In Arizona, the Typical ESA Recipient Already Attends Private School, Study Finds
Rand researchers say the data suggests that universal programs could do a better job of reaching the neediest students.
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Most families participating in Arizona鈥檚 fast-growing private school choice program were already charting their own educational path outside of public schools without the government鈥檚 help, a recent study found.
As of this past April, nearly three-fourths of the more than 64,000 students eligible for the state鈥檚 universal education savings accounts were homeschooled or enrolled in a private school before they participated in the program, researchers from the Rand Corp. found.
ESA students are also more likely to live in districts with higher median incomes, more white families and schools with better test scores.
鈥淚f the goal is to have tax dollars follow students, then a universal policy can achieve that,鈥 said Susha Roy, lead author of the report. But if the goal is to reach the neediest students or those in failing schools, she added, 鈥渨hat we鈥檙e seeing in Arizona suggests that a universal policy is not the best way to expand access.鈥
To skeptics of ESAs, who see them as handouts to wealthier families, the findings provide further evidence that conservatives鈥 preferred school reform policy often leaves lower-income families behind. But supporters predict that use will spread over time to those with greater needs. In Arizona, for example, 57% of students who enrolled in the ESA program over the past year attended a public school just prior to switching 鈥 up from 21% in 2023, state data shows. In Indiana, over half of ESA students live in families earning $100,000 annually or less. Advocates working to promote school choice in lower-income communities say Rand鈥檚 findings just mean there鈥檚 more work to do.
鈥淲e’ve seen the national studies and we’re not dissuaded at all,鈥 said Ryan Hanning, a fellow with the San Juan Diego Institute, a Phoenix-based organization that supports faith-based and nonprofit groups. 鈥淗ow do we make sure that ESA is fully adopted by marginalized communities, specifically Spanish-speaking and Black communities?鈥
Application windows too early
One consistent argument against ESAs is that the dollar amount doesn鈥檛 cover the costs at many private schools. of parents who didn鈥檛 use their ESA showed that nearly 20% said the funding wasn鈥檛 enough to afford tuition at their preferred school. Another 20% of parents were concerned that even if they could pay the tuition, they would struggle to afford additional fees, and almost 10% said lack of transportation would be a barrier.
Stephanie Parra, executive director of All in Education, an education advocacy group focused on Latino families, sees the same challenges in Arizona, which she called 鈥渢he most choice-rich school environment in the country.鈥
鈥淓ighty-five percent of our families are choosing their neighborhood public schools,鈥 she said. 鈥淚t is really a choice rooted in logistics and what is accessible to them.鈥
Proponents of private school choice say one solution is to build up the supply of schools, like those in the rapidly expanding microschool sector.
The San Juan Diego Institute promotes school choice to underserved communities, but has also provided start-up funds for new private schools where tuition costs no more than the amount of the ESA, generally in the $7,000 to $8,000 range. They include Hands2Teach in Peoria, which serves deaf and hearing students and teaches American Sign Language, and Vita High School, a Montessori-style program in Phoenix where students learn A.I. skills.
鈥淎wareness is the biggest barrier. Many families don鈥檛 know ESAs exist, and early materials weren鈥檛 in Spanish, limiting accessibility,鈥 said Andrew Lee, Vita鈥檚 founder and CEO. 鈥淒ocumentation requirements, such as proof of residency, can also create obstacles.鈥
The school provides scholarships to cover additional costs like transportation and school supplies.
The Indiana-based Drexel Fund has a similar mission and has helped launch new, mostly faith-based schools in multiple states that primarily serve students who qualify for free- or reduced-price lunch or have disabilities.
Microschools are more approachable to parents who have no experience with private schools, said Naomi DeVeaux, a partner with Drexel. Another way to open up ESAs to lower-income families, she said, is to allow parents to apply as late as a month before school starts, or to add late application windows.
鈥淚n some states, the window to apply for your voucher is too early. Families that are mobile or who just aren’t thinking ahead to the next school year will miss it,鈥 she said. 鈥淭hat’s a big thing that states really could improve upon.鈥
The growth of super small schools has expanded access to private education, said Douglas Harris, an economics professor at Tulane University. He published research earlier this year showing that voucher-like programs have led to a 3% to 4% increase in private school enrollment. Most schools that receive ESA funds enroll about 30 students.
But he warned that more schools doesn鈥檛 always mean better student performance. In fact, with microschools, there鈥檚 no way to tell, according to another recent Rand study. Researchers concluded that there is insufficient data to determine how students who attend microschools compare academically to their peers in traditional public schools.
鈥楢 case study鈥
Rand鈥檚 latest findings, said lead researcher Roy, have implications not just for states with existing ESA programs, but for those considering whether to opt in to a new federal tax credit scholarship program included in President Donald Trump鈥檚 tax cut and spending package.
The Treasury Department and the IRS are now collecting public comments in advance of issuing regulations for the program next year. It鈥檚 unclear whether governors will have a say in how the programs operate or whom they serve.
鈥淚t’s our hope that we can use Arizona as a case study for other states that are now potentially considering ESA programs because of the federal policy,鈥 she said.
The potential to open more educational options for underserved students has captured the support of some Democrats, a departure from how the party typically views vouchers and ESAs. Arne Duncan, education secretary during the Obama administration, and Democrats for Education Reform CEO Jorge Elorza urge states to participate.
鈥淔or both current and incoming governors, it鈥檚 a chance to show voters that they鈥檙e willing to do what it takes to deliver for students and families, no matter where the ideas originate,鈥 they wrote in The Washington Post.
There are key differences between ESAs and the new federal program, which won鈥檛 start until 2027. ESAs, like most voucher programs, are state funded. Taxpayers will fund the federal Educational Choice for Children Act by donating up to $1,700 annually to a nonprofit scholarship-granting organization in their state. In exchange, they鈥檒l get a dollar-for-dollar credit on their taxes.
The size of the scholarships will depend on how much those groups can raise. Families earning three times their area鈥檚 median gross income will be eligible for funding, meaning that those making as much as $500,000 in some parts of the country will be able to participate.
Critics argue that the tax credit is still expected to cost the government at least $10 billion annually and will increase over time. Additionally, if higher-income families end up benefitting more from the new program, that would 鈥渢otally run contrary to the way that we have understood the federal role in education to be for decades,鈥 said Jon Valant, director of the Brown Center on Education Policy at the Brookings Institution, a center-left think tank.
He added that there鈥檚 no guarantee that private and religious schools would offer the same civil rights protections for LGBTQ students or those with disabilities as public schools.
鈥淲hat are we losing when we move away from what has been our universal public education system?鈥 he asked. 鈥淲ho could really slip through the cracks?鈥
Talking about college
In a September paper, he pointed to North Carolina as an example of a state that is ensuring lower-income families get first crack at school choice dollars. The state gives its highest Opportunity Scholarship payment of $7,686 to the lowest-income families and gradually reduces the amount for families who earn more.
Until the state made its program universally available in 2023, 鈥減rivate school was never an option for us,鈥 said Tabitha Lofton, whose two younger sons attend Amandla Academy, a microschool with locations in Greensboro and High Point.
She moved Jamaal and Jackson out of Dudley High School in the Guilford County district, where they often skipped class and struggled to keep up. As a welder who often travels for work, and had to stretch her income to pay the bills, Lofton felt she couldn鈥檛 devote enough time to her kids鈥 education.
All Jamaal wanted to do was play basketball 鈥 at churches, local gyms, wherever he could, Lofton said. It was that passion that caught the attention of a coach who worked for Amandla and recruited Jamaal to play. Eager to get her boys out of Dudley, she applied for the Opportunity Scholarship and soon realized that they were thriving in the smaller environment.
鈥淚 see A’s and B’s and C’s on their report cards, which is something I’ve never seen,鈥 she said. 鈥淢y children are talking about going to college. Before going to that school, that was not a conversation at all.鈥
Marcus Brandon, a former state legislator who pushed for the universal program, founded Amandla in 2022. As executive director of CarolinaCAN, part of the 50Can advocacy network, he鈥檚 well-versed in ESAs.
As in the Rand study, state data still shows that most students in North Carolina鈥檚 program were already enrolled in private schools before they received state funds, but that doesn鈥檛 deter him.
鈥淵ou still have people who were making sacrifices,鈥 Brandon said. Maybe they were working two jobs or put off buying a second car, he said. 鈥淛ust because they were [paying tuition] doesn’t mean they were doing it comfortably.鈥
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