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Iowa signs school choice into law! But what does it mean for parents?

Des Moines, IOWA – The Iowa Capitol Rotunda overflowed with nearly 300 people and multiple standing ovations on Tuesday, Jan. 24, 2023, to witness Iowa Gov. Kim Reynolds sign landmark, school-choice legislation into law.

After failing to cross the finish line in the last two legislative sessions, the game-changing Students First Act was passed in the early morning hours on Jan. 24, a determined effort by Iowa legislators, parents, and advocates, whom Gov. Reynolds praised in her celebratory remarks.

The Governor also declared the new law a victory for Iowa parents and schoolchildren.

“I cannot think of a more worthy cause to aim high and dream big than the future of our children,” Reynolds said. “For the first time, [Iowa] is funding students instead of an institution … giving every student the opportunity to find their place in the world and build the best foundation for their future.”

The FAMiLY Leader has passionately advocated for school-choice legislation for decades. We believe the Governor’s bill is a monumental step in the right direction that will positively impact the culture for generations to come. There are many reasons that TFL supports school choice:

  • School choice empowers parents. Individual children have individual educational needs, and parents are in the best position to know what is best for their children.
  • School choice breaks the public-school monopoly and introduces competition among education providers. Dozens of studies on school choice reveal this positively affects ALL schools, both private and public.
  • School choice opens doors for the spread of the gospel. Many parents will now be able to afford an education for their children that is grounded in God’s Word and suited to their biblical values.

Below, we answer some of the most common questions regarding the new school-choice program:

What does the Students First Act do?

It allows Iowa parents to apply for an Education Savings Account (ESA) for their K-12 children. Each ESA will be connected to an individual student and will be funded by the state every year with an amount equal to “the regular program state cost per pupil” for that year. For the 2023-24 school year, the amount will be $7,598. ESAs will be controlled by parents and can be used to pay tuition and fees at an accredited private school of the parents’ choice. ESAs can be used to pay other, “qualified educational expenses” as well. Students will be eligible for an ESA until they either graduate from high school or turn 20 years old.

When will my student be eligible for an ESA?

The ESA program will roll out in phases and be fully implemented after three years:

  • YEAR 1 (2023-24 School Year) ESAs will be available to . . .
    All kindergarten students
    All public-school students
    Private school students at or below 300% of the Federal Poverty Level ($83,250 for a family of four)
  • YEAR 2 (2024-25 School Year) ESAs will be available to . . .
    All kindergarten students
    All public-school students
    Private-school students at or below 400% of Federal Poverty Level ($111,000 for a family of four)
  • YEAR 3 (2025-26 School Year) ESAs will be available to . . .
    All K-12 students (regardless of income)

How do I apply for an ESA?

Parents must apply for an ESA by June 30 preceding the school year for which the ESA is requested. The Department of Education will shortly be implementing the program, and more details on how to apply will be forthcoming.

How will ESA transactions be made and approved?

These details need to be worked out as well. The law contemplates “automated clearinghouse transactions, electronic commerce transactions, reimbursement transactions, and debit card payments” as options. But it ultimately leaves it up to the Department of Education to determine which types of transactions will be available to parents. The Department of Education will also be responsible for preventing fraud and ensuring that ESA funds are only spent on qualified educational expenses.

Can families use an ESA to pay for their homeschooling expenses?

While some homeschooling expenses may fit under the definition of “qualified educational expenses,” only students enrolled in an accredited private school will be eligible for an ESA.

What happens if my student doesn’t use all the money in their ESA?

Any money remaining in an ESA at the end of a school year remains in the account and can be used by the parents in future years. If there is money remaining in an ESA when the student is no longer eligible, the money goes into the state’s general fund.

Does the ESA program divert money from public schools to private schools?

Not exactly. It diverts taxpayer funding from the public school system to parents of school-age children. It allows parents to spend those funds at the school that is best for their child.

Will the ESA program reduce funding for public schools?

A public school will only lose funding when a student takes an ESA and no longer attends the public school. When this occurs, $7,598 of state funding will go with the student. However, the public school will continue to receive thousands of dollars in funding from other sources, despite that student no longer being educated by the public school. The public school will also receive an $1,205 in categorical funding from the state when a student takes an ESA. On the whole, Iowa’s Students First Act ESA program will actually increase the per-pupil funding of public schools.

Can the private schools receiving ESA funds be held accountable?

Yes. First of all, private schools receiving ESA funds are required to be accredited. Ultimately, however, private schools are held more directly accountable by parents who may choose to remove their child(ren) from a private school at any time to enroll them in another school.