10 Things to Know About the Arizona ESA Program

The state of Arizona passed their Empowerment Scholarship Account (ESA) program in 2011. Since then, the program has grown to over 12,000 students, with that number expected to double within a month with the passage of the new universal ESA expansion. The expansion means that all? K-12 children who didn’t previously qualify, now do.?

As lawmakers consider launching similar scholarship programs in their own states, they can look to Arizona and other states who have led the way. Here is our quick list of “ten things you need to know” about Arizona’s ESA program:

1. The ESA can be $28k+. Arizona’s ESA funding per student is 90% of the state’s portion of per-pupil funding. This means that families who have a child with a qualifying special need in one of the thirteen disability categories may receive higher funding. This has enabled families with diagnoses like autism to receive around $28,000 per year for home education, tutors, therapies, private school and more.
2. Preschoolers sometimes qualify. Preschoolers (age 3 - 5) qualify for an ESA if they have a qualifying special need from a public school and the appropriate paperwork such as a Multidisciplinary Education Team (MET) report or an IEP. The funding for preschoolers is between $3200 - $9000 depending on their disability. Arizona has allowed preschoolers to access the program if they have a qualifying special need. For example, if a student is evaluated for Speech Language Delay (SLD) and qualifies for speech services through the public school system, a parent can take that qualifying paperwork and apply for an ESA. Because of IDEA law and Child Find, all families in Arizona (and all 50 states), including homeschoolers and private schoolers, can request evaluations from their local public school.?
3. ESA + Health Insurance is allowed. The Arizona legislature addressed this issue in the 2021 legislative session. Many families reported having to pay higher costs for services like speech therapy because the Department of Education did not allow families to use their health insurance for a qualifying expense and then pay the difference with their scholarship funds. A.R.S. 15-2402(b)(4)(i) reads: “(i) Educational therapies from a licensed or accredited practitioner or provider, including and up to any amount not covered by insurance if the expense is partially paid by a health insurance policy for the qualified student.” This enables families to use health insurance first and get a better rate, which saves them from having to spend more of their ESA funds.?
4. 100 days > 45 days > no days. The Arizona ESA program originally required participants to have 100 days in public school or the Arizona Online Instruction (AOI) equivalent hours in the prior school year AND meet the qualifying disability guidelines in order to qualify for scholarship funds. During the 2021 legislative session, this was reduced to only 45 days in the prior or current school year. Because many families moved to Arizona and had a child with special needs, or for families home educating or in private school who only recently received a diagnosis, this public school attendance requirement prohibited many families from qualifying for an ESA, even with a special need. The universal ESA expansion passed in the 2022 legislative session removes the public school attendance requirement.?
5. Private evaluations can now be used. One barrier to entry for many families in qualifying for the ESA program was that a MET, 504 plan, or IEP had to be obtained in order to qualify under the special needs category. This meant that families not only had to meet the 45 days, but they also had to get approval from the public school district, even when they had a private diagnosis for dyslexia, speech, or autism, for example. As a result, many families were not able to get the district to qualify their children, and parents reported that districts often made it difficult for them when they found out they may be considering an ESA. During the 2022 legislative session, HB2853 addressed this issue by allowing the use of private evaluations to qualify students for higher ESA funding.?
6. The Department of Education & The State Board of Education. Arizona’s ESA program since its inception has been housed inside the Arizona Department of Education (ADE). ADE is responsible for administering the program and received approximately $2.2 million for staffing for FY2023. The Arizona Treasurer’s office is responsible for the funding transfers to ADE for ESA account holders. Applications, account management, expense approvals and program administration are managed by ADE. In 2020, the legislature authorized the Arizona State Board of Education (SBE) to adopt rules and policies necessary to administer the ESA program (See A.R.S. 15-2403(I)).?
7. Rules added + clarity provided. The State Board of Education established rules found in Arizona Administrative Code R7-2-1501 to help bring clarity and consistency to the program for account holders. The rules may be a helpful tool for other states in considering rules and policies needed for successful implementation, including application processes, use of funds, expense review, and appeals.?
8. Quarterly reports bring transparency. The State Board of Education established rules including a required quarterly report from the Arizona Department of Education. The quarterly reports address applicants by category, grade level, funding level, and also outline feedback from parents on their approval and use of the ESA program and other helpful data points. The latest Arizona ESA quarterly report can be found here.?
9. Degrees and Certifications. The Arizona Department of Education determines what certifications must be held in order for services to be qualified for the use of an Empowerment Scholarship. The list is outlined in ADE’s ESA handbook, but a state teaching certificate is not required for tutoring, however a college degree is. There are other certifications that are accepted for use that don’t require a college degree, and families can reach out to ADE to inquire about any degree or certification that is not in the handbook.?
10. Qualifying categories before Universal. Prior to becoming universal - Arizona had a series of eligibility categories that made it difficult to access the program. For example, even though an estimated 250,000 students qualified for an Arizona ESA, in the last ten years, the total only reached 12,000 students on an ESA in 2022. The categories included things like having a MET/504/IEP from a school district, military family, leaving a D or F rated school and more. While the categories were expanded every few years, the challenges of knowing if a parent qualified created barriers to entry for families who may have met one requirement, like a special needs child, but didn’t meet another, like the 100 days of public school requirement. Universal eligibility has now removed this barrier to entry.?

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