Arizona's New Frontier for Education

Report Education

Arizona's New Frontier for Education

September 10, 2013 2 min read
Lindsey Burke
Director, Center for Education Policy
Lindsey Burke researches and writes on federal and state education issues.

In 2011, Arizona Governor Jan Brewer signed S.B. 1553, creating the nation’s first education savings accounts (ESAs) for children with special needs. While traditional voucher or tax credit scholarship programs offer parents and their children the option to choose a private school, ESAs give families the flexibility to choose from a variety of educational products and services.

Similar in design to health savings accounts (HSAs), education savings accounts are bank accounts which include a debit card that the state awards to parents of eligible children. Once a family decides to withdraw from the Arizona public schools, the state deposits 90 percent of a child’s per-student funding from the state education formula onto a pre-paid card, and parents can use the card to make purchases directly or through online services like PayPal.

Parents can use ESA funds, which are deposited into their accounts quarterly, to pay for a variety of education services and providers including private-school tuition, private tutoring, special education services, homeschooling expenses, textbooks, and virtual education, enabling them to customize an education plan for their child’s unique needs. Parents may also roll over funds from year to year, and can use the money to invest in a college savings plan to pay for college tuition in the future.

Arizona law lists 11 eligible educational expenses for education savings accounts:

  • Private school tuition and fees;
  • Textbooks;
  • Educational therapies;
  • Tutoring services;
  • Curriculum materials, including manipulatives like blocks used for math lessons or map materials for geography and history activities;
  • Online classes;
  • Standardized test fees;
  • College savings plans;
  • College tuition and fees;
  • Fees for administrative management of the accounts; and
  • Public school classes and extracurricular activities.

In 2011, legislators allowed only children with special needs to be eligible for the accounts. In 2012, the ESA program expanded to include children from failing schools, children of active-duty military parents, and children adopted from the state foster care system. This expansion doubled the number of eligible students to more than 200,000. Today, the accounts serve children who are the most vulnerable to falling through the cracks of the traditional public school system.

All students should be eligible for an education savings account, just as all students are eligible to attend a public school. The same funding source is used for both—so why should some students have more educational options than others?

Education savings accounts are the most innovative education choice option in the U.S. The accounts provide student-centered funding—not just the funding for physical school buildings and classrooms. Funding children instead of institutions gives families the flexibility to direct every dollar of that funding to their child’s education.

Moreover, early data from Arizona—the only state to date with education savings accounts—shows that parents are doing just that, and are customizing their children’s educational experience. Approximately 34 percent of families in the ESA program use their funds to finance multiple education services and providers at once, creating a tailored educational experience for their children. Such control over education funding ensures parents have access to options that meet their children’s unique learning needs, and ultimately can move beyond the worthwhile goal of school choice to choice among education service providers, courses, teachers, and methods.

The level of customization that ESAs afford brings American K-12 education into the 21st century and ensures no child is relegated to the limited effectiveness of the existing monopolistic system that is all too prevalent in states across the country.


Lindsey Burke
Lindsey Burke, PhD

Director, Center for Education Policy