About Education Savings Accounts (ESAs)
Education savings accounts allow parents to withdraw their children from public district or charter schools and receive a deposit of public funds into government-authorized savings accounts. Those funds can cover private school tuition and fees, online learning programs, private tutoring, educational therapies, community college costs, and other higher education expenses.
For a handout explaining how ESAs work for families, how they should be funded, and key policy features of existing programs, download our printable PDF.
Education Savings Accounts (ESAs) in Operation
There are five ESA active programs in five states: Arizona, Florida, Mississippi, North Carolina and Tennessee. Nevada’s ESA program is not currently in operation as litigation continues.
Fast Facts on Education Savings Accounts (ESAs)
- Estimated ESA recipients in Arizona, Florida, Mississippi, North Carolina and Tennessee: 19,109.
- ESAs gained national prominence in 2011, when Arizona created the nation’s first such program. Florida followed suit in 2014. In 2015, Mississippi, Nevada, and Tennessee all created their own ESA programs.
- Florida has the largest ESA program in terms of participation (11,917 enrollees in Fall 2018).
- Nevada has the largest ESA program in terms of statewide eligibility (93 percent of students).
- ESAs were essentially declared constitutional by the Arizona Supreme Court in 2014, when it deemed those challenging the program were unable to show harm. The Nevada Supreme Court declared its nearly universal ESA constitutional in 2016.
About School Vouchers
Vouchers give parents a portion of the public funding set aside for their children’s education to choose private schools. State funds typically expended by a school district are allocated to families in the form of a voucher to pay partial or full tuition at a private school, including religious and non-religious options.
School Vouchers in Operation
There are 29 voucher programs in 18 states—Arkansas, Florida (2), Georgia, Indiana, Louisiana (2), Maine, Maryland, Mississippi (2), New Hampshire, North Carolina (2), Ohio (5), Oklahoma, Tennessee, Utah, Vermont, Wisconsin (4)— and Washington, D.C., and Puerto Rico.
Fast Facts on School Vouchers
- Estimated voucher recipients in 15 states and Washington, D.C.: 192,660.
- Vouchers gained national prominence in 1990, with the creation of the Milwaukee Parental Choice Program. Two voucher programs existed prior to that (Vermont: 1869, Maine: 1873).
- Indiana’s Choice Scholarship Program is the largest voucher program in terms of statewide income-based eligibility (50 percent of families with children).
- Indiana’s Choice Scholarship Program is also the nation’s largest voucher program in terms of participation (36,290 enrollees in 2018–19).
- Douglas County, Colorado, was home to the only voucher program created by a public school district. In 2017, a newly elected school board rescinded the program.
- Washington, D.C., has the only voucher program authorized by the U.S. Congress.
- Vouchers—specifically Ohio’s Cleveland Scholarship Program—were declared constitutional by the U.S. Supreme Court in 2002 (Zelman v. Simmons-Harris).
About Tax-Credit Scholarships
Tax-credit scholarships allow taxpayers to receive full or partial tax credits when they donate to nonprofits that provide private school scholarships. Eligible taxpayers can include both individuals and businesses. The amount of tax credits distributed is capped at an amount determined by the legislature, which, in turn, affects the availability and size of scholarships. In some states, scholarship-giving nonprofits also provide innovation grants to public schools and/or transportation assistance to students choosing alternative public schools.
Tax-Credit Scholarships in Operation
There are 23 tax-credit scholarship programs in 18 states—Alabama, Arizona (4), Florida (2), Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Montana, New Hampshire, Nevada, Oklahoma, Pennsylvania (2), Rhode Island, South Carolina, South Dakota and Virginia.
Fast Facts on Tax-Credit Scholarships
- Estimated tax-credit scholarship recipients in 18 states: 289,260.
- Tax-credit scholarships gained national prominence in 1997, when Arizona created the nation’s first such program (after its voucher program was declared unconstitutional).
- Florida has the largest tax-credit scholarship program in terms of participation (100,512 enrollees in Spring 2019).
- Montana’s Tax Credits for Contributions to Student Scholarship Organizations program, which is currently facing a legal challenge, is the largest tax-credit scholarship program in terms of statewide eligibility (100 percent of students).
- Tax-credit scholarships—specifically Arizona’s Corporate Tax Credits for School Tuition Organizations—were essentially declared constitutional by the U.S. Supreme Court in 2011 (Arizona Christian School Tuition Organization v. Winn). The Supreme Court dismissed the case, ruling the plaintiffs did not have standing to challenge the program.
About Individual Tax Credits
Through individual tax credits, parents can receive state income tax relief for approved educational expenses, which can include private school tuition, books, supplies, computers, tutors and transportation. Tax credits lower the total taxes a person owes.
Individual Tax Credits in Operation
There are five individual tax credit programs in five states—Alabama, Illinois, Iowa, Minnesota and South Carolina.
Fast Facts on Individual Tax Credits
- Estimated number of tax returns claiming tax credits for educational expenses in five states: 489,206.
- Tax credits for educational expenses, including private school tuition, were started in Iowa in 1987.
- Illinois has the largest tax credit program in terms of participation (297,492 tax returns in 2016).
- Illinois’ and Iowa’s tax credit programs are the nation’s largest in terms of eligibility (100 percent of taxpaying families).
- South Carolina has the most generous tax credit, which is worth the lesser of $11,000 per student or their children’s actual cost of attending school.
- Tax credits were declared constitutional in Illinois in 1999, after two lawsuits argued Illinois’s tax credit program violated the First Amendment of the U.S. Constitution and religion clauses of the Illinois Constitution. Illinois appellate courts upheld the programs and the Illinois Supreme Court refused to grant appeals (Toney v. Bower, Griffith v. Bower).
About Individual Tax Deductions
Through individual tax deductions, parents can receive state income tax relief for approved educational expenses, which can include private school tuition, books, supplies, computers, tutors and transportation. Tax deductions reduce a person’s total taxable income.
Individual Tax Deductions in Operation
There are four individual tax deduction programs in four states—Indiana, Louisiana, Minnesota and Wisconsin.
Fast Facts on Individual Tax Deductions
- Estimated number of tax returns claiming tax deductions for educational expenses in four states: 412,846.
- Tax deductions for educational expenses, including private school tuition, were started in Minnesota in 1955.
- Minnesota has the largest tax deduction program in terms of participation (212,160 tax returns in 2016).
- Minnesota has the largest tax deduction program in terms of eligibility (100 percent of taxpaying families with children).
- Wisconsin has the most generous tax deduction: up to $10,000 for high school students ($4,000 for grades K–8).
- Tax deductions were declared constitutional in 1983, when the U.S. Supreme Court ruled in favor of Minnesota’s tax deduction program (Mueller v. Allen).
EdChoice is a 501(c)(3) nonprofit and nonpartisan organization, dedicated to advancing educational freedom and choice for all as a pathway to successful lives and a stronger society.
Educate diverse audiences about school choice and its benefits.
EdChoice is a national leader in school choice research. We publish dozens of studies, surveys, legislative analyses and blog posts each year to help the public, the media and key stakeholders understand how school choice is affecting families and students across the United States and internationally. Our premise is simple: The more people know about and understand educational choice, the more they can help advance the movement.
Train supporters and policymakers to advocate for high-quality choice programs.
For too long, parents have been told to sit down, be quiet and let the professionals handle their kids. Policymakers have similarly been bullied by those who seek to protect and preserve an educational system that has chronically failed many of those who most depend on it as their pathway to a successful life. We offer a selection of trainings to help school choice supporters learn how to advocate for high-quality programs that put students first.
Engage in activities that generate results for students and families.
We know from experience that bringing new school choice programs to fruition takes a lot of hard work, and we know true educational choice faces long odds in places where allegiance to the past comes before serving students. That’s why we’re focused on engaging at the state level where it makes the most sense while supporting school choice efforts more broadly with our research, outreach and trainings.
“Fast Facts on School Choice,” EdChoice, last modified May 28, 2019, http://www.edchoice.org/our-resources/fast-facts.