Alabama is the latest state considering Education Savings Accounts, or ESAs.

The state-funded accounts, in use in other states in the country, cover some costs of homeschool or private school, if a student does not attend their local public school.

Private schools would need to register with the state in order to accept funds for tuition payments.

Sen. Larry Stutts, R-Tuscumbia, and Rep. Ernie Yarbrough, R-Trinity, sponsored SB202 and HB265, respectively. The bills are being considered in the state legislature. If passed, a gradual rollout of ESA access would begin for the 2024-25 school year.

What is an ESA?

ESAs are accounts established by the state where periodic deposits are made that parents can then use to pay for goods and services related to their child’s education.

How much money will parents get in their child’s ESA?

Under the current bill, each student would receive $6,900, paid in multiple payments through the school year.

The average amount of an ESA nationally is $9,300, according to the American Federation for Children, which supports ESAs.

Alabama’s ESA amount is roughly pegged to the current amount of state funding public schools receive for each student.

Will ESA funds be taxable?

No, ESA funds will not be taxable in Alabama.

What happens to any money we don’t spend by the end of a school year?

Any unused funds roll over to the following school year. Any funds remaining in the ESA when a child finishes high school can be used for post secondary expenses.

What if my child returns to public school in the middle of a school year where we’ve already received an ESA?

If a student enrolls in a public school, no further ESA funding would be available to the parent.

Can ESAs be used to attend private school?

Yes, as long as the school is participating in the PRICE Program.

Can parents use an ESA at a religious private school?

An ESA can be used at any participating school.

Can my child transfer between participating schools during the school year?

A child could only transfer between participating schools between semesters unless the participating school substantially changes its operation or the family moves to another part of the state.

Can homeschool parents use an ESA for their child’s education?

Yes, ESAs can be used to pay for multiple types of education materials, therapies, and providers used by homeschooled children.

Can my child use an ESA at any Alabama school? How do I ask my private school to participate?

Schools and education service providers that want to participate would have to register online in order to receive funds from ESAs.

Participating schools would also have to provide information to parents to help them make “informed decisions,” including a comprehensive list of what is taught at which grade level and testing requirements.

When could students be eligible for an ESA? How many are eligible?

ESAs would be available to all children entering one of the following grades at the start of the 2024-25 school year. Numbers provided are the number of students enrolled in public school as of the 2021-22 school year:

• Kindergarten (57,200 students),
• Third grade (53,500 students),
• Sixth grade (55,400 students),
• Ninth grade (59,600 students),
• 12th grade (49,000 students),

And students who are:

• Zoned for schools where test scores in reading and math are in the bottom 30% statewide (around 400 of the state’s 1,300 schools),
• Qualify for special education (around 96,000 students),
• Homeless (7,800 students)
• In foster care (2,800 students),
• Have parents on active military duty, serves as a reserve member of any branch of the U.S. Armed Forces (14,600 students), or were killed in the line of duty (unknown number of students),
• Are siblings of any child eligible in another category (unknown number of students).

All students K-12 would be eligible for ESAs by the start of the 2026-27 school year.

A grade-by-grade breakdown of the 82,000 students currently estimated to be enrolled in private school is not available.

How do I get an ESA for my eligible child?

Parents must apply and applications will be accepted on a year-round, first-come-first-serve basis. Parents must agree to “provide a challenging education for the eligible recipient that is appropriate for his or her age and skill level.”

Parents must renew applications on a yearly basis. ESA funds are not taxable.

Will the government dictate what my child learns if I get an ESA for my child?

The bill specifically states that parents and schools participating in the PRICE Program will not be required to use any specific curriculum or to be tested.

What can I use an ESA to pay for?

If the bill becomes law, money in an ESA could be used for a multitude of educational purposes, including:

• Tuition, textbooks and fees,
• Curricular materials,
• Public school classes, including extracurricular activities at the school,
• Extracurricular activities including athletics, art, music, and literature,
• Tutoring services, but not when the tutor is an immediate family member,
• Materials and fees related to vocational and career tech classes or courses related to earning a GED,
• Summer school and afterschool educational programs and materials, but not childcare,
• Therapy services such as occupational, behavioral and speech-language services,
• Tuition and fees for postsecondary courses including dual enrollment and college-level courses,
• Computer hardware and other technological devices that are used primarily for educational needs,
• Education software,
• School uniforms,
• Test prep courses,
• Costs paid to a third party for transporting students to and from educational services, and
• Any other approved expenses.

Can my child get an ESA if he or she receives a scholarship through the Alabama Accountability Act’s tax credit scholarship program?

Yes, students that receive scholarships through the Alabama Accountability Act are eligible for ESA funds.

Are ESAs available in other states?

ESA programs have been established in 11 states, some limited to certain populations of students such as students with disabilities, according to Education Week.

About 31,000 students used ESAs nationwide last year, according to the pro-school choice organization EdChoice. More than half of those are in Florida.

All students are eligible for ESAs in Arizona.

Four more states, including Iowa, Utah, Arkansas and Florida have passed similar laws but the programs are not yet active.

Which state agency would administer the ESA program?

The Alabama Department of Revenue would administer the PRICE Program.

The department would be required to conduct “random audits of ESAs on an annual basis,” but no specific number of audits is included in the bill. The department would also be required to conduct audits of vendors and education service providers when “evidence of intentional and substantial misuse of ESA funds or other violations” exist.

How much would ESAs cost taxpayers?

The cost to establish the program is $2 million, but there is no estimate of the total cost included with the bill. No local taxes or federal funding would be made available for ESAs.

What school choice already exists in Alabama?

Beyond enrolling a child in the school the child is zoned for, Alabama has the following types of school choice:

• Magnet schools (most have admission tests or requirements),
• Public charter schools,
• Private schools (religious or non-religious),
• Homeschool without cover

Some public school districts allow students living outside of the district to attend their schools, though some charge tuition and can rescind admission if the child’s behavior is unacceptable.