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Education Savings Accounts Bill Moving Forward
Education savings accounts (ESAs) bills are spreading like wildfire across the country, with ten states, including Alabama, currently considering adding ESAs to their school choice platter.
ESAs allow parents to custom-design their child’s education, using state education funding for education-related expenses for their child.
Rep. Ken Johnson’s (R-Moulton) bill allows eligibility only for students with disabilities and a current Individualized Education Program (IEP). More than 80,000 students have IEPs in Alabama.
Education groups protested Johnson’s initial proposal, which would have made children in foster care, military families, children with Section 504 plans, and the siblings of students with disabilities eligible.
The bill allows for 1,000 new ESAs each year, with 90% of state per pupil funding, or around $4,700 for next school year, deposited into each child’s ESA.
Source: Foundation for Excellence in Education, received April 1, 2016.
Parents can use ESA funds to pay for tuition and fees at a participating school, textbooks, instructional materials, payments to a tutor, educational services, and fees for advanced placement and other assessments.
And if money is leftover at the end of the school year, up to $2,000 can be moved to a Coverdell college savings account.
As the bill is currently written, students can become eligible for an ESA after attending a school “during the prior school year”, leaving open the question of how long a student had to have attended a public school to become eligible. Education groups are wary of the vague attendance requirement and asked for a clearer definition, but didn’t get one.
Five states have established ESAs, and Virginia recently became the sixth, though their governor has not yet signed the bill into law.
Arizona was first, in 2011. Since that time, Florida, Nevada, Tennessee, and Mississippi have established ESAs. Eligibility differs, though all states allow eligibility for students with disabilities.
School choice advocacy groups including the Foundation for Excellence in Education and the American Federation for Children are backing the bill and both have worked with lawmakers to get the bill this far.
Is $4,700 Enough to Educate a Child with Special Needs for a Year?
The amount proposed in the Alabama bill is the lowest dollar amount by far of any existing ESA programs in the country, according to the Friedman Foundation for Educational Choice web site.
Even Mississippi provides $6,500 per school year to educate students with disabilities.
Whether $4,700 will provide much in the way of instruction and services for students with disabilities is unclear.
Private schools exclusively serving students with disabilities in Alabama is typically between $6,000 and $13,000 each year.
A Harvard report, published in 2014, said the cost of school-related education services for a child with autism was $8,610 per school year. And that only includes education-related services, not health-related services.
According to data provided by the Alabama State Department of Education, schools in Alabama reported spending more than $673 million on instruction and services (including $47 million on transportation) for students with special needs in FY14. That averages out to more than $8,200 per student in special education, though actual spending differs greatly per district. And those are only costs related to special education instruction and services delivered to children with special needs, which school districts report under different accounting codes. Those costs do not include costs for students with special needs to participate in general education.
Initial discussion among House committee members focused on ESAs being a way to save costs, with a number of legislators acknowledging that schools just don’t have the resources to properly educate some children with special needs.
Further, committee members acknowledged that $4,700 may not fully cover the cost of tuition in private school, but that it would help a parent cover the cost by providing a portion of that tuition.
While very few private schools in Alabama exclusively serve students with disabilities, those private schools not specifically serving students with disabilities are under no obligation to accept students with disabilities.
The National Center for Education Statistics reported that 98% of public schools enrolled at least one student with an IEP, while 64% of private schools enrolled at least one student with a formally identified disability. Methods for identifying disabilities are not standardized across private schools, though, and this statistic should be viewed with caution. It does, however, suggest that private schools serve fewer students with disabilities.
Parents can also use ESAs to fund homeschool costs. No figures exist of the number of students in Alabama who are homeschooled. Nationally, 3.4% of students are homeschooled which, backing into the math, could mean there are nearly 29,000 students being homeschooled in Alabama*.
The ‘Camel’s Nose’
Eligibility tends to expand year after year in states with ESAs, after initially targeting children with special needs. An article in Education Week looked at that approach to introducing ESAs into states:
“Talk about pulling on the heartstrings, how can you say no to these people?” said Kevin Welner, the director of the National Education Policy Center and an education policy professor at the University of Colorado Boulder. For skeptics of vouchers and other forms of choice, such as Mr. Welner, targeting ESA programs to students with special needs is a savvy way to get a bill passed, and from there, proponents can slowly expand the program to include broader swaths of the student population. “It’s the camel’s nose under the tent,” he said.
Arizona’s ESAs, called Empowerment Scholarship Accounts, initially only allowed eligibility for students with special needs. Each year since original passage, Arizona’s lawmakers expanded eligibility, which now includes military families, foster children who have been adopted, native American children, children who are zoned to a school graded “D” or “F”, and siblings of eligible students.
Enrollment in Arizona has grown from 115 students in 2011 to 2,406 in 2015. Of those children, 1,395 have special needs. The average funding for ESAs for students with special needs was between $13,000 and $15,000 per student according to data from their department of education.
Arizona lawmakers are currently considering a bill to open eligibility to all students eligible for free or reduced-price meals, which is more than half of all students in Arizona.
The Friedman Foundation recently published a look at how parents of the 2,406 students with Arizona’s ESAs are using their funding and found that 83% of ESA funds were used to pay for private school tuition, while 28% of account holders spent funds on multiple educational products and services. Compared with a previous study, spending on tutoring is up, from 4.2% in 2013 to 7.1% in 2015, while spending on educational therapy is down, from 7.1% in 2013 to 5.3% in 2015.
Nevada’s lawmakers established ESAs in 2015 with no caps and no eligibility requirements other than to be a current public school student. The program is on hold, awaiting outcomes of multiple lawsuits.
While Florida’s ESA program was established in 2014, they have had scholarship programs for students with special needs since 1999, allowing providers who offer services to students with special needs outside of the regular school program an opportunity to grow for more than 15 years. More than 30,000 students with special needs participate in the McKay Scholarship program in Florida, and an additional 4,000 use ESAs.
Mississippi’s ESA program was created in 2015 as a pilot for 500 families, and filled only half of those slots this year. Lawmakers there continue to try to expand Mississippi’s program this year.
Tennessee’s program won’t begin until 2017 and currently is limited to children with certain disabilities, including those on the autism spectrum.
The following graphic is from the Friedman Foundation’s web site, offering a glimpse at the current ESA programs around the country.
Is an ESA the Same Thing as a Voucher?
Technically, no. This article from Education Week explains the difference, but pin-pointing the difference really boils down to how a school choice program is structured.
Traditional voucher program send money directly from public school coffers to a private school. In states where that is expressly prohibited, as in Alabama, as long as money flows first to the parent, and parents pick which schools and services the money goes to, not the state government, it is not considered a voucher and is therefore legal.
Parents Want Options
Whether the amount deposited into an ESA is enough to cover the cost of educating a child with special needs outside of the public school environment is not an issue for some parents.
One parent, testifying at the public hearing on the bill in February, said she needed an option for her child, as she was tired of arguing with her child’s school personnel over what type of services the school should be providing.
Parents often find themselves on the opposite side of the table in arguments with school officials over appropriate special education services for their children. Disputes have become such a problem that the Alabama State Department of Education is attempting to change the rules about how parents file complaints about special education.
At public hearings on the proposed changes last fall, parents and educators spoke of the extreme difficulties they have working with each other to resolve disagreements. Parents shared how relationships with educators broke down after having to hire an attorney to force public school officials to provide appropriate services for their children.
This video, from Delaware, presents the concise argument heard from parents who believe their children with special needs are not being served appropriately in public schools. Delaware’s legislature is currently considering an ESA bill.
Achievement data from Alabama’s public schools shows that students with disabilities are not performing well on assessments, including the National Assessment of Educational Progress (NAEP).
This video, “How Education Savings Accounts Are Empowering Families, from The Heritage Foundation, a conservative think-tank which embraces school choice, embodies the argument for establishing ESAs. Here’s another pro-ESA video, from The Daily Signal, the information arm of The Heritage Foundation.
The tradeoff for parents using ESAs is that they give up all rights for their child afforded under the Individuals with Disabilities in Education Act (IDEA), the federal law ensuring students with disabilities receive a “free appropriate public education” (FAPE).
The National Center for Learning Disabilities (NCLD) opposes voucher programs because of that tradeoff and because “using vouchers lowers academic expectations for students with disabilities” because there are few demands for academic accountability and students may not be taught using the same standards their non-disabled peers are taught.
More on How ESAs Would Work in Alabama
Separate organizations will be set up to administer ESAs, and they will be paid an administrative fee. Those organizations will be required to have federal nonprofit status, similar to the organizations administering tax credit scholarships set up through the Alabama Accountability Act (AAA).
Schools hoping to enroll students using ESA funding would have to become a participating school in order to do so, which is also a requirement for schools participating in the AAA program.
Parents who want an ESA for their child must sign an agreement stating they will not enroll their child in a public charter school or traditional public school, will not use a tax credit scholarship, and will make sure the child’s education includes “at least the subjects of reading, grammar, mathematics, social studies, and science”.
Opponents worry that there is too little accountability for students’ academic progress, even though the current version does require students using ESAs to be tested annually and for those results to be submitted to the Department of Revenue (the state agency charged with implementing regulations for ESAs).
Those test results and graduation rates must be reported to the public after the third year ESAs are implemented.
Some committee members expressed concern as to whether this means that the state could somehow regulate private and homeschool programs.
However, the bill re-affirms Alabama’s lawmakers’ commitment not to regulate private schools and homeschool programs.
Johnson’s bill is expected to be first up on the House calendar when lawmakers return on Tuesday.
Further Reading
Can School Choice Help Students with Special Needs?, Friedman Foundation for Educational Choice
Families in limbo after court puts education savings account program on hold, Las Vegas Sun, January 2016
Vouchers may be ticket out of public schools for kids with disabilities—but is that a good thing?, The Hechinger Report, Mississippi bureau, January 2015
States Considering Next Generation of School Choice Policies, Foundation for Excellence in Education, February 2016
2008 Report on the Achievement Results Connected to the McKay Scholarship Program in Florida
Here’s the Friedman Foundation’s video explaining ESAs. The details of each state’s law may be a bit different, but the big picture is the same.
*That number (28,900) was calculated by assuming that the 735,000 students in Alabama’s schools represent 85.6% of the total schooling population, with 11% attending private school and 3.4% attending a homeschool. The calculation looks like this:
Total Alabama schooling population: 848,700 (735,000/.866)
Public schooling population (86.6%): 735,000
Private schooling population (10%): 84,900
Homeschooling population (3.4%): 28,900
The U.S. Census American FactFinder’s 2014 estimates approximate the same numbers, if you assume that those not enrolled in public or private school between the ages of 5 and 17 are enrolled in a homeschool.
Check out the U.S. Department of Education’s Office of Non-Public Schools page for more statistical details.
