Giving Compass' Take:

• Matt Beienburg unpacks the impact of education savings accounts in Arizona which he found produced benefits for students and taxpayers. 

• How could education savings accounts better serve students? Is this a solution for education challenges in your state? 

• Learn how education savings accounts can serve students with disabilities? 

They’ve been praised as a lifeline for students in need, derided as a harm to America’s unionized education establishment, and debated vigorously in state legislatures across the country.

Known commonly as education savings accounts (ESAs), they are now accessed by thousands of families in the state of Arizona, while in 2017, activists gathered thousands of signatures and successfully campaigned against making them available to all students in the state. In 2019, Tennessee legislators expanded them to low-income pupils, while in West Virginia, union leaders organized a teacher strike to prevent them and other school choice measures from even taking shape.

Yet amid the enthusiasm and emotions for and against ESAs, few have a thorough understanding of their overall impact beyond a handful of competing claims such as “they give families a choice in education” or “they hurt public schools.” This report offers a uniquely detailed account of their impact on families, schools, and state taxpayers in the country’s most developed education savings account model, Arizona’s Empowerment Scholarship Account program.

Among the report’s key findings:

  • ESAs served over 6,400 students in Arizona in FY 2019, including over 3,700 with special needs and more than 800 whose families serve in the armed forces or have fallen in the line of duty.
  • ESAs complement existing public school choice options: District schools are 15 times likelier to “lose” a student through competition with another public school than to an ESA, among eligible populations.
  • ESA families received an average award of $6,148 for non-special needs students in FY 2019, requiring substantially less in taxpayer funding than Arizona’s $10,120 public school average per pupil spending the same year.
  • Arizona’s FY 2020 budget directs $3 million of ESA savings to overhaul the state’s IT system used to calculate the payments to every single public school in the state, benefitting over 1.1 million public school students.
  • ESAs increase per pupil public school spending by redistributing state and federal dollars back to remaining public school students. From state sources alone, ESAs redirect over $600 per participant back to remaining public school students for teacher pay and other operational uses.
  • ESAs ease the costs of enrollment growth and school construction in Arizona’s public school system, which currently increases state taxpayer costs by over $180 million per year, limiting the funding that is available to increase per pupil expenditures.
  • ESAs often reduce budget pressures on public schools by serving students with severe disabilities, one of the most high-need, high-cost populations, whom districts state they can serve only by redirecting funds from other students’ instruction.
  • Despite headlines to the contrary, Arizona’s ESA program has proven remarkably effective in deploying public funds toward children’s educational needs: Roughly 99 percent of ESA monies are used as intended, with alleged program misspending often involving educational purchases previously approved by the Arizona Department of Education.