The Friedman Foundation for Educational Choice

Advancing Milton and Rose D. Friedman's Vision of School Choice for All Children

The Education Debit Card: What Arizona Parents Purchase with Education Savings Accounts

Released: 8/28/2013

Author(s): Lindsey M. Burke

As parental choice in education takes root in more communities throughout the U.S., education savings accounts (ESAs) have taken on greater importance as the funding mechanism for customized learning. This is especially true in Arizona. The state’s version of ESAs, known as Empowerment Scholarship Accounts, has enabled families to completely tailor their children’s educational experience. It also is a “critical refinement” of economist Milton Friedman’s original vision of school choice through vouchers.

With Empowerment Scholarship Accounts, Arizona has created a model that should be every state policymaker’s goal when considering how to improve education: funding students instead of physical school buildings and allowing that funding to follow children to any education provider of choice. 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.
Arizona’s ESAs allow parents of certain students to withdraw them from their public or charter schools and have 90 percent of the funds the state would have spent on them deposited into Empowerment Scholarship Accounts. When ESAs were first enacted in 2011, the option was available only to parents of children with special needs. A year later, eligibility was extended to active-duty military families, foster children, and parents with children in public schools graded D or F under the state’s accountability system. In June 2013, the Empowerment Scholarship Accounts were expanded further to include incoming kindergarten students who meet the eligibility requirements.
To determine exactly how Arizona families are utilizing their Empowerment Scholarship Accounts, the Arizona Department of Education provided the Friedman Foundation for Educational Choice with a data set containing the expenditures of families participating in the program. This paper examines the data to determine:
  1. the types of educational options families are purchasing as a result of an ESA;
  2. whether families are using ESA funds to send their children to a single educational institution such as a private school or using Empowerment Scholarship Account dollars for a variety of education-related services;
  3. whether families take advantage of private tutoring and education therapy, allowable under ESA statute; and
  4. the extent to which families are saving Empowerment Scholarship Account funds forfuture education-related expenses or college costs, and whether it appears that the ESA option encourages families to take “opportunity costs” into consideration, pursuing the best education for the best value.
Education savings accounts provide a path forward for states wishing to design robust education choice options that allow for complete customization of a child’s pre-K-12 educational experience. ESAs facilitate the transition from financing schools to funding students, empowering parents with control over their children’s share of education funding. As such, they can and should be given strong consideration by state policymakers interested in creating a truly student-centered, choice-based education system.


Empowerment Scholarship Accounts

Enacted 2011 • Launched 2011

Arizona’s Empowerment Scholarship Accounts (ESA) program allows parents to withdraw their children from public, district, or charter schools and receive a portion of their public funding deposited into an account with defined, but multiple, uses, including private school tuition, online education, private tutoring, or future educational expenses. In the 2013-14 school year, eligibility expanded beyond the original pool of students with special needs to students assigned to public schools or school districts with a “D” or “F” letter grade, children of active-duty military members, and youth adopted from the state’s foster care system.


4/15/2014 Breaking the ice for a growing school choice plan to bloom
4/15/2014 Mississippi parents of children with special needs drive ESA legislation
4/15/2014 Two-Minute Talk with Jonathan Butcher
2/6/2014 Tulsa World | Education service accounts put parents in charge
10/15/2013 National Review | The Education Debit Card
10/1/2013 Education Week | Ariz. Scholarship Program Ruled Constitutional
9/20/2013 Savannah Morning News | Commentary: A new way to fund education
8/28/2013 Study reveals how Arizona parents use education savings accounts

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