November 28, 2012

Education Saving Accounts: What Are They?

On Sunday, the Columbia Daily Tribune published an op-ed I penned and I would like to expand here on one of the ideas I discussed in the piece: Education Savings Accounts (ESAs)

Much like a health savings account, an ESA would be a savings account used solely for education purposes. The state would deposit money into these accounts; families would then be the owners of these accounts and could use the money to purchase school supplies, tutoring services, or even private school tuition. Money not spent could be saved for later use, including college tuition. Writing for the Friedman Foundation, Matthew Ladner calls ESAs the way of the future and a “critical refinement” of Milton Friedman’s idea of the school voucher.

In 2011, Arizona became the first state to pass ESAs into law and the accounts seem to be growing in popularity. Initially, Arizona’s ESAs were available for students with special needs, but a 2012 expansion of the program will allow students in failing schools, students adopted from the state’s foster care system, and children of active-duty military families to take part in the program. Goldwater Institute Education Director Jonathan Butcher writes, “Now, nearly one out of every five Arizona public school students — more than 200,000 children . . . are eligible for an account. . . . The accounts are a model for what education in the 21st century should look like: flexible, innovative, and child-centered.”

Missouri school districts spent an average of $9,619 per student in 2011. The state’s share of this is approximately $2,800. In lieu of sending that money to school districts, families with eligible students could receive an ESA worth $2,000 for educational expenses. This would give families more options while saving the state and local school districts money. In the next legislative session, Missouri policymakers should seriously consider ESAs in any discussion of school funding.

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