Iowa OKs 18,600 private school education savings accounts

More than 18,600 Iowa students have been approved for an education savings account to pay for private school tuition and expenses, the Iowa Department of Education announced Monday.

The numbers exceed state projections that expected around 14,000 students would be approved for the accounts during the program’s first year. Those original projections expected the program would cost $107.4 million in its first year, and $345 million by the fourth year.

Lawmakers set no budget cap on the program, so each approved application will be funded, regardless of cost.

The program, which provides a student’s full per-pupil state allocation — around $7,600 — to families to pay for private school tuition, was the top legislative priority of Republican Iowa Gov. Kim Reynolds this session, and the first bill she signed into law in January.

Ninety-six of Iowa’s 99 counties have at least one student receiving state funding for private school. No education savings accounts went to Decatur, Louisa and Ringgold counties.

The state’s most populous counties also largely received the highest number of approved applications. The top 10 counties are as follows:

Less than 1,000 applications are still being manually reviewed, the department said.

More than 29,000 students had applied for the accounts before the application window closed June 30, according to Reynolds' office.

Reynolds championed the policy as a way to expand education opportunities for Iowa students, regardless of their family’s income, and allow families to find the educational settings that work best for them.

“The tremendous response from Iowa families demonstrates there’s both a need and a strong desire for school choice in our state,” Reynolds said after the application window closed in July. “Allowing parents to choose the education that’s best for their children levels the playing field and creates equal opportunities for Iowa’s students.”

The bill passed with only Republican support in the Legislature. Democrats and public education advocates argued the law will siphon money from already struggling public schools and direct it to unaccountable private institutions serving a small minority of the state’s students.

Around 486,500 students attended public K-12 schools in Iowa during the 2022-2023 school year, while private schools educated around 33,700 students.

Nearly half of Iowa’s 99 counties — 42 — do not have a private school within their borders.

"Governor Reynolds gave the special interests and private schools a huge bonus today,” Rep. Sharon Steckman, D-Mason City and ranking member of the House Education Committee, said in a statement. “It’s just the first installment of her promise to shift over $1 billion of our tax dollars from public schools to private schools instead.”

The result being that 90 percent of Iowa students who attend public schools will have fewer opportunities, Steckman said.

“(A)nd it’s even worse for those public school kids in rural areas,” she added. “Iowans are overwhelmingly opposed to vouchers because public money is for public schools, and Iowans do not want more of their public schools to close. It’s time for the Governor and Republican politicians to stop playing politics with our kids and start doing what’s best for Iowans.”

Sen. Herman Quirmbach, D-Ames, ranking member of the Senate Education Committee, in a statement said Monday’s numbers show Iowa’s urban counties will largely benefit.

“Out of Iowa's 99 counties, the top 10 counties get over 60 percent of the money if all the approved voucher students actually enroll,” Quirmbach said. “ … Altogether the top 10 counties stand to get over $85 million, while the bottom 10 get less than $100,000 combined — and three get nothing at all. Meanwhile every public school in Iowa has lost money because state Republicans have failed to keep funding up with inflation over the last six years.”

“A voucher program that would initially cost Iowans almost a billion dollars over the next three years will cost even more, benefiting only a select few,” Mike Beranek, president of the Iowa State Education Association, the state’s largest teachers union, said in a statement. “Iowans overwhelmingly support investments in our public schools. Ninety percent of Iowa families continue to choose their neighborhood public schools. That is where our precious resources should be directed.”

Representatives for House Speaker Pat Grassley, R-New Hartford, and Senate Majority Leader Jack Whitver, R-Grimes, did not immediately respond to requests for comment Monday evening.

Public schools will receive $1,205 in state money for every student within the district’s boundaries that receives an education savings account, but they will not receive the $7,600 they otherwise would if the students attended the public school.

Majority of approved students attend private school

Not all students with approved accounts may be able to enroll in a private school for the coming year, as there are limited slots at private schools in the state. The governor’s office said last month there are around 9,000 open seats at Iowa’s accredited private schools.

At a board of education meeting last week, Iowa Department of Education officials said they expected around 60 percent of approved applications to be from students already attending private schools, and 40 percent to be from public school students.

During the program’s first year, the savings accounts are open to all public school students, as well as private school students in families that make up to 300 percent of the federal poverty line — around $90,000 for a family of four.

During the 2024-25 school year, the income limit will increase to 400 percent of the federal poverty level.

By the third year of the program, it will be open to all public and private school students, regardless of income.

Accounts will be billed by school

Families with a student who attends a private school with an education savings account will receive an invoice from their child’s school through their account, the Department of Education release said. Once approved, the funds are transferred from the account to the school.

Funds also can be used on a range of education expenses, including textbooks, computers, software and tutoring sessions. Those expenses can only be made after tuition is paid, and must be made on a marketplace run by Odyssey, the New York company administering the program.

If a student does not attend a private school during the upcoming school year, the funds will remain with the state and return to the general fund, the department said.

The final number of approved applicants and more details about participation will be available later this fall after enrollment numbers are finalized.

Tom Barton of The Gazette Des Moines Bureau contributed to this report.