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Arizona – Empowerment Scholarship Accounts

Arizona was the first state to enact an education savings account program, the newest school choice mechanism. The passage and launch of the Empowerment Scholarship Accounts program in 2011 opened the door to new learning opportunities for students with special needs and circumstances, and the expansion in 2017 will eventually make the program open to nearly all of Arizona’s K–12 students. Learn more about how the program works on this page, including eligibility, funding, regulations and more.

Program Fast Facts

  • America’s first education savings accounts program

  • 3,543 participating students (2016–17)

  • 22 percent of students eligible statewide

  • 134 participating schools (2014–15)

  • Average account value: $11,492 (2016–17 projected)

  • Value as a percentage of public school per-student spending: 153 percent

     

Program Details

Arizona’s Empowerment Scholarship Accounts Participation

Students Participating
School Year Ending

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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.

Student Funding

Students in households earning up to 250 percent of poverty ($60,750 for a family of four in 2016–17) will have ESAs funded at 100 percent of the base for whichever school type the student previously attended (charter or district). For all other students, ESAs are funded at 90 percent of the same per-student base funding. ESAs are currently worth about $5,600 for students who do not have special needs. Students with special needs receive additional funding, and those amounts vary depending on the services the student’s disability requires.

Student Eligibility

Students must have previously attended public school for at least 100 days of the prior fiscal year and met one of the following characteristics: (1) received a scholarship from an STO under Lexie’s Law, (2) attended a “D” or “F” letter-grade school or school district, (3) been adopted from the state’s foster care system, (4) is already an ESA recipient or (5) the child lives on a Native American reservation. Students eligible to attend kindergarten are also eligible provided they meet one of the above criteria. Additionally, children of active-duty military members stationed in Arizona, children whose parents were killed in the line of duty and siblings of current or previous ESA recipients are also eligible. Children of active-duty members of the military or whose parents were killed in the line of duty are not required to attend a public school prior to applying for an ESA. Finally, preschool children with special needs are also eligible and are not required to have attend a public preschool program prior to applying. Beginning in 2017–18, all kindergarteners, and, if they meet the 100-day requirement, all first-graders, sixth-graders and ninth-graders are eligible. In 2018–19, those students and, if they meet the 100-day requirement, all students in grades two, seven and 10 are eligible. Beginning in 2019–20, those students and, if they meet the 100-day requirement, all students in grades three, eight and 11 are eligible. In 2020–21, all K–12 students are eligible, provided they meet the 100-day requirement. New accounts are capped at 0.5 percent of the previous year’s total number of public and charter school students. Beginning in 2022–23, the cap will be fixed at the number of accounts approved in 2021–22.

EdChoice Expert Feedback

Arizona’s ESA program is relatively strong on its funding power, as 90 percent of the charter or district school per student base funding amount is deposited in each participant’s ESA, and 100 percent is deposited for low-income students. Arizona’s ESA program also excels in that it is not over-regulated. ESA-using parents must sign an agreement to provide an education including reading and grammar, math, social studies and science, and participating private schools or service providers must not discriminate.  Students must take one of several nationally norm-referenced tests or the state standardized test, but the state does not mandate a particular test, which will encourage private school participation. Arizona’s ESA is available to all students entering kindergarten, and it is very positive that within a relatively short timeframe, by the 2020–21 school year, all children will be eligible. However, the requirement for most students to first be enrolled in a public school for 100 days of the prior school year sets an arbitrary limit that may inhibit a parent’s choice of education for at least one school year, and the program still includes an arbitrary cap of 0.5 percent of traditional public and charter school enrollment, meaning that only about 9,000 students will be able to receive ESAs during the 2017–18 academic year.

Rules and Regulations

  • Income Limit: None
  • Prior Year Public School Requirement: Yes
  • Geographic Limit: Statewide
  • Enrollment Cap: Yes (0.5 percent of last year’s total traditional public and public charter school students)
  • Account Cap: 100 percent or 90 percent charter or district funding
  • Testing Mandates: State or National. ESA students without disabilities in grades 3–12 who are enrolled full-time at a qualifying school must take one of the following tests each year: any nationally norm-referenced test, the state assessment, an AP exam that assesses math and reading or any college placement exam that assesses math and reading. The outcomes of that testing must be made available to parents; aggregate results for all students shall be made available to the public upon request by schools that administer one of the applicable tests and enroll at least 50 students who are using an ESA.
  • Limited to students with special needs, students in low-performing schools, children of active military members stationed in Arizona or those killed in the line of duty, students in foster care, siblings of current or previous ESA recipients, students eligible to enroll in a program for preschool children with disabilities and children living on a Native American reservation

Parent Requirements

Parent must sign an agreement to:

  • Provide an education in the subjects of reading, grammar, mathematics, social studies and science
  • Not enroll the student in a school district or charter school
  • Release the school district from all obligations to educate the student
  • Not accept a scholarship under any of Arizona’s tax-credit scholarship programs Use the money deposited in the ESA for purposes specified in the law and spend accumulated ESA dollars on basic education subjects

Governing Statutes

Ariz. Rev. Stat. §§ 15-2401 through 2404

Legal History

On March 21, 2014, the Arizona Supreme Court declined to review a Court of Appeals’ ruling upholding the state’s education savings accounts (ESA) program. The high court’s decision essentially deemed the ESAs constitutional. Niehaus v. Huppenthal, 310 P.3d 983 (Ariz. App. 2013).

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