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.
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.