Research & Commentary: Education Savings Accounts for Special-Needs Children

Published March 3, 2014

In 2011, Arizona pioneered education savings accounts, an innovative form of school choice that deposits a child’s state education money into an account parents control and can use for a variety of education options, such as tutoring, therapy, online classes, textbooks, and extracurricular activities. This option expands the benefits of vouchers by giving parents a reason to be cost-conscious and the power to customize their child’s education rather than just send them to a different school. In each subsequent year, Arizona lawmakers have expanded the program to other groups of children, including those in foster care, military families, and those zoned to attend low-performing schools.

In 2014, at least three other states – Mississippi, Missouri, and Oklahoma – are considering education savings account legislation.

Those who oppose such laws say they remove money from public schools, and they frequently claim special-needs children will be denied legal rights to certain education services in the private market and therefore receive a worse education. They say school choice for special-needs children opens the door to choice for other children, eventually leading to the collapse of public education.

ESA proponents note many special-needs children have very poor outcomes despite their legal rights to certain services from public schools. Many parents of special-needs children resort to litigation and negotiation to get what they want from the public system, which is expensive, time-consuming, and frustrating. And litigation is an option typically available only to wealthy or well-connected families. Research has shown giving families a choice about how to educate their children improves achievement, reduces costs, and makes families much happier.

The money saved from this program can then either go back to public schools to help them educate their fewer students, back to the taxpayers who earned it in the first place, or both.

The following articles offer more information about education savings accounts for special-needs children.


Study: How to Create ‘Next-Gen Vouchers’ 
Parents will have ultimate control over their child’s education dollars when states move existing school choice programs into education savings accounts, says a new report. The report profiles the Locke and Visser families. Jordan Visser has cerebral palsy, and Kasey Locke is autistic. Both families use their children’s ESAs to provide specialized education opportunities not available through the state’s traditional K-12 system.

Parents Unbundle Education in Arizona
In 2011, Arizona was the first state to create education savings accounts (ESAs), a form of school choice in which 90 percent of state per-pupil funds go into a bank account parents can use to purchase a variety of education services, such as textbooks, online classes, tuition, and tutoring. One-third of parents allowed to “unbundle” their children’s education using this novel form of vouchers split the money into a variety of education opportunities, while the other two-thirds use their education savings accounts more like a voucher, a study reports.

ESA Basics: Key Points of Empowerment Scholarship Accounts
This fact sheet from the Goldwater Institute explains how Arizona’s education savings accounts work. It describes eligibility and basic regulations on how parents may use the funds.

Debit Card: What Arizona Parents Purchase with Education Savings Accounts
As parental choice in education takes root in more communities throughout the United States, education savings accounts (ESAs) have taken on greater importance as the funding mechanism for customized learning, argues Lindsey Burke in this policy report. This is especially true in Arizona: The state’s version of ESAs, known as Empowerment Scholarship Accounts, enables families to completely tailor their children’s educational experience.

New Day for School Choice: Education Savings Accounts Turn 3 Years Old
This policy brief by Jonathan Butcher of the Goldwater Institute reviews the ESA’s first years of operation in Arizona. Legislative changes since lawmakers enacted the accounts have given more children access, and in 2013, researchers conducted the first studies of how families are using the accounts. This brief covers the new legislation and research, along with developments in a lawsuit an Arizona teachers’ union and school boards’ association filed against the accounts. Finally, this report offers three recommendations for education savings account expansion, fraud prevention, and academic transparency. 

Preventing Fraud and Abuse in Education Savings Accounts
Any system that uses taxpayer dollars is subject to waste, fraud, and abuse, notes Jonathan Butcher in the Tucson Sentinel. Experience with government programs such as Medicaid and food stamps provides insight into how to stop and prevent similar fraud in Arizona’s education savings account program. Potential safety measures include random audits, a fraud reporting system, and letting parents buy surety bonds using account funds.

Dollars, Flexibility, and an Effective Education: Parent Voices on Arizona’s Education Savings Accounts
In this policy report, Jonathan Butcher concludes Arizona’s education savings accounts are the most innovative way for parents to find a great education for their child. On May 8, 2013, the Goldwater Institute conducted a focus group for savings-account families. Key findings include: 94 percent of participants said they were “very satisfied” with education savings accounts, and 6 percent were “somewhat satisfied”; parents report the public school and district officials they encounter show little knowledge of education savings accounts; and parents say it is a significant challenge to renew their child’s special-needs diagnosis at a public school, which is required to remain eligible for a savings account.

The Way of the Future: Education Savings Accounts for Every Family
Nobel Prize-winning economist Milton Friedman proposed a system of school vouchers more than 50 years ago to improve education outcomes and efficiency. Technological advances now allow programs that replace state-funded tuition vouchers with accounts parents can manage to the last penny. Writing for the Friedman Foundation for Educational Choice, Matthew Ladner notes ESAs allow parents to choose between a much wider range of instruction than under the current system, including schools, tutors, online educational programs, and higher education. This gives parents incentives to judge education providers on both quality and cost—a unique and crucial trait currently lacking in publicly financed K-12 education.

Expanding Education Choices: From Vouchers and Tax Credits to Savings Accounts
This Heritage Foundation Special Report presents three ways states can refine their existing school choice programs by transforming existing voucher and tax-credit programs into flexible education savings accounts. A movement is gaining momentum to give all parents the ability to choose where—and how—their children are educated. This movement builds on longstanding school choice programs, including the Milwaukee Parental Choice Program, the D.C. Opportunity Scholarship Program, and private school scholarship options in Florida and Pennsylvania, among other states. The next generation of educational choice must offer more than school choice. Parents should have the flexibility to choose among schools, online courses, tutors, and other education services through education savings accounts (ESAs). ESAs give parents control over the funds a state would have spent on their child in a public school, allowing them to use their child’s funds for a variety of education services and products. 


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If you have any questions about this issue or The Heartland Institute, contact Heartland education policy research fellow Joy Pullmann, at 312/377-4000 or [email protected]