by (in alphabetical order) John Garrett Clawson, Reynaldo de la Garza, Victoria Keller, Sarah Pollock, Laurie Roberts,
Started: September 6, 2016. Last updated: September 20, 2016
Definition
Education Savings Accounts (ESAs) are a /wiki/spaces/edpolicy/pages/27033626 mechanism that puts state funding for educational expenses in the hands of parents. Funds are calculated based on the amount the state would have spent on a given student in their public school. That money is diverted from the school and placed in an account. Parents can then access and use the funds for a variety of public and private education services.
While SB 1178 ultimately failed to pass in the Committee on Public Education in the Texas House of Representatives in 2015, the bill outlined a proposed ESA program that may be modeled in subsequent proposals. In 2016, the 85th Texas Senate was tasked with investigating the academic success and fiscal impact of similar programs in other states, including Arizona, Mississippi, Nevada, and Tennessee (Patrick, 2016). Florida also has several school choice programs, including tax credit scholarships, in addition to the Personal Learning Scholarship Account program.
How it Works
Parents who elect to enroll in the proposed program would receive a debit card with funds that may be applied to educational expenses. Unused funds roll over and may be applied to higher education expenses.
Arizona, Mississippi, Florida, Oklahoma and Tennessee limit eligibility to special needs, low income students, and/or students in low performing school districts, but the program to be proposed in the 2017 Texas legislature would be open to all students meeting the following conditions:
- Students already enrolled in public school OR
- Students entering the school system (kindergarten or first grade)
Amount Per Student
States (with the exception of Mississippi) determine the amount for each student based upon the average amount the government spends on each student attending public school. This amount varies by special need and poverty level.
- Arizona – 90% of the amount that would have gone to a public school for a given student (FN SB 1363, 2013)
- Mississippi - $6,500
- To be adjusted annually in proportion with public student spending (SB 2695, 2015)
- Nevada – up to 90% (SB 302, 2015)
- Tennessee – 100% (SB 431, 2015)
- Florida (Personal Learning Scholarship) – $9,000 (SB 850, 2014)
SB 1178 suggests that Texas students would receive 80% of average funding, with disabled students receiving the full 100%.
Eligible Expenses
Parents may spend ESA funds on a variety of educational costs including private or charter school tuition, textbooks, curricula, and tutoring. Parents can also use funds to pay for private tuition or specialized therapy for children with disabilities. Consumables (like pens and paper), transportation, and technological equipment are not eligible expenses under SB 1178.
ESAs vs. Vouchers
ESAs are often confused with vouchers. The primary distinction is that vouchers can only be used for tuition, while ESAs can be used for a variety of educational and even therapeutic expenses. Another distinction is that vouchers transfer tuition from the government to the student's chosen school, while ESA funds are controlled by parents through a government-funded debit card.
Legal issues
States that have passed legislation adopting ESAs include Arizona, Florida, Mississippi, Nevada and Tennessee. Legislation is typically challenged on a constitutional basis; 40 states have made amendments to or included provisions in their constitutions that prohibit public funding of "religious worship, exercise or instruction." Plaintiffs argue that because money diverted from public schools to fund ESAs can be spent on tuition at religious private schools, such laws are unconstitutional in states that have such a stipulation in their constitution. Similar forms of school choice, such as vouchers, have also been challenged on such basis in a larger number of states.
At the present time, legislation passed in Arizona, Florida, Mississippi, and Tennessee have been been upheld by the court in each of those states. In September, 2016, Nevada's ESA program was deemed unconstitutional - the state supreme court found that the law violated the state constitution's provision that all "school money" designated in the state's general fund is required to go to public schools.
Evidence
ESAs are a new reform, and little direct evaluation of their effects currently exists. Indirect evidence, however, can be gleaned from evaluations of voucher programs. Although vouchers are limited to tuition, while ESAs are less constrained, early evidence from Arizona has found that two-thirds of funds are being spent on tuition, even though eligibility in Arizona was initially limited to disabled students. In a universal ESA program like the one proposed in Texas, it seems likely that an even larger share would be spent on tuition, so that the effects of ESAs would be similar to those of tuition-only vouchers.
A summary of the evidence on vouchers is given on a separate page.
References
S.B. 1178, Texas 84th Cong. (2015).
S.B. 2695, Mississippi 114th Cong. (2015).
S.B. 302, Nevada 302nd Cong. (2015).
S.B. 431, Tennessee 431st Cong. (2015).
Arizona original bill – http://www.azleg.gov/legtext/50leg/1r/bills/sb1553h.pdf
Tennessee – https://www.edchoice.org/blog/florida-governor-signs-nations-second-esas-expands-tax-credit-scholarships/
Florida – https://www.tn.gov/assets/entities/education/attachments/IEA_Parent_Handbook_PublicReviewDraft.pdf
Arizona – https://www.alec.org/article/education-savings-accounts-upheld/
Oklahoma – http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=477431
Mississippi – http://www.mde.k12.ms.us/ose/esa
DeForrest, Mark Edward. "An Overview and Evaluation of State Blaine Amendments: Origins, Scope, and First Amendment Concerns." Harvard Journal of Law & Public Policy 26.2 (2003): 551-626.