Iowa school voucher applications surpass expectations, cost likely to follow

A few weeks after Gov. Kim Reynolds signed the "Students First Act" into law, a new poll shows the majority of Iowans oppose it.
Published: Jun. 9, 2023 at 12:32 PM CDT
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CEDAR RAPIDS, Iowa (KCRG) - The number of Iowans applying for an Educational Savings Account under Iowa’s new school voucher program has surpassed projections, raising questions on the costs to state taxpayers and local school districts.

As of Friday, the Iowa Department of Education says it has received 15,538 applications for an Educational Savings Account, or ESA, to provide state funding for a student to attend a private K-12 school. A Legislative Services Agency analysis projected 14,068 would enroll in the first year of the program. The application period runs through June 30th, meaning the number of applications will likely continue to grow.

If all of those applications are approved, the taxpayer cost for the program would likely exceed the $107 million dollars estimate for this coming school year. It would also likely mean a larger-than-expected loss in funding to public schools due to students enrolling instead in a private institution. State funding to public schools is based on enrollment, so fewer enrolled students would mean less funding from the state. Governor Reynolds’ voucher program aimed to offset at least some of that by giving districts $1,176 per student who lives in a district and enrolls in a private school.

The state declined to provide demographic data on the applications so far, citing the ongoing application period. That means it’s unclear yet how many of the applications are from public school students. It’s also impossible to know yet whether certain counties are seeing a disproportionate share of applications since the LSA analysis also noted only 57 of Iowa’s 99 counties had a certified private school. That had been a concern of even some Republican lawmakers who worried the voucher system would disproportionately hurt rural areas.

Governor Kim Reynolds made the school choice law a focal point of last November’s election and this year’s legislative session, signing the bill into the law within the first weeks of the session.

“I believe that school choice will improve our overall education experience in Iowa,” Reynolds told TV9 in a statement on the application data. “I believe it will create a system of schools, both public and private, that are driven by student-centered missions. Iowans are hungry for Educational Freedom and the application numbers are a reflection of that.”

While Gov. Reyolds touted the program as empowering parental choice in education, critics argued it took state funding away from public schools with public oversight and handed it over to private schools with less public accountability on how those funds are used.

The ESA provides nearly $7,600 in state funding to each student who enrolls in a private school to pay for tuition to attend that school, as well as other approved educational expenses like tutoring. The funds cannot be used for school supplies, textbooks or college tuition and any unspent funding would be returned to the state once the student graduates high school or turns 20 years old.

Since the law was signed, some private schools have raised their tuition and Holy Family Catholic Schools in Dubuque reported an increase in applications since Governor Reynolds signed the school voucher law.

There is no limit on the number of students who can enroll for an ESA but there are limits in the first two years on who can enroll for an ESA. Any student not previously enrolled in a private school is eligible for an ESA for enrolling in a private school. For students already enrolled in a private school, families earning less than 3 times the poverty level, which equals $83,250 for a family of 4, would also be eligible. That increases to 4 times the poverty level for the 2024-25 school year and removes any restrictions on eligibility after that school year.