This article appeared as "Educational Savings Accounts" in the Fall 2024 issue of Independent School.
It’s hard to talk about parents and independent schools without talking about cost, and many initiatives have been designed to offset the costs of private education. Most recently, states have been passing school choice laws at a rate we’ve never seen. According to EdChoice, as of June 2024, 33 states and Washington, DC, were providing parents and students with access to various private school choice programs. And because of a 2017 tax law change, families can now use 529 plans for K–12 tuition.
The newest and fastest growing type of initiative is the Education Savings Account (ESA), now offered in 17 states. With ESAs, state governments make deposits into savings accounts that families can use to pay for private school tuition, homeschooling supplies, tutoring, and a range of other expenses. These amounts are often less than a school’s full tuition but can make a profound difference in the affordability of school.
While families might be enthusiastic about ESAs, it’s important for schools to evaluate a program before participating. ESAs can be politically charged in part because they operate like traditional vouchers. Further, unlike tax-related initiatives that are often privately pursued by families and don’t require anything from individual schools, ESAs require active participation of schools and many states publish a list of schools that receive these funds, which raises the public profile of their participation. Overall, the rise of ESAs and politics around school choice have prompted some states to look more closely at the oversight of private schools receiving the funds and to attempt to add requirements that reduce school control and independence.
Independent schools with a school choice program in their state should evaluate whether participation aligns with their school mission and values by thinking through various questions and scenarios. Will it help their access and affordability goals? Will the program require a school to conduct testing or alter any school practices, such as hiring, admission, or curriculum? Could the state’s politics potentially trigger such requirements later?
Schools should also consider how much funding is provided and whether they will need to supplement with financial aid; how they’ll support admitted students if the school or state decides to discontinue participation; how to respond to questions about the school benefitting from the program; and how to conduct outreach to inform families about the program and the educational benefits the school provides.
Read More
For more legal news, go to nais.org/legal-news.