The most controversial aspect of Arkansas LEARNS, the state’s new K-12 education law, is the voucher program it creates, allowing families to use public funds to send their children to private schools. Parents who home-school their children will also eventually be eligible for funding to cover certain expenses.
Once fully implemented, all students from kindergarten through high school — regardless of income level or other factors — will be eligible to apply, including those already enrolled in private schools.
The vouchers are known as “Educational Freedom Accounts.” For the sake of simplicity, our dignity, and yours — we’ll just call them vouchers.
How much are the vouchers?
A voucher covers up to 90% of the amount public school districts received the prior year in per-student state foundation funding. (To oversimplify a bit: Foundation funding is a per-student baseline amount of funding that all districts receive, paid for by a combination of local property tax revenues and state funds. It typically makes up a little more than half of a district’s funding, with the rest coming from other federal, state and local funds.)
Per-student foundation funding for public schools last year was $7,413; a 90% voucher based on that amount would be roughly $6,672. (The annual foundation funding amount typically increases incrementally over time.)
How do vouchers work to help families pay tuition?
The payment system for the vouchers will be run this year by ClassWallet, a private company contracting with the state. Participating private schools will invoice parents for tuition, fees, uniforms, or other designated items, such as uniforms or required educational expenses. Parents will upload the invoice to their ClassWallet portal, which allows them to use voucher funds to cover those costs. The education department will then approve the expenses and disburse payments to the schools.
If a private school’s tuition was $10,000, for example, parents would still have to pay the school the difference after the voucher was applied — that is, $3,571.30 — while the state would pick up the tab for the rest.
If a private school’s tuition was $5,000, parents wouldn’t have to pay anything out of pocket. This school year, the state expenditure for such a family would be just $5,000, rather than the full cost of the voucher, unless families used the remaining funds for other allowed expenses.
Beginning in the 2024-25 school year, students who remain in the voucher program will see unused funds roll over from year to year until the student leaves the voucher program, graduates or ages out at 21. Presumably, families will tend to use all the funds they can in a given year, so it’s unclear how often rollovers will come into play. But a family could theoretically spend $5,000 of a roughly $7,000 voucher and then roll money over to spend $9,000 the following year.
This could prove useful to a family if a school were to raise its tuition over time, if a student transfers to a more expensive school, or if a home-school family has a major change in the amount of necessary expenses. The rollover provision is one factor that could make annual state costs unpredictable once the program is fully phased in.
What expenses can vouchers cover beyond school tuition and fees?
In the 2023-24 school year, parents can also use voucher funds to cover the cost of school uniforms, mandated testing, and required educational expenses that private school families have to pay for themselves, such as supplies.
In the program’s second year and future years, the list of qualified expenses will expand, including tutoring services, curricula, certain technological devices for educational purposes, college admissions tests and various other designated educational expenses —as well as anything else the Arkansas Department of Education approves.
Who’s eligible for vouchers now? What about in coming years?
The vouchers are designed to phase in over time. Initially, only certain students will be eligible. By the 2025-26 school year, all students will be eligible to apply, with priority given to certain students if not enough funding is available.
In the 2023-24 school year, only the following students can apply:
- Students who were enrolled the previous year at schools with an F rating or in school districts in need of Level 5 intensive support (those deemed the worst performing schools or districts by the state).
- Students enrolling in kindergarten
- Students in a foster care program (currently or previously)
- Students with a disability that requires an Individual Education Plan under federal law;
- Homeless students;
- Students with an active-duty military parent.
In 2024-25, eligibility will include all of the above and also be extended to the following students:
- Students enrolled in a D-rated school
- Students with a parent who is a military veteran or in the military reserves
- Students with a parent who is a first responder or a law-enforcement officer
In 2025-26, all students eligible to enroll in a public school will be eligible to apply for a voucher. However, the law does not guarantee that every student eligible to apply will get a voucher. Enrollment is limited by available funding, and the program also has specific caps on the number of students who can enroll in its first two years.
What is the application process?
Both parents and private schools must apply in order to be eligible for vouchers. For families, the “priority deadline” for applications this year was Aug. 1, with funding allocated on a first-come, first-served basis. As of mid-August, there were still slots and funding available for the vouchers, so families can continue to apply until that runs out.
The application for private schools requires schools to provide their tuition rates, school calendar, and an itemized list of all required student expenses, as well as verifying that they meet program requirements.
What requirements do private schools using vouchers have to meet?
In order to qualify for vouchers, private schools must be accredited based on guidelines established by the state Board of Education or other approved accrediting associations.They must also attest that they are fiscally sound and that they hire teachers who have at least a bachelors’ degree (or equivalent documented experience), among various other requirements.
Private schools also must commit to giving an annual test to voucher students in order to assess their learning — either the same test given by the state to public school students or another approved assessment.
Critics of voucher programs have raised questions about accountability and the quality of private schools operating with potentially less oversight, particularly as schools proliferate in response to new funding. They have also expressed concern about the ability to compare public schools and private schools if many of the latter use different tests.
Do private schools have to accept all voucher applicants the way that public schools typically must accept all students eligible for that school?
In short, no.
Private schools can follow their normal admissions process for voucher applicants and admit or exclude students based on their own policies, though they must follow federal law and not discriminate based on race, color or national origin. To expel a voucher student, private schools must follow clear, pre-established disciplinary procedures.
How does all this work for home schooling?
If parents home-school their children, they will not be eligible for the voucher program in the first year, when only private school tuition and fees — along with certain expenses required by private schools — are covered. In the second year of the program and beyond, home-school families can only apply to be reimbursed for specific expenses.
They can’t use vouchers for a lump-sum “tuition” payment to themselves as the managers of a home-schooling operation (though there may be something of a workaround for small pods in a home environment — see below on “microschools”).
Qualified expenses include curricula, instructional materials, certain technological devices for educational purposes, and various other expenses outlined in the law — as well as any other educational expenses approved by the education department.
How many families and schools have applied so far?
According to the education department, it has thus far approved 93 private and parochial schools to participate in the voucher program. Three more have applied and are still under review. You can see a map of the schools in a recent piece by Antoinette Grajeda of the Arkansas Advocate, along with a list of those schools and their tuition rates (updated as of Aug. 10).
Thus far, 5,237 students have applied, of which 4,775 have been approved to take part in the voucher program, according to the state. The delay on approvals is due to a time lag from later applicants and some applications being sent back to get additional documentation, education department officials said. The applications usually take three to five days to process.
The education department provided the following breakdown for applicants as of Aug. 18:
- 41% are students with disabilities
- 13% are students previously enrolled in the Succeed Scholarship program (this group overlaps with several other categories, with many of the students disabled).
- 34% are kindergartners enrolling for the first time
- 7% are children who are or were in foster care, or are homeless
- 4% are children of current active duty military personnel
- 1% are students who were enrolled in an F-rated school
How many students can participate in the voucher program?
LEARNS sets caps for the first two years on the number of students who can participate in the voucher program. This year’s participation is capped at 1.5% of the total student enrollment in public schools, around 7,000 students. As of mid-August there were still slots and funding available for additional applicants for this school year.
Next year, the cap will be 3% of the total student enrollment in public schools, around 14,000 students. Once the program is fully phased in, in 2025-26 and beyond, there is no set cap on the number of students who can participate. However, funding for the voucher program is not unlimited.
How much funding is available?
The funding for the voucher program will be set by the legislature annually as part of the normal appropriation process, so it will ultimately be up to lawmakers just how many students the program can cover.
For this year, $46.7 million in state funds have been allocated to the program. Eligible families are served on a first-come, first-served basis up to the enrollment cap as long as funding is available. State officials project the cost next year will be $97.5 million, in order to cover up to 14,000 students. Priority will be given to those already enrolled in the program the previous year.
Once the program is fully phased in, in its third year, priority will be given first to those who met the qualifications in 2023-24 and then to those who met the qualifications in 2024-25. Priority will otherwise be given to students who have been with the voucher program the longest.
How much will the program cost?
In addition to the cost estimates provided by the state for the first two years of the program (see above), Robert Brech, deputy director of budget at the Department of Finance and Administration, testified to the legislature on Feb. 28 that it is projected to cost $175 million in its third year, once all students become eligible to apply.
If state lawmakers hope to eventually make the program available to all interested students, costs could balloon. Arizona’s universal school voucher program had initially been projected to cost $65 million this year. State officials now expect the cost to be $900 million, nearly 14 times higher than the initial estimate, and hundreds of millions of dollars more expensive than the funding initially allocated by the law.
However much Arkansas’s new voucher program costs the state, a portion of the funding won’t go to families or schools. LEARNS allows up to 5% of the voucher funding to be withheld by the education department for program administration, including contracting with a third-party vendor (this year, that’s ClassWallet). That could amount to tens of millions of dollars in administrative costs over the first decade of the program.
What happens to the Succeed Scholarship program?
The state has had a more limited voucher program for several years: The Succeed Scholarship program offered private school vouchers for certain students previously enrolled in public school: students with certain disabilities, children of uniformed service members and foster children. It will now be absorbed into the LEARNS voucher programs, with all Succeed students automatically eligible to apply for the vouchers this year.
The Succeed voucher was slightly more generous than the new LEARNS vouchers. Succeed scholarships could cover up to the full amount of per-student foundation funding for that academic year (that’s $7,618 in the 2023-24 school year) as opposed to the 90% of prior-year foundation funding provided by the LEARNS vouchers. Succeed students will continue to get that higher voucher amount this year.
A smaller voucher program gives matching state tax credits for private donations that fund private-school scholarships for families who make less than 200% of the federal poverty line. That program will continue, and its funding has increased under LEARNS.
What about “microschools”?
Families could look at yet another option available for funding under the LEARNS voucher program: “Microschools,” typically serving five to ten children, are formed by a small group of parents to offer schooling for their children in a home environment or another available space, often purchasing instruction programs from private vendors.
In practice, a microschool might involve activities similar to homeschooling, but could potentially qualify for tuition vouchers as a private school, so long as they meet state requirements for that designation.
Prenda, an Arizona-based startup founded in 2015, has become a major player in the space, facilitating microschools in multiple states serving thousands of children, including in Arkansas. In a recent article in the Washington Post, Prenda’s CEO described the company as being like AirBnB for education. Instruction is led by “guides,” who do not have to have teaching certification or subject-area expertise. Parents may choose to be compensated as guides themselves or hire someone with Prenda’s assistance. The Prenda fee per student this year is $2,199; the fee for the guide could range from $2,800 to $8,000 per student.
Lighthouse Homeschool Cooperative in Jonesboro, which serves children with autism, first began using the Prenda microschool model a few years ago. It was one of a number of newly established microschools in the state that received private grant funding for scholarships in 2020 via the Reform Alliance, a pro-voucher advocacy group that previously managed the state’s Succeed voucher program (the group now promotes Prenda on its website). Lighthouse successfully applied to participate in the voucher program as a private school this year, with annual tuition listed as $8,200, and $250 in additional expenses.
LEARNS was sold as a lifeline for poor families stuck in failing public schools. But will it primarily benefit richer families who would already use private schools?
Some voucher programs check the income of applicants in order to target the benefits toward low-income families. As a universal program, the LEARNS vouchers do not.
Many rich families, who have already benefited significantly from state tax cuts in recent years, can get an additional boost to their after-tax disposable income once the vouchers are fully phased in. A voucher will cut the cost of annual private school payments they would already make by thousands of dollars. Public school families will get no such financial benefit even if they take advantage of the program.
Arizona was the first state to offer vouchers to all students as a universal program. The first year, 75% of students who applied had not been enrolled in the public school system.
For whatever reason, unlike Arizona, the Arkansas Department of Education is not tracking whether students participating in the voucher program came from public schools or private schools. Without such tracking, it will be difficult to determine what’s really happening in Arkansas. One piece of data: Thus far, just 1% of voucher applicants — around fifty students in the entire state — are using the vouchers to leave F-rated public schools for private schools.
How might vouchers affect private school tuition?
Some private schools may raise tuition in response to the law, particularly once it’s fully phased in. By doing so, they could access more state funds while keeping the out-of-pocket cost for parents lower or roughly the same. Some private schools in Florida and Iowa, for example, have raised tuition this year in response to new voucher programs, justifying the increases by pointing to the new public money available for parents.
Currently, many private schools charge less for tuition than the total amount of the voucher. Once the floodgates open and all students are eligible to apply, that would amount to those schools leaving money on the table, so many may raise tuition at least up to the full voucher amount at that point.
How will the vouchers impact public schools and the education system as a whole?
At least 32 states have at least some form of voucher program that uses public money to subsidize enrollment at private schools. Many are smaller programs targeted at the neediest students, much like Arkansas’s earlier Succeed Scholarship program. Arkansas, Florida, Iowa and Utah have all enacted universal programs this year, joining Arizona, which became the first state to do so last year.
In general, voucher programs by design will tend to route students and funding out of public schools and into private schools. For many backers of vouchers — often sharply critical of public schools — this is a feature of the program, not a bug. Voucher skeptics see it much differently.
If students leave public schools and head to private schools, the public schools will lose state funding that was based on the number of students. Depending on other sources of funding, some districts may be more reliant on foundation funding than others. In some cases, districts could also face an additional hit if they are receiving federal funding with a per-student formula.
“School districts can absorb some of the cuts with layoffs and reduced funding for textbooks and supplies,” a recent report from the Center for Budget and Policy Priorities said. “But schools also have expenses that are fixed or more independent of student enrollment, such as air conditioning, school buses (because the enrollment reduction is spread out across a district bus routes are unlikely to fall proportionally), and building maintenance. Depending on the timeline for school districts’ budgets, readjusting for voucher and district fixed costs during the academic year can lead to end-of-year deficits and sudden layoffs.”
This post may be updated as additional information and developments become available.
