School Vouchers Explained

This post was originally published here.

Empowerment Scholarship Accounts, also known as school vouchers, were originally created in 2011 to allow students with disabilities to access services and therapies to best meet their educational and developmental needs outside of the public school system.

Since then, they have been expanded to include students attending D and F schools, military families, students who live on Native American reservations, wards of the court and others.

In this Education Explainer, we take a look at Empowerment Scholarship Accounts, also known as school vouchers. This Education Explainer is being shared in response to the lack of information available on school vouchers.

It should be noted that Education Forward Arizona stands opposed to the mass expansion of school vouchers (you can read more on this in our recent op-ed).

What is a school voucher?

School vouchers are another method of school choice in Arizona. They allow eligible families to use taxpayer dollars to fund their child’s education outside of the traditional public school system, often via private schools and also via other education providers or vendors.

When parents agree to use a school voucher, they agree that they will be responsible for their child’s education and their child will not attend a public school. In return, the family receives a school voucher with state funding and enters into a contract with the Arizona Department of Education (ADE).

Who currently uses school vouchers (before the expansion)?

As of April 2022, 11,775 students actively used a school voucher. The majority (more than 7,000) are families that have students with special needs. Only 447 of those are students from D and F schools. (Source: Arizona Department of Education, ESA Quarter 3 report)

What does the new law passed this year mean for school vouchers? Who is eligible to participate?

The law passed by legislators and signed by Governor Ducey in summer 2022 will expand voucher eligibility to all students in Arizona. This includes the existing 1.1 million students in traditional public and charter schools. Additionally, the expansion also includes students who currently attend private school (about 50,000 students) and those who are homeschooled (about 35,000 students).

How many students have signed up for a school voucher to date?

Applications opened under the universal voucher program on Aug. 16, 2022. As of Sept. 5, ADE reported they received 8,193 voucher applications, 96% of those were made under the voucher expansion.

ADE estimates that approximately 75% of the universal applicants had not been public school students before.

How much funding do families receive with a school voucher?

School vouchers give recipients 90% of the amount of state funding that would have been given to a public or charter school—regardless of what type of school was attended.

For most students, this is about $7,000. However, the amount may vary for students with disabilities and can be upwards of $30,000.

ADE reports that the average school voucher is $15,225.39, while most vouchers (53%) are in the $6,000-7,000 range. About 16% received vouchers of $20,000-29,000 and 20% received a voucher worth more than $30,000. (Source: Arizona Department of Education, ESA Quarter 3 report)

The variation in costs is largely due to meeting the needs of students with disabilities, who are the current primary users of school vouchers.

How can voucher funding be spent?

A voucher can be used to pay for private school attendance, to support homeschooling, for therapies or for other educational services.

The ESA Parent Handbook cites that voucher funding can be spent on tuition and fees, books, tutoring, curriculum, educational materials, testing fees, tuition and fees at a postsecondary institution (a community college or university), dual enrollment, uniforms, extracurricular programs or individual classes at a public school, approved therapies and more.

In addition, extracurricular activities with appropriate credentials are also allowed (e.g. horseback riding lessons, cooking classes, woodworking, personal finance, etc.). They can also be used on sports and educational camps, tickets for zoos/science/art centers, and gyms or facility memberships.

Supplemental materials are also allowed if required by a curriculum or course of study, including things like gardens, gym equipment, art supplies, instruments and kitchen equipment. (Source: Arizona Department of Education, ESA Parent Handbook)

Any unspent funding rolls over to the next year.

Where does the funding come from for vouchers?

In Arizona, school funding follows the student.

Schools are funded based on student attendance and receive a specific amount of funding per student. If a student chooses to use a school voucher, that taxpayer funding is allocated to the student’s family to procure their own education outside of the public school system.

If the student using a voucher went to a public school previously, then the school would no longer receive that funding because the student no longer goes to that school.

If the student never went to a public school, the funds come out of education funding in the state’s general fund.

How do families use the school voucher funding?

ADE administers the program and uses a system called ClassWallet to manage payments.

Parents can use ClassWallet to get a prepaid debit card, request reimbursement or to make direct payments to the school or vendor. Receipts and invoices are required to be submitted (for debit cards they must be submitted after every 20 transactions) and no later than the end of each quarter.

When using the debit card, some limitations exist for some types of vendors. Additionally, ADE has a list of unapproved expenses that users must follow. (Source: Arizona Department of Education, ESA Parent Handbook)

Is there fiscal accountability included?

As described in this Explainer, there are some safeguards regarding what expenses are allowable using the ClassWallet system. However, these are minimal and are on the back end after expenses have been incurred in many cases. The responsibility lies on the parent or family member using the voucher funds to ensure they are allowable, with ADE verifying expenses.

While this is in place, it is far less fiscal accountability than a traditional public or charter school would have as they use public funds.

For example, there’s no public reporting of how the taxpayer dollars are spent, including a review by the Auditor General, fiscal audit, budget review by the public or governing board, or other mechanisms required for private schools or vendors to use public funds. This matters because at scale, vouchers could total hundreds of millions of dollars (or more) with little fiscal accountability.

Do school vouchers have any academic accountability included?

No.

Neither the existing law nor the law passed this summer to expand voucher eligibility include academic accountability.

Students do not have to take the state assessment, a national assessment (like the ACT or SAT), show student outcomes, such as grades, or whether their students graduate from high school or go to college.

Private schools, or other education providers who have students using vouchers, do not have to report data back to the state and do not participate in the state’s accountability system.

Further, there are no qualifications required for teachers in private schools or via other providers. There’s also no public process to evaluate or provide input into the curriculum used, which depending on the school or education provider may limit access that parents have in a public school. 

Will the expansion of school vouchers take funding from the public education system?

Yes.

There’s one pot of funding for education in the state (the state’s general fund). When vouchers are used, state funding that would normally be for public schools is redirected to private schools or other providers.

The more vouchers that are used, the more money will leave the public education system.

Families using a voucher receive 90% of the normal school funding amount that would have gone to a charter school, regardless of what type of school a student previously attended. It is about $7,000 a year. The remaining 10% of funding is never generated, meaning it never goes to the public school. It remains in the state’s general fund.

As families choose vouchers, schools lose that funding, but they still have the same fixed expenses for their school buildings, electricity, teachers and school staff, to name a few. This causes school resources to be stretched even further, exacerbating the funding issues they already are experiencing.

What’s the potential total funding impact as vouchers expand?

The financial impact will depend on the number of students who use a voucher. The cost could potentially be hundreds of millions of dollars, if not more.

Do traditional public or charter schools gain money if their students choose to use a voucher?

No.

When students leave a public school or charter school, the money leaves those public schools. Additionally, any other state or federal funding that is generated per pupil will also be reduced.  

Will the voucher expansion help the students who need it the most?

This is unclear because there is a lack of data available on the students who are using school vouchers and there were no requirements for reporting back information about how students are doing once they receive a voucher.

What else do students and families need to use a voucher?

Using a voucher requires having the financial means, ability to navigate the system, transportation to a private school or other provider, the ability to home school and access.

For those choosing to go to private school, they have to be able to pay the full tuition and fees, plus tuition, books and other expenses. A voucher usually provides about $7K to a student, whereas the average private elementary school tuition is $9,818 and the average high school tuition is $15,506 (Source: Private School Review)

Families also need the ability to navigate the system, to meet the requirements of the ESA program and then to evaluate what private school, therapies or other education providers would best meet their child’s needs.

Students also have to have transportation to the campus or other education provider. Those who choose to homeschool must have someone who can provide that homeschool instruction.

For students in a rural, remote or in many urban locations, there are no private school options, which may limit their ability to use a voucher for private school or to find providers.

The post School Vouchers Explained appeared first on Education Forward Arizona.