Student Funding

Education Scholarship Accounts may be used for private school tuition and fees as well as other educational services, including testing fees, special needs services and therapies, individual classes and school-sponsored extracurricular activities, and occupational therapy. Students may also use up to $750 of their ESA funds annually for transportation services.

Accounts are funded at 90 percent of what a student would receive in a public school, which is affected by a student’s school district of residence as well as special needs status. Parents may roll over up to $1,000 of unused funds in a given year plus previous years’ rollover amounts to be used in subsequent years, up to when a participating student graduates or turns 22 years old. The Indiana legislature appropriated $10 million for Education Scholarship Accounts for 2022–23.

(Last updated January 18, 2023) 

Student Eligibility

Students must come from families earning no more than 300 percent of the threshold for free and reduced-price lunch (FRL) ($154,013 for a family of four in 2022–23) and have an education plan for students with special needs. Eligible plans include an Individualized Education Program (IEP) from a public school district as well as a special needs service plan from a private school. ESA recipients are not eligible to combine funding with Indiana’s voucher, the Choice Scholarship Program. ESA recipients are eligible to combine funding with Indiana’s School Scholarship Tax Credit program, unlike Arizona’s and West Virginia’s ESA programs. Students are eligible to enroll at age five, and once enrolled in the program, students remain eligible to receive Education Scholarship Accounts until they graduate or turn 22 years old.  

(Last updated January 18, 2023) 

EdChoice Expert Feedback

Indiana’s Education Scholarship Account Program is the state’s first education savings account and has the potential to help hundreds of Hoosiers with special needs obtain the educational services that best fit their needs. However, policymakers could do more to expand educational opportunity.

Eligibility for the ESAs is limited to students with special needs from families earning up to 300 percent of the federal free-and-reduced-price lunch program (the equivalent of 555 percent of the federal poverty line). This income limitation hampers options for all Indiana students with special needs who may not be in the best educational environments.

Accounts are funded at 90 percent of what a student would be allocated at a public district school via the state’s funding formula. While this amount is relatively high compared to other school choice programs, the program’s total appropriation amount ($10 million) means the program will only be able to serve no more than 2,000 students, or less than 1 percent of Indiana’s K–12 student population.

To expand access to educational choice, Indiana policymakers should increase the ESA amounts to be in-line with the per-pupil spending at district schools and expand eligibility to all students. Additionally, while the program’s funding is set at $10 million, there is not currently the possibility for further expansion with increased demand. Indiana lawmakers should consider funding the ESA through the state’s K-12 education funding formula so that all eligible students who want to use ESAs are able to do so.

Indiana’s ESA program mandates participating students take the state test or the assessment dictated by their special education service plan. In addition to facilitating these tests, participating schools receiving ESA payments in excess of $50,000 face additional financial regulations and reporting requirements. Administration of the program is overseen by Indiana’s treasury department, which is a governmental agency best suited for administering a program like this.

(Last updated January 18, 2023) 

Rules and Regulations

• Income Limit: 300% x FRL ($147,075 for a family of four in 2021–22) 
• Prior Year Public School Requirement: None 
• Geographic Limit: Statewide  
• Enrollment Cap: None 
• Account Cap: 90% State Funding  
• Testing Mandates: State test 
• Budget Cap: $10 million (2022–23) 

Parent Requirements:

• Only use funds for qualified expenses under IC 20-51.4-2-9
• Ensure a student’s study in the subjects of reading, grammar, mathematics, social studies and science
• Ensure student takes the state test of the student’s grade level or the assessment determined by his or her IEP

(Last updated January 18, 2023) 

Governing Statutes

Ind. Code § 20-51.4

(Last updated January 18, 2023) 

Legal History

No legal challenges have been filed against this program.

(Last updated January 18, 2023)