NCPA - National Center for Policy Analysis

Empowering Parents through Educational Choice

September 10, 2013

As parental choice in education takes root in more communities throughout the United States, education savings accounts (ESAs) have taken on greater importance as the funding mechanism for customized learning. This is especially true in Arizona. The state's version of ESAs, known as Empowerment Scholarship Accounts, has enabled families to completely tailor their children's educational experience, says Lindsey Burke, a Will Skillman fellow at the Heritage Foundation.

Arizona's ESAs allow parents of certain students to withdraw them from their public or charter schools and have 90 percent of the funds the state would have spent on them deposited into Empowerment Scholarship Accounts.

  • When ESAs were first enacted in 2011, the option was available only to parents of children with special needs.
  • A year later, eligibility was extended to active-duty military families, foster children and parents with children in public schools graded D or F under the state's accountability system.
  • In June 2013, the Empowerment Scholarship Accounts were expanded further to include incoming kindergarten students who meet the eligibility requirements.

Parents can use Empowerment Scholarship Account funds to pay for the following education-related expenses:

  • Private school tuition and fees.
  • Education therapy services and aides.
  • Private online learning courses.
  • Advanced placement exams, norm-referenced achievement tests and college admission exams.
  • Tutoring, textbooks and curriculum.
  • Contributions to a 529 college savings plan.
  • College tuition and textbooks.
  • ESA management fees.
  • Individual public school classes and programs.

Parents can rollover unused Empowerment Scholarship Account funds from year to year, saving unspent funds for future education-related expenses. The rollover option "creates an incentive for parents to judge all K-12 service providers not only on quality but also on cost." ESAs are the only education choice policy to date that affords consideration of "opportunity costs," which encourages families to pursue the best education for the best value to maximize their ESA dollars.

Source: Lindsey M. Burke, "The Education Debit Card -- What Arizona Parents Purchase With Education Savings Accounts," Friedman Foundation, August 2013.


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