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Education Savings Accounts

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An innovative choice program that empowers families with the financial freedom to choose the right school or learning environment for their child.

Education Savings Accounts (ESAs), which were first introduced in Arizona five years ago, place state dollars designated for a child’s education in a personal account that parents can manage to cover the cost of customized learning. Account funds can cover multiple education options, including private school tuition, online education, tutoring and dual enrollment. ExcelinEd promotes the expansion of ESAs in states as a supplemental way for parents to care for their child’s unique needs. ESAs create an entirely flexible approach to education, where the ultimate goal is maximizing each child’s natural learning abilities.

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About ESAs

1. What is an Education Savings Account (ESA)?

Education savings accounts (ESA) are an innovative way to bring customization to K-12 education. Through an ESA, parents are able to direct their child’s funding to the schools, courses, programs, and services of their choice. Parents are also able to save unused funds for future K-12 and higher education expenses — creating an incentive for parents to judge all K-12 service expenses not only on quality but also on cost. By allowing parents to plan for their child’s unique needs, ESAs create a personal approach to education, where the ultimate goal is maximizing each child’s natural learning abilities.

2. How is an ESA different from a voucher program or a tax-credit scholarship?

Traditional choice programs (vouchers and tax-credit scholarships) allow parents to choose among participating schools. While this is an important improvement over the way public schools are organized, voucher and tax-credit programs are school choice programs. An ESA is an educational choice program. Through an ESA, parents can direct their child’s funds to a private school – just like a traditional choice program – but they also have the ability to direct the funds to tutoring, online courses, costs associated with college entrance exams, therapies for students with special needs, textbooks, curriculum, college savings, and many other authorized uses. Through an ESA program, parents are no longer relegated to School A or School B – they are able to completely customize their child’s education.

Cost-Conscious Consumer
In a traditional choice program, parents are given a scholarship amount that covers the cost of tuition or an amount set by the state, whichever is less. If a parent is entitled to a $6,000 voucher and they are deciding between a school that charges $6,000 or $5,000, the cost is not likely to play a role in their decision – they benefit nothing from economizing and the school has no incentive to charge less. This has resulted in a “use it or lose it” mindset in K-12 education – a mindset that is more interested in the money going into a school than the results coming out of it. But by giving parents control over their child’s funds, ESAs give parents an incentive to economize. The $1,000 difference in tuition now makes a difference because that’s money that could go towards tutoring, an SAT prep course, or college savings. Schools and services also have a reason to cut costs and look for efficiencies to attract parents with more competitive prices. ESAs embrace basic economics, and will lead to new, better, and cheaper educational options.

3. Where are ESAs being used? 

Five states have enacted ESA programs, each with their own rules regarding eligible participants and uses. The first program was created in Arizona in 2011, Florida followed in 2014, and three states created programs in 2015: Mississippi, Tennessee, and Nevada. The Nevada program extends eligibility to all 450,000+ public school students in the state eligible – making it the country’s most expansive K-12 choice program ever enacted.

Real Results

In Arizona, where the ESA program originated, parents shared what they thought of the program.

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In Florida, the state’s ESA program is changing lives.

“These scholarships empower moms and dads of students with disabilities with the flexibility to create education plans custom-made for their children — plans to help these unique boys and girls succeed in school and in everyday life. PLSAs will be life-changing for my family and potentially thousands of others in our state.”

 Julie Kleffel, Florida mother of a special needs student using a Personal Learning Scholarship Account (Florida’s ESA program).

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