Utah to Consider Public School Education Savings Accounts

Published October 18, 2011

Forthcoming legislation in Utah would replace state education funding with savings accounts of up to $6,000 for parents of high school students to spend among a variety of public school options including online classes, courses outside their school district, or charter schooling.

State Rep. John Dougall (R-American Fork) calls these accounts “student-focused funding” where “the money is following the child,” similar to Health Savings Accounts. He said he will propose education savings accounts (ESA) in January 2012 to replace traditional state education funding, which transfers automatically to a student’s local high school and prevents personal education choices. 

“This [proposal] is a truly visionary concept that could allow parents to design the best possible education according to the individual needs of the child,” said Matthew Ladner, a senior advisor at the Foundation for Excellence in Education who has studied ESAs.

The legislation estimates the typical high school class costs a school district approximately $700. The ESA would fund up to eight classes a year, or a full course load, and allow any remaining money to roll over to the next year if not entirely spent.

Complete Customization
ESAs give parents “the ability to completely customize their child’s academic path,” says Derek Monson, director of policy at Utah’s Sutherland Institute.

“A parent will be able to enroll their child in a math class from one public high school with the best math program, an English class from a different school with the best English program, and a science class from yet another school with the best science program, with tax dollars following the student proportionally to those schools,” Monson said.

Giving students options, Dougall said, is “key” today, “as more and more kids are mixing and matching their high school classes.”

Dougall found inspiration for this bill from his son, who took classes from six high schools one year, mixing traditional public high schools with two online schools. ESAs would allow every high school student to design his or her education similarly.

ESA Surge
Earlier this year, Arizona passed legislation implementing Empowerment Accounts—ESAs for special-needs students. Although Utah’s ESA program would only allow students to use funds for public-school options, eligible Arizona students can use their state education dollars for a variety of options including tuition and fees at private schools, tutoring expenses, homeschool costs, college courses, and online classes.

As in Utah, any funding left over at the end of one school year rolls over to the next for Arizona’s program. Accumulated savings can help pay a student’s college education.

More than 100 Arizona families will benefit from an ESA in 2011, according to the American Federation for Children.

Greater Personal Control
Increasing opportunity is the core principle of education savings accounts, enabling families to provide a quality, personally tailored education during a student’s high school years while preparing that student financially and academically for college, Dougall said.

“From parents, I generally hear very favorable comments,” Dougall said. “[The proposal] lets them have greater control over their child’s education. They like the opportunity that says, ‘Oh, if I can save now, I can save money for college.'” 

Eric Hanushek, a senior fellow in education at Stanford’s Hoover Institution, says ESAs offer “an incentive for parents to plan ahead for the education of their children,” because “money put into such an account accumulates tax-free, which confers a great advantage for those who want to provide for their children’s education.” 

Restructuring for Freedom
ESAs restructure education by giving families, rather than government, the greatest authority over a student’s schooling, Hanushek said. They give students flexibility in deciding which classes to take and expand students’ options beyond the doors of the local high school.

Empowering families to choose the education which best fits them and their child will naturally encourage more and better options to proliferate, Monson said, because education providers will have to distinguish themselves to attract students.

“When parents can truly exercise their natural right to direct their child’s education, the options available to them will multiply to meet their child’s needs,” Monson said.

Image by Or Hiltch.