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Three Thoughts on Nevada’s ESA Funding: Part 1


• Adam Peshek

Education savings accounts (known as ESAs) are inspiring both enthusiasm and curiosity.

In today’s post Adam Peshek, ExcelinEd’s State Policy Director of School Choice, begins a two-part series answering a few questions about one central element to all ESA programs: funding.


Thanks to the groundbreaking education savings account (ESA) law passed in Nevada this year, any student in public school will be able to voluntarily opt into the program.

Education Savings AccountNevada’s ESA program awards between $5,100 and $5,700 (for low-income and special needs students) to each participating student each year. The money is deposited into a restricted use account, which parents can direct to any combination of school tuition, online courses, homeschooling, tutoring, therapies for students with special needs, industry certifications, dual enrollment, and many other uses. Savings are able to roll over from year, moving away from the “use it or lose it” mentality that plagues our public education system.

But people have a lot of questions around the funding (i.e., here, here and here). Below are a few thoughts.

1) No one is content with the ESA amount. This amount reflects the average amount of money spent by the state on public school children. It does not reflect federal funds (because this is not allowed) or district funds. Nevada’s funding formula is in need of changes. Until that happens, it will be very difficult to attach district funds to students, since each locality will have dramatically different levels of local funding.

2) Utilize partial tax-credit scholarships to increase funding. In addition to the ESA program, Nevada also created a tax-credit scholarship program that allows parents of students under a certain income level to obtain a scholarship worth up to $7,755. However, funding is capped at $10 million over two years, meaning roughly 600 students will be able to participate.

There is nothing in the law that prohibits partial scholarships, and there is no reason why the Nevada Department of Education couldn’t award low-income ESA participants with a $2,000 partial scholarship stacked on top of their ESA. The DOE would merely need to send the $2,000 to the parent’s school of choice for their child, covering a large portion of tuition up front. The parent could then use the ESA to cover whatever is left. An ESA paired with a $2,000 partial scholarship for low-income students would be the same amount of a full tax-credit scholarship and much less than per-student funding in public schools – maintaining the cost savings to the state.

Check in tomorrow for my third and final point on this subject, and head over to our Policy Library to learn more about ESAs.


About the author


Adam Peshek @AdamPeshek

Adam@excelined.org

Adam Peshek is Managing Director of Opportunity Policy at ExcelinEd, where he provides strategic support to state leaders interested in developing, adopting, and implementing policies that increase educational options for children. He has provided expert testimony in more than a dozen state legislatures and is a frequent commentator on ESAs, school choice, and education policy across the country. He is also the is the co-editor of the first published volume on ESAs, Education Savings Accounts: The New Frontier in School Choice. Adam currently resides in Atlanta, Georgia and is a Senior Fellow with the Beacon Center of Tennessee.