Education Savings Accounts (ESAs) Explained: How They Work and What Families Should Know
Education Savings Accounts (ESAs) have become one of the fastest-growing forms of school choice policy in the United States. As states expand private education options, ESAs are increasingly shaping conversations about how public education dollars are allocated and how families access educational services.
Unlike traditional education vouchers, which typically provide funding for private school tuition, Education Savings Accounts allow families to use public education funds across multiple approved educational expenses. Depending on the state program, these funds may be used for private school tuition, tutoring, educational materials, online courses, special education services, and other approved learning opportunities.
Supporters argue that ESAs provide families with greater flexibility and control over educational decisions. Critics raise concerns about public funding being directed toward private education, oversight requirements, accountability, and the potential effects on public school systems.
Understanding how ESAs work and how they differ from other school choice programs is essential as these policies continue to expand nationwide.
The Children’s Equity Project’s report, The Data and Policy Landscape of Education Vouchers: Inequitable Opportunity and the Unprecedented Shift in Public Education Dollars, examines the rapid growth of voucher and voucher-like programs, including Education Savings Accounts, and explores what these changes mean for educational opportunity and public investment.
What Is an Education Savings Account (ESA)?
An Education Savings Account (ESA) is a publicly funded account that allows eligible families to use education dollars for approved educational expenses outside of the traditional public school system.
Instead of sending funds directly to a public school district, the state deposits money into an account that families can access for approved educational purposes.
Depending on the state, ESA funds may be used for:
- Private school tuition
- Homeschooling expenses
- Tutoring services
- Online learning programs
- Educational technology
- Textbooks and instructional materials
- Curriculum
- Special education services
- Therapy or specialized educational support
ESA programs vary significantly depending on state laws. Some programs have strict eligibility requirements, while others have expanded to include most or all students in a state.
How Do Education Savings Accounts Work?
While ESA programs differ across states, most operate through a similar structure.
1. A state establishes an ESA program
State lawmakers create the program through legislation and determine:
- Eligibility requirements
- Funding amounts
- Approved expenses
- Oversight rules
- Application procedures
2. Families apply for ESA funding
Families who meet eligibility requirements apply through the state agency or an approved program administrator.
3. Funds are deposited into an education account
Approved families receive access to a designated account containing public education funds.
4. Families use funds for approved educational expenses
Families can spend ESA funds on eligible educational services and resources outlined by state policy.
The flexibility of ESAs is one of the primary reasons they have gained attention among policymakers and families.
How Are ESAs Different From Education Vouchers?
Education Savings Accounts and education vouchers are related but distinct policies.
A traditional education voucher generally provides funding that families use toward private school tuition.
An ESA provides families with a broader spending account that can be used for multiple approved educational expenses.
| Education Vouchers | Education Savings Accounts |
|---|---|
| Typically used for private school tuition | Can cover multiple educational services |
| Usually tied to school enrollment | May support customized education options |
| Funds generally go toward a private school | Funds may be distributed across multiple providers |
| Less spending flexibility | Greater family control over education spending |
Both policies represent a shift in how public education funds can be used.
The expansion of ESAs has become part of a larger movement toward increased private school choice and individualized education funding models.
Why Are Education Savings Accounts Expanding?
ESA programs have grown rapidly in recent years as more states pursue broader school choice policies.
Several factors have contributed to this growth:
Increased interest in personalized education
Supporters argue that ESAs allow families to customize education based on individual student needs, including specialized instruction, alternative learning environments, and additional educational services.
Growth of universal school choice policies
Many states have moved beyond targeted programs and adopted broader eligibility models that allow a larger share of families to participate.
Increased focus on educational flexibility
Following disruptions during the COVID-19 pandemic, education options outside traditional school settings received increased attention from families and policymakers.
Expanding political support
Advocates for school choice have increasingly promoted ESAs as a way to give families greater control over education decisions.
Which States Have Education Savings Accounts?
ESA policies have expanded across multiple states, though program structures differ widely.
Some states have created broad ESA programs available to large portions of the student population, while others limit eligibility based on factors such as:
- Household income
- Disability status
- Previous public school enrollment
- Geographic location
- Educational needs
Because ESA laws continue to change, families and policymakers must examine the specific requirements and funding rules in each state.
The Children’s Equity Project report provides broader analysis of how these programs fit within the changing national landscape of education vouchers and private school choice policies.
Who Qualifies for Education Savings Accounts?
Eligibility depends on state law.
Historically, ESA programs were often designed for specific student populations, including:
- Students with disabilities
- Students from lower-income households
- Students experiencing barriers in traditional school settings
However, some newer ESA programs have expanded eligibility to include nearly all students.
Universal ESA programs represent a major change in education policy because they allow families across income levels to access public education funds for private educational expenses.
What Can ESA Funds Be Used For?
Approved uses vary by state, but ESA funds may include:
Private School Tuition
Families may use ESA funds to pay tuition at participating private schools.
Curriculum and Instructional Materials
Families may purchase approved educational resources, including textbooks and curriculum materials.
Tutoring
ESA funds may support supplemental instruction or academic tutoring.
Online Education
Some programs allow families to use funds for approved online courses or educational platforms.
Special Education Services
Some ESA programs allow funding for therapies, specialized instruction, or services designed for students with disabilities.
The flexibility of ESAs is one of the main differences between these programs and traditional voucher systems.
Are Education Savings Accounts Publicly Funded?
Yes. ESA programs generally use public education funds.
The source and structure of funding vary by state. Some programs use state education appropriations, while others are connected to broader education funding systems.
Because ESAs involve public dollars, policy discussions often focus on:
- Financial oversight
- Transparency requirements
- Accountability standards
- Student outcomes
- Effects on public school funding
As ESA programs expand, questions about how these funds are monitored and evaluated remain central to education policy debates.
What Does Research Say About Education Savings Accounts?
Research on ESAs is still developing compared with decades of research on traditional public education systems and some voucher programs.
Current research questions include:
- Do ESAs improve student outcomes?
- Which families benefit most from ESA programs?
- How do ESA programs affect public school enrollment?
- How are funds distributed across communities?
- What accountability measures are effective?
Because ESA programs differ significantly across states, research findings depend heavily on program design, eligibility rules, and implementation.
The growth of ESAs makes continued evaluation important to understanding their impact on educational opportunity and equity.
How Could ESAs Affect Public Schools?
One of the central debates surrounding ESAs involves their relationship with public school systems.
Supporters argue that ESAs:
- Increase educational options
- Provide families with greater flexibility
- Allow students to access specialized services
Critics argue that ESAs may:
- Redirect public education funding away from public schools
- Create challenges for school budgets
- Increase inequities between families with different levels of access and resources
The effects of ESA expansion depend on how programs are designed, how many students participate, and how states fund education systems.
Education Savings Accounts and Educational Equity
A major consideration in ESA debates is whether these programs expand opportunity for all students.
Important questions include:
- Can all families access participating providers?
- Are ESA funds sufficient for families with limited resources?
- Are rural families able to find available educational services?
- Are students with disabilities receiving appropriate support?
- Are private providers required to serve all students?
Educational opportunity depends not only on available funding but also on access, transportation, provider availability, and program requirements.
The Future of Education Savings Accounts
Education Savings Accounts are likely to remain a major focus of education policy discussions as more states consider expanding school choice programs.
As these policies grow, policymakers and communities will need reliable information about:
- How ESA programs operate
- Who benefits
- How funds are distributed
- What impacts occur across education systems
Evidence-based analysis will be essential for understanding how ESA expansion affects students, families, schools, and communities.
Learn More About Education Voucher and ESA Policy
Education Savings Accounts represent one part of a larger transformation in how education funding is distributed across the United States.
For a comprehensive analysis of voucher expansion, funding trends, policy changes, and equity implications, explore the Children’s Equity Project report:
The Data and Policy Landscape of Education Vouchers: Inequitable Opportunity and the Unprecedented Shift in Public Education Dollars
The report examines the changing landscape of education vouchers and related private school choice policies and provides critical context for understanding their impact on public education.