Frequently Asked Questions
An ESA is like a debit card for education. It enables you to spend your child’s education funding, instead of a government bureaucrat. Through an ESA, state deposits a portion of the funds that would have been spent on a child in the public school into a parent-directed account. Parents can then tailor their child’s education to be as unique as they are.
Funds are deposited quarterly on a restricted-use debit card that the parent can use on any qualified education related product, service, or provider.
Parents can spend funds on private school tuition, online learning, textbooks, curricula, individual public school courses, educational therapies, and a host of other education-related services and products. The unique feature of an ESA is that any unused funds can be rolled-over from year-to-year, and can be rolled into college savings account. Student can then use the money to pay for college.
If a student doesn’t attend college, unused funds revert back to the state.
No. A parent can only use the debit card on allowable expense and cannot receive cash back.
While this varies from state to state, typically providers and services and products are included on a white list maintained by the state. Education providers can asked to be on the white list, or, parents can ask to have a service or product be an allowable expense. For example, Rosetta Stone is now an allowable purchase in Arizona after it was added, upon parent request, to the white list. Requests are sent to the state treasurer.
Funds are deposited into the parent-controlled accounts quarterly, and only after parents have submitted receipts for the preceding quarter’s spending.
In the event there is a misuse of funds, the subsequent quarter’s allocation can be used to rectify the spending error. In the event of evidence of egregious misuse of funds, the state can audit accounts.
ESAs use currently allocated education funds and simply allows those funds to follow the child to education options of choice. The public school system retains the funding for fixed overhead costs. If an ESA program is introduced in a state, the public schools retain their currently allocated funds for an entire year, and then have an opportunity to adjust to a lower student count. The fact is that there are both fixed and variable expenditures. The schools focus on fixed costs when students leave and the variable costs when more students enroll, but they can’t have it both ways. All costs are variable in the long run and schools already experience fluctuations in enrollment all the time. They will manage, as they have in the two dozen states with private school choice laws already.
It allows for that public school to be more responsive to student who choose to remain in a given school. There is no evidence that any educational choice law has had a negative impact on public schools. In fact, 22 out of 23 studies from respected researchers at Harvard, Stanford, Northwestern University, the University of Arkansas, and more have found small but statistically significant positive impact on the performance of public school students after the introduction of school choice laws. One study found no measurable difference. None found any harm. Less than 1% of students are participating in the ESA programs in AZ and FL. The annual fluctuation in enrollment in public schools varies more than that.
Kids in rural areas often have the fewest opportunities to access advanced placement courses and other specialized education options. ESAs enable these families to have the same wide world of opportunities available to students in thriving cities.
ESAs enable teachers to be more innovative and flexible with how they educate children and provide them the opportunity to expand their impact to students across the state. As an added benefit, teachers would have the opportunity to earn extra money by tutoring, teaching online courses, and facilitating other extracurricular options.