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The current state of public education has been a hotly debated topic since the COVID shutdown in 2020. Reading and math scores have dropped in the United States, further widening the gap between high-income and low-income students. This change has added fuel to the school choice movement. During her tenure in the Trump administration, former Secretary of Education Betsy Devos unsuccessfully pushed for passage of “school choice” bills, but that hasn’t stopped changes from occurring at the state level. Several states are passing Education Savings Account bills that provide funds for parents to send their children to private schools.

 

What are education savings accounts?

K-12 education savings accounts (ESAs) are funds provided by the government to pay for educational expenses. The public funds are deposited into private savings accounts that parents can use on private school tuition, tutoring, or school supplies (approved uses vary from state to state). 15 states currently have ESA programs; 7 states have universal or almost-universally available programs, and 8 states restrict the programs to families of students with special needs or low-income families.

The table below contains an overview of states that enacted or modified ESA programs in 2023 and approximate funds available per eligible student:                                         

State	Eligibility	Funds Available
Arkansas	All students	$6,600 per student
Utah	All students	$8,000 per student
Iowa	All students	$7,500 per student
Montana	Students with special needs	$5,000-$8,000 (based on several factors)
South Carolina	Low-income household	Up to $6,000
Florida	All students	$7,500

 

More ESA Legislation to Come

The Alabama Senate is discussing passing the CHOOSE (“Creating Hope and Opportunity for Our Students’ Education”) Act. This bill would a tax refundable credit of $7,000 per student that could go towards private school tuition, textbooks, or tutoring, and $2,000 for a homeschool student. A Wyoming bill would provide families with up to $5,000 annually.

Meanwhile, the Texas House has recently blocked Governor Abbott’s attempts to implement ESAs. Texas Republican John Raney stated, “I believe in my heart that using taxpayer dollars to fund an entitlement program is not conservative, and it’s bad public policy.”

 

The Debate over ESAs

Proponents of ESAs argue that they provide families with economic assistance towards choosing the best educational program for their child. The funds allows parents to send their child to a school they see as a better alternative to their local public school, or use the money for supplemental academic services.

However, opponents to ESAs argue that the money is being funneled away from public schools that desperately need the support and into the pockets of parents who can already afford to send their child to private school. The average cost of private school is $12,733 per year, and ESAs will usually only cover half of this cost. The remaining tuition cost would likely be too great a burden for low-income families to bear even with the assistance of ESAs.

Private schools also have significantly less state oversight: teachers don’t have to be state-certified and students don’t have to take state exams. While this doesn’t necessarily indicate that the education in private schools is less rigorous, there is a possibility that ESAs will allow for the creation of low-quality private schools. Private schools also have the ability to discriminate in admissions (within constitutional bounds), which leads to school choice for some but not all students. Additionally, private schools might be too far away to benefit rural students, leading to unequal distribution of school choice.

Education in the United States already isn’t equal for all students. School funding largely relies on local property taxes, tying educational resources to the economic resources of an area. This system is not benefiting all students, so something does need to change in how we structure educational funding. However, it’s not clear that ESAs are the solution to any of these shortcomings.

 

Suggested Citation: Deanna Palma, Education Savings Accounts: The Poison Pill for Public Education?, Cornell J.L. & Pub. Pol’y, The Issue Spotter (March 7, 2024), http://jlpp.org/blogzine/education-savings-accounts-the-poison-pill-for-public-education.