Nathan Howard likes “Star Wars” and Legos, proudly recites the names of all 50 states, and proclaims his favorite “subject” is recess — although his mother would tell you his math skills have skyrocketed the last couple of years.
Nathan is, in many ways, a typical 7-year-old boy. But when it comes to his educational needs, Nathan requires a little more support than his district-assigned public school can provide. Thankfully, Nathan’s parents have been able to make educational choices to meet his needs.
Two years ago, Nathan began using an education savings account (ESA). In 2011, Arizona became the first state to provide ESAs, which function similar to a health savings account.
Just as health savings accounts enable account holders to pay for doctor visits and medication, an education savings account enables parents to pay for private school tuition, online learning, curriculum, textbooks and other education-related expenses.
With their savings account, Nathan’s parents, Michael and Amanda, are able to use 90 percent of the state funds that would have been spent on Nathan at his public school and instead direct those dollars to customized learning options that best meet his needs.
“Two years ago, we weren’t even sure if we were ever going to have a conversation with him,” says Nathan’s father. “The only reason this is possible is because we could find programs that meet his needs with ESA funds.”
Arizona’s Education Savings Accounts offer a path forward for states seeking more robust education choice options that allow for complete customization of a child’s educational experience. Signed into law in 2011 by Gov. Jan Brewer as the Empowerment Scholarship Program, Arizona’s ESAs are currently available to children with special needs, children from active-duty military families, children in foster care, and children in underperforming schools.
ESAs are the first of their kind, giving parents full control over 90 percent of the funds that would have been spent on their child in their assigned public school. Once a parent chooses to withdraw their child from the public system, funds are deposited onto a restricted-use debit card, and parents are then able to direct spending to any education-related service or provider of choice.
Families can use their ESAs to pay for private school tuition, online learning and private tutoring. Another unique aspect of ESAs is that parents are able to “roll over” unused funds from year to year, and can even roll those funds into a college savings account.
Early data from Arizona shows that not only are parents considering opportunity costs — whether they’re getting good value for their education spending — they’re also seizing the opportunity to tailor their child’s educational experience.
A recent evaluation from the Friedman Foundation for Educational Choice found that more than one-third of families are using their ESAs to create a customized education for their children. While most families use their ESAs like a school voucher to attend a single private institution that they have chosen, approximately 34 percent use their ESAs to finance multiple education options in a given day.
And during the first quarter of the 2012-13 school year, parents rolled-over 26 percent of their ESA funds, likely in anticipation of future education expenses or college tuition.
ESAs move beyond the worthwhile goal of choice among schools to choice among education service providers, courses, teachers, and methods — not limited to one brick-and-mortar location.
Arizona is setting the bar for states looking to create a robust choice environment. States would be wise to follow Arizona’s lead and enact education savings accounts for all children.
In states where a new, freestanding ESA program is not an option, states could consider establishing public school education savings accounts (for traditional school classes, public charter school offerings, public virtual schools such as the Florida Virtual School, community colleges, or state universities).
“I think that for kiddos like Nathan, it really shows the difference the right education environment can make,” says Nathan’s mother, Amanda. “He is really thriving in a small class with teachers that understand his learning disability, thanks to the ESA.”
That level of customization can be made available to all students when policymakers think in terms of funding students, not school buildings, and allowing that funding to follow a child to any education service or provider of choice.
As the new school year gets underway, Arizona is showing states across the country it is possible to create choice environments that fully meet the needs of families.
Lindsey M. Burke is the Will Skillman Fellow in Education and Brittany Corona is a research assistant in domestic policy studies at the Heritage Foundation. David Brooks’ column will return soon.
