirus. Education Savings Accounts can help alleviate state spending on education while improving education options for thousands of students. Here’s how it works.
Each state sets aside a certain amount of tax dollars for each student’s education. With an ESA, that money directly follows the student. However, the state government does not give an ESA recipient all of those allotted tax dollars, only a percentage. The rest goes back to the public school that child would have attended.
In Arizona, for example, the state spends $10,120 per public school student. ESA recipients received an average award of $6,148 for non-special needs students in 2019—significantly less than what the state usually spends to send that child to public school. The remaining amount, $3,972, goes back to the public school, even though that child won’t attend school there. ESAs reduce the amount the state spends per child, saving the state money and alleviating some of the budget pressures public schools face.
ESAs can also help private schools survive the coronavirus. Due to the economic challenges of the coronavirus, many families can no longer afford private school tution. Without the income they need to operate, many private schools could close. Without private schools, families lose a valuable choice in where they can send their child to school. But these closures would also be devastating to public schools, as private school students will have to enroll in the public system, which is already facing significant budget and capacity challenges of its own. ESAs can help parents afford tuition so these private schools can stay afloat.
Some critics claim ESAs will take money away from public schools, who often struggle with reduced funding and smaller budgets. But research shows this isn’t the case. As noted above, ESAs typically take a portion of a state’s per pupil funding and give it to parents. The remaining amount goes back to the public school, even though the child is no longer attending school there. Here’s another good example from the Grassroot Institute of Hawaii:
“In Hawaii’s current system, every student is assigned a dollar amount—$11,823 as of 2016—which follows the student to his or her public school; this is known as per-pupil funding.
Nalu goes to Wahiawa Elementary School, which is a public school. His parents decide to withdraw him and send him to Ho’ala School, a private school. With an ESA law in place, Nalu’s parents would get $8,867 to pay for the tuition. Meanwhile, Wahiawa Elementary School will keep $3,000 even though Nalu is no longer going to school there. With his absence, the school gets more money to spend per student.”
A study by the Goldwater Institute pointed out that public schools actually benefit from ESAs. Goldwater noted:
“The nation’s most established ESA program has actually benefitted public schools by redistributing funds back to remaining public school students, directing program savings to public school IT infrastructure, and helping to serve one of the most high-need, high-cost student populations in the state—all while decreasing taxpayer costs and safeguarding public funds.”
What is an Education Savings Account?
EdChoice
Education Savings Accounts: A Promising Way Forward on School Choice
The Heritage Foundation
Guide to the Issues: Education Savings Accounts
Alabama Policy Institute
The Facts on Education Savings Accounts
Beacon Center of Tennessee
Education Savings Accounts Will Give American Families Certainty
The Buckeye Institute
ESA Facts
Cardinal Institute for West Virginia Policy
Education Savings Accounts for West Virginia Students with Special Needs
Cardinal Institute for West Virginia Policy
Education Savings Accounts Are an Innovative Way to Provide Flexible, Safe K-12 Options
Cascade Policy Institute
Education Savings Accounts: A targeted solution during the coronavirus crisis
Center of the American Experiment
State leaders should seriously consider Special Education Savings Accounts to better serve Minnesota’s most vulnerable students
Center of the American Experiment
How Education Scholarship Accounts (ESAs) Work
Commonwealth Foundation
Understanding Back on Track ESAs
Commonwealth Foundation
Nine Irrefutable Truths About Education Savings Accounts
Commonwealth Foundation
Save Our ESA: These kids are going to grow up to be productive citizens because of the ESA
Empower Mississippi
Students Benefit from ESA Program
Empower Mississippi
Education Savings Account: Providing School Choice to Children and Families Who Are Looking for a Different Option
Georgia Center for Opportunity
Education Savings Accounts: Getting ‘More’ for Georgia Students
Georgia Public Policy Foundation
The Public School Benefits of Education Savings Accounts: The Impact of ESAs in Arizona
Goldwater Institute
Education Savings Accounts: A New Way Forward
Grassroot Institute of Hawaii
Popularity of Florida’s ESA Program Shows It’s Time for Universal Expansion
The James Madison Institute
Funding Students Instead of Systems: Education Savings Accounts In North Carolina
John Locke Foundation
Will Education Savings Accounts Decimate Public Schools? Putting ESA Funding in Context
Josiah Bartlett Center for Public Policy
Michigan Parents Want Educational Options
Mackinac Center for Public Policy
Education Savings Accounts Provide Families More Schooling Options Amid COVID-19
Maine Policy Institute
Education Savings Accounts and the Future of School Choice in Maine
Maine Policy Institute
Education Savings Accounts
Nevada Policy Research Institute
With Schools Closed, Education-funding Reforms Could Alleviate Parents’ Burdens
Oklahoma Council of Public Affairs
Learning is a Joy: What’s an ESA?
Palmetto Promise Institute
Education Savings Accounts Would Help Louisiana Students During COVID-19
Pelican Institute
Removing Barriers in Nebraska Part Four: Taking Lessons on Education Options
Platte Institute
So…What Is an Education Savings Account?
Show-Me Institute
What are ESAs?
State Policy Network
Sutherland Signs Coalition Letter Urging Expansion of 529s (Education Savings Accounts) for COVID-19 Home Learning
Sutherland Institute
How Do ESAs Work?
Tax Education Foundation of Iowa
Education Savings Accounts for Texas
Texas Public Policy Foundation
Education Money for Families: How Education Savings Accounts Can Help Children Learn in Washington State
Washington Policy Center
Education Savings Accounts: Empowering Kids and Saving Money in Connecticut
Yankee Institute
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