Arizona - Empowerment Scholarship Accounts
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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. 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

  • 6,028 participating students (Fall 2018)

  • 22 percent of students eligible statewide

  • 134 participating schools (2014–15)

  • Average account value: $13,431 (2018–19 projected)

  • Value as a percentage of public school per-student spending: 177 percent

     

Program Details

Arizona’s Empowerment Scholarship Accounts Participation

Students Participating
School Year Ending

Click the + symbols to learn more about this program’s details.

Arizona was the first state to enact an education savings account, the newest type of school choice program. 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. Learn more about how the program works on this page, including eligibility, funding, regulations and more.

Student Funding

Students in households that earn up to 250 percent of poverty ($62,750 for a family of four in 2018–19) will receive 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 were worth about $5,600 for students who do not have special needs in 2016–17. Students with special needs receive additional funding, and those amounts vary depending on the services the student’s disability requires. Because nearly six in 10 ESA students have special needs, the average ESA in 2018–19 is projected to be $14,518.

ESA funds are deposited on debit cards for parents quarterly to be used for qualified educational purchases. The program currently has a cap on enrollment growth of about 5,000 additional students per year. Beginning in 2019–20, there will be no total cap on the number of accounts approved.

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 a school tuition organization (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) live 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, children of parents who are legally blind, deaf or hard of hearing, 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 attended a public preschool program prior to applying.

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. Arizona’s ESA program also excels in that it avoids unnecessary regulations and empowers families to hold education providers accountable. ESA-using parents must sign an agreement to provide an education that includes reading and grammar, math, social studies and science, and participating private schools or service providers must not discriminate.

Arizona could improve its ESA by expanding it to serve all students. Additionally, 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.

Finally, the program’s implementation has often left much to be desired. Policymakers could improve the implementation of the program—making it easier for families to use and raising the level of financial accountability—by following Florida’s lead and outsourcing the administration to third-parties that have greater expertise managing large numbers of flexible spending accounts. The relevant government agency would then provide oversight rather than attempt to administer the program directly.

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 (Special needs students receive more.)
  • Testing Mandates: None
  • 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, children of parents who are legally blind, deaf or hard of hearing, 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 Arizona Court of Appeals ruled that ESAs are neutral toward religion. Also, although a prior 2009 decision by the Arizona Supreme Court in Cain v. Horne, 202 P.3d 1178 (Ariz. 2009) (en banc) found vouchers to be unconstitutional in Arizona, the appellate court distinguished ESAs, said they did not violate the state constitution because funding can be used for a variety of educational resources in addition to private school tuition. Niehaus v. Huppenthal, 310 P.3d 983 (Ariz. App. 2013).

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