Students who attend Iowa Catholic schools will soon get a financial boost of nearly $7,600 per year after the Iowa governor signed into law “school choice” legislation that allows parents to receive state funds to help pay for private schools.

Gov. Kim Reynolds signed the Students First Act into law on Jan. 24.

“It’s a great day for education in Iowa, both for private and public schools,” Bishop R. Walker Nickless of Sioux City said Tuesday.

“We look forward to serving more families in the Diocese of Sioux City who want to enroll their child in a Catholic school,” he added. “We are also pleased that the Students First Act will also help parents keep their child in the Catholic school of their choice and assist us in enhancing quality education.”

The Republican governor had made the legislation a priority. 

“Public schools are the foundation of our education system and for most families they will continue to be the option of choice, but they aren’t the only choice,” Reynolds said in a statement. “For some families, a different path may be better for their children. With this bill, every child in Iowa, regardless of zip code or income, will have access to the school best suited for them.”

The legislation, House File 68, passed largely along party lines in the Republican-controlled legislature. The vote in the House of Representatives was 55- 45, with nine Republicans opposed. The vote in the Senate was 31-18 with three Republicans opposed.

The Students First Act creates an Education Savings Account program. Through this program, parents or guardians who enroll eligible children in an accredited private school will receive the same amount of per-pupil funds that the state gives to public school districts. 

The funds go into an education savings account that may be used for tuition, fees, and other qualified expenses. The funds for the 2023-2024 school year are estimated to be $7,598 per pupil. If the funds are not depleted for the school year they may remain in the account for qualified expenses in future years.

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Patty Lansink, superintendent of the Diocese of Sioux City Catholic Schools, said her office and administrators are “overjoyed” with the signing of the bill.

“After many years of sharing our story of Catholic schools and the importance of school choice for our parents, we are so happy that parents of all income levels can send their child to the school of their choice,” she said. “We thank all the supporters of Catholic schools and nonpublic schools who reached out to their legislators to make education savings accounts a reality for Iowa families.”

The program’s application period will begin once the system is implemented and close on June 30 for the upcoming school year.

“For students currently attending a Catholic school, the plan will be phased in over the next two and a half years, focusing first on the families with the lowest income levels,” the Iowa Catholic Conference said on its website.

After three years, an education savings account will be available for every student.

In 2023, current Catholic school students will qualify for an account if their family income is at or below 300% of the federal poverty level, $83,250 for a family of four. In 2024, the eligibility will expand to families whose income is at or below 400% of the federal poverty level, $111,000 for a family of four.

The program is expected to cost $345 million per year when it is fully implemented. Public schools will receive a small financial benefit for each student who participates in the program. Each student with an education savings account will mean an additional $1,205 for the public school district in which he or she resides.

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Critics said the legislation harms public schools and will worsen equality in education by diverting funds. They objected that the program funds private schools that lack accountability and that can choose which students to accept, The Des Moines Register reported. They said there is no help for public school students’ expenses like tutors, advanced placement tests, and college exam fees.

“Spending public money with no accountability is reckless. Our public schools and students deserve better,” State Sen. Molly Donahue, D-Cedar Rapids, said Monday. “Until we are willing to provide adequate funding for the vast majority of our public school students, we should not be creating a private, exclusive school entitlement program with unknown costs and unlimited funding — a blank check.”

The nonpartisan Legislative Services Agency predicts 14,000 students will enroll in the program in its first year, with an estimated 4,800 transferring from a public to a private school. By fiscal year 2027, it predicts almost 41,700 students in the program, with a public school enrollment drop from about 486,400 to 475,207. The agency expects a net decrease of $46 million in funding due to enrollment changes, The Des Moines Register reported.

The agency said the cost to administer the program is unknown. The state of Iowa has not yet chosen a vendor to manage and distribute the funds. It has requested proposals from businesses with experience managing education savings account programs.

Iowa public schools serve more than 498,000 students. According to the Iowa Catholic Conference, the state’s Catholic schools serve about 30,000 students. There are more than 45,800 students in 237 private schools in Iowa, the Private School Review reported. The average private school tuition is $4,800 for elementary schools and $9,200 for high schools.

At the start of 2023, eight other states had passed education savings accounts legislation, the school choice advocacy group EdChoice said. Iowa and Utah have now joined their number. Similar legislation is under consideration in 19 other states, according to the educational freedom institute.