What is an education savings account?
An Education Savings Account (ESA) is an innovative option that allows families to customize a unique academic experience for their equally unique child. With an ESA, parents are able to direct a portion of their child’s existing per-pupil funding to the schools, courses, programs, and services of their choice.
How can ESAs be used?
ESAs are the education version of health savings accounts that more than 20 million Americans use. Like HSAs, ESAs can be used for pre-approved purposes, including private school tuition, tutoring, books, and online courses. A portion of the funds can also roll over and be used for that child’s college education.
Where does the money come from?
Between state and local government education funding, we already spend more than $10,000 per child each year. With ESAs, around 75% of this funding would be deposited into a parent’s ESA account to be used for those specific, limited education purposes. The remaining 25% of funding would remain with the public school district the child was originally zoned to attend.
What is the track record of ESAs or other parental choice programs?
The overwhelming majority of studies show that giving parents options when it comes to their child’s education improves the educational attainment of that child. Because choice allows the parent to customize their child’s education to fit his or her unique needs, studies show that those who exercise this choice thrive.
But what about the children who remain in public schools?
Research overwhelmingly shows that ESAs and other types of choice not only improve the academic outcomes of those children exercising choice, they also improve the performance of children who remain in their zoned public school, lead to smaller class sizes, and increase per-pupil funding for public schools. Thus parental choice represents a rising tide that lifts all boats.
What else should I know about ESAs?
Beacon recently looked at what the improved academic outcomes would mean for our local economy. A robust ESA program could lead to as many as 13,480 more high school graduates over the next 20 years, which would translate into a $2.9 billion economic impact. Personal income due to higher educational attainment could rise by $683 million over that time frame. And reduced crime rates could save taxpayers $685 million in lower incarceration rates as a result of expanding access to quality education in our state via ESAs. So not only do ESAs have a positive educational impact, they have tremendous potential to grow our economy as well.