Distribution of Education Savings Account Usage among Families: Evidence from the Florida Gardiner Scholarship Program

ABSTRACT

Education savings accounts (ESAs) are education funding mechanisms that allow families to receive a deposit of public funds to a government-authorized savings account for accessing approved educational services. Using student-level longitudinal data, this paper examines how families participating in the Florida Gardiner Scholarship Program use education savings account funds. Results indicate that families use an increasing proportion of ESA funds when students remain in the program for multiple years. The longer students remain in the program, the share of ESA funds devoted to private school tuition decreases while expenditure shares increase for curriculum, instruction, tutoring, and specialized services. Although students in rural areas use a lower portion of their ESA funds than families in urban and suburban areas, they spend smaller portions of their funds on tuition and appear to customize more.

KEYWORDS:

• Education Savings Account (ESA)
• Florida Gardiner Scholarship Program
• School choice
• Education customization
• Education funding

Acknowledgments

We appreciate the partnership with Step Up for Students to access their data used in this paper. We are grateful to the anonymous reviewers that provided constructive insights that significantly strengthened and improved the quality of this article.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Florida repealed the Gardiner Scholarship Program as of July 1, 2021. Students who participated in the Gardiner Scholarship Program are eligible under the recently expanded Family Empowerment Scholarship Program. For simplicity, we refer to this program as the Gardiner program throughout this manuscript.

2. In 2015, Nevada enacted the Nevada Education Savings Account Program. In 2016, after two lawsuits were filed against the program, the Nevada Supreme Court upheld the program but held the funding mechanism unconstitutional. After several years of not funding the program, the Nevada legislature eventually repealed the program in 2019. In 2017, thirteen states introduced ESA legislation. Arkansas was the first of these to propose a fully universal program to allow for any K-12 public school student to apply (Jimenez-Castellanos et al., 2018; Trivitt & DeAngelis, 2017). However, this program failed to pass. As of June 30, 2021, four states passed legislations to create new ESA programs: Indiana (Education Scholarship Account Program), Kentucky (Education Opportunity Account Program), New Hampshire (Education Feedom Account Program) and West Virginia (Hope Scholarship Program).

3. New applicants to the ESA program must have attended a public school for at least 100 days during the prior school year.

4. The authors examined about eleven fiscal quarters worth of spending data and split the sample period into two periods: September 2011 to March 2013 and Q4 of FY 2014 to Q4 of FY 2015. Thus, there was a one-year gap in data from April 2013 to March 2014. Data reflect account holders’ self-reported receipts while participating in the ESA program during the sample periods and thus do not reflect the exact same group of students.

5. Approved diagnoses are autism spectrum disorder, cerebral palsy, Down syndrome, an intellectual disability, muscular dystrophy, Phelan-McDermid syndrome, Prader-Willi syndrome, spina bifida, Williams syndrome, anaphylaxis, dual sensory impairment, or rare diseases which affect patient populations of fewer than 200,000 Americans. Students are also eligible if A) they are identified as deaf or visually impaired, B) they have had a traumatic brain injury defined by the state board of education, C) they are hospitalized or homebound with a medically diagnosed physical or psychiatric condition for more than six months, or D) they are students aged 3, 4 or 5 who are considered “high-risk” due to developmental delay (EdChoice, 2021a).

6. Students may receive contracted services provided by a public school or school district, including classes. These students are not considered enrolled in a public school for program eligibility purposes.

7. Interest is allocated to students’ ESA accounts on a monthly basis, provided they have a positive balance. Families do not have input on how funds are invested or distributed.

8. We combined students in town and rural areas, as just 0.6% of the observations were classified as town.

9. Compared to the racial/ethnic distribution of students in Florida public schools, a lower proportion of black students (9% vs. 22%) and higher proportion of white students (54% vs. 37%) participate in the ESA program.

10. Students aged 3, 4, or 5 with developmental delay are considered “high-risk.” Exceptional Student Data by Exceptionality from the Florida Department of Education indicate that 11.7% of students are diagnosed with autism spectrum disorder in school year 2018–19. Our sample likely has a larger share of autism spectrum disorder students due to the limited number of specified disabilities who qualify for the ESA program (see footnote 5) versus the broader exceptionality categories identified in the state’s data.

11. These rates are similar when we exclude students in grade 12 and when we include only students who used their ESAs to pay for private school tuition.

12. It is possible that some of the students observed leaving the program did so because they graduated, aged out, or moved out of state.

13. This trend is similar to that observed among students who participated in the program for five years, where the share of non-private school tuition-related expenditures increased from 28% in 2015 to 44% in 2019.