Universal Education Savings Accounts (ESAs)
A universal ESA bill was signed by Governor Reynolds on January 24, 2023
What was the Problem?
It is unfair to limit non-public school opportunities to more affluent families, while those who do not have the financial means must rely on the public system.
Universal education savings accounts (ESAs) provide a free-market solution for parents seeking the best educational opportunities for their children. ESAs provide real school choice for Iowa families and promote the basic right of parents to make the best educational decisions for their own child.
Governor Kim Reynolds said, “School choice shouldn’t be limited to those who have the financial means or are lucky to live in a district that’s confident enough to allow open enrollment. So, let us make choice an option for everyone.”
School choice for all Iowa families happens when financial barriers to non-public school options are removed. It is unfair to limit non-public school opportunities to more affluent families, while those who do not have the financial means must rely on the public system. Further, a universal ESA provides a free-market incentive that makes both public and private educational offerings better by introducing alternatives and creating a smaller burden on the public system.
If a public education is to act as “the great equalizer,” it is imperative that lawmakers act to provide flexibility for parents so that all children may access the best educational opportunities for them. Eight states already have ESA policies on the books, and it is
The Solution:
1. Remove financial barriers to non-public school options.
2. Provide a free-market incentive that improves all educational offerings.
Victory! What Did Lawmakers Change?
The Students First Act, signed by Governor Reynolds on Tuesday, January 24, 2023, creates an ESA that will be funded with the state’s share of funding per pupil, which is currently $7,598. Although the ESA is universal, meaning it applies to every student in Iowa regardless of income level or current public/private enrollment, it will be phased in over three years. Here is how the phase-in is structured:
YEAR 1 (2023-24)
• All kindergarten students
• All public school students
• Private school students at or below 300% FPL ($83,250 for a family of four)
YEAR 2 (2024-25)
• All kindergarten students
• All public school students
• Private school students at or below 400% FPL ($111,000 for a family of four)
YEAR 3 (2025-26)
• All K–12 students in Iowa, regardless of income
For the past few years, Governor Reynolds and the legislature have been working to advance more school choice policies in Iowa. That work came to fruition as they have now delivered one of the most robust ESA programs in the country.