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Rethinking ESA Policy Design: A New Approach to Financial Accountability

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Bibliographic Details
Title: Rethinking ESA Policy Design: A New Approach to Financial Accountability
Language: English
Authors: Katherine Bathgate, EdChoice
Source: EdChoice. 2025.
Availability: EdChoice. 111 Monument Circle Suite 2650, Indianapolis, IN 46204. Tel: 317-681-0745; e-mail: info@edchoice.org; Web site: http://www.edchoice.org
Peer Reviewed: N
Page Count: 8
Publication Date: 2025
Intended Audience: Policymakers
Document Type: Reports - Evaluative
Descriptors: School Choice, Accountability, Educational Finance, Incentives
Abstract: As more families turn to Education Savings Accounts (ESAs) to customize their children's education, many are finding the system unnecessarily complex and restrictive. This paper argues that states can reduce misuse and improve program integrity not by tightening controls, but by shifting incentives. Drawing lessons from other successful government programs, two key reforms are proposed: (1) allow all ESA dollars to roll over and be used for future years and eligible postsecondary expenses; and (2) allow parents to spend ESA dollars without pre-approval, but make them directly responsible for purchases instead of relying on administrators and vendors to be the judges and arbiters. These reforms would encourage families to spend ESA funds more carefully by letting them save unused dollars for future education expenses, including college. At the same time, they reduce red tape by trusting parents to make purchases directly while holding them accountable for misuse through clear legal consequences. As ESA programs continue to grow across the country, this new framework provides state leaders with a roadmap for smarter, simpler implementation of ESAs. [This document was created with State Policy Network.]
Abstractor: ERIC
Entry Date: 2025
Accession Number: ED677222
Database: ERIC
Description
Abstract:As more families turn to Education Savings Accounts (ESAs) to customize their children's education, many are finding the system unnecessarily complex and restrictive. This paper argues that states can reduce misuse and improve program integrity not by tightening controls, but by shifting incentives. Drawing lessons from other successful government programs, two key reforms are proposed: (1) allow all ESA dollars to roll over and be used for future years and eligible postsecondary expenses; and (2) allow parents to spend ESA dollars without pre-approval, but make them directly responsible for purchases instead of relying on administrators and vendors to be the judges and arbiters. These reforms would encourage families to spend ESA funds more carefully by letting them save unused dollars for future education expenses, including college. At the same time, they reduce red tape by trusting parents to make purchases directly while holding them accountable for misuse through clear legal consequences. As ESA programs continue to grow across the country, this new framework provides state leaders with a roadmap for smarter, simpler implementation of ESAs. [This document was created with State Policy Network.]