It is a new year and you know what that means . . . a new legislative session. During the coming months, we will discuss many ideas that the Missouri Legislature should consider, from cutting the corporate income tax to reining in government handouts. But I write about education, so I want to share an idea that I believe is one of the most promising: education savings accounts (ESA).
Matthew Ladner, a senior fellow with the Friedman Foundation for Educational Choice and the Goldwater Institute, calls education savings accounts “The Way of the Future” — and I agree. The basic idea of an ESA is fairly simple. When families with eligible students choose to leave the public school system, the state gives some of the money it would have otherwise spent on the child in the public schools back to the family in the form of an ESA. Those funds are deposited into the ESA, which can be used for approved education purposes.
Arizona is currently the only state to have implemented ESAs and as of this month, one out of every five Arizona students is eligible for an account. Examples of eligible families include those with disabled children, military families, students in failing schools, and more.
The beauty of ESAs is that they are versatile. Families can use the money on private school tuition, textbooks, education therapy, online classes, tutoring, standardized testing, 529 college savings plans, or individual public school classes and extracurricular programs. Money in the account earns interest, like a health savings account, and if a family does not use all of the money, they can save it for future educational expenditures, including college tuition.
Later today, I will be interviewing Jonathan Butcher, education director of the Goldwater Institute, which was instrumental in helping get an ESA program established in Arizona. We will upload the video to the blog once it is ready. So stay tuned to learn more about ESAs.