Over the past few years, several states throughout the country have passed or expanded innovative Education Savings Account (ESA) programs.
These programs provide scholarships for K–12 students in the state for educational purposes, typically for private school tuition, tutors, therapists, curricula, and other educational goods and services. States with ESA programs, as well as those considering these programs, should consider requiring the adoption of rules for program administration. Otherwise, the administration of the program is left to ad hoc policies and procedures by the program administrator that are subject to change at any time.
Official rulemaking offers several benefits, particularly ensuring transparency and consistency, as rules are publicly developed through a formal process that includes stakeholder feedback, such as from parents, private schools, and education service providers.
Rulemaking provides a place for ESA families to participate and provide feedback in the implementation of the program they are using to educate their children. It goes without saying that ESA program administrators need to hear from ESA families—those who actually use the program. Rulemaking also makes policies and procedures more consistent from year to year, providing more certainty for ESA families, private schools, and education service providers.
Significant policy changes month to month or even year to year undermine the success of and demand for these programs. Further, rules adopted by a regulatory body can provide needed oversight to ensure program administrators comply with ESA statutes and rules.
However, rules should focus on program administration and not seek to establish policy, unless specifically authorized in statute. Rules should be designed to implement relevant ESA statutes and therefore should not limit the flexibility of the program or create policies that conflict with legislative intent. Especially in regard to allowable educational expenses and educational service providers, rules should not restrict the program further than what the statute permits.
In other words, the rules should not disallow what the statutes allow. Ultimately, rulemaking fosters accountability, transparency, and consistency. It ensures that changes are made thoughtfully, with input from all relevant stakeholders.
This paper analyzes the adopted administrative rules in Arizona, Alabama, and Arkansas for their respective ESA programs. Special attention is given to whether they focus on the program administration or whether they establish policies that restrict program flexibility. The paper highlights strengths and weaknesses of these rules and concludes with specific policy suggestions for ESA rulemaking.