Iowa ESA Program

# Iowa's Universal Choice Experiment: A Comprehensive Analysis of the Students First Education Savings Account Program

The Architectural Blueprint of the Students First Act

Legislative Genesis and Enactment

On January 24, 2023, Governor Kim Reynolds signed into law House File 68, landmark legislation establishing Iowa's first Education Savings Account (ESA) program, officially branded as the "Students First Act".1 The bill's passage marked a pivotal moment in the state's education policy, positioning Iowa within a rapidly growing national movement toward universal school choice. The state became the 11th in the nation to enact an ESA-style program, following a policy blueprint largely pioneered in states like Arizona.4 The legislative process was notably swift, with the bill passing both chambers and receiving the governor's signature during National School Choice Week, just weeks after its introduction.3 This accelerated timeline, however, drew criticism from opponents who argued it limited thorough public debate and legislative scrutiny, particularly concerning the program's long-term administrative costs and accountability standards.6

The legal foundation for the program is primarily established in a new section of the Iowa Code, § 257.11B. The enabling legislation, House File 68, also made conforming amendments to several other sections of the code to integrate the ESA program into the state's broader education funding and administrative framework, including sections 256.9 (rulemaking authority), 257.10 (school funding formula adjustments), and 422.7 (state income tax provisions).8

The Three-Year Phased Rollout to Universal Eligibility

A defining feature of the Students First Act is its deliberate, three-year phased implementation designed to gradually expand eligibility until reaching universal status. This structure represents a significant strategic choice, shaping the program's initial demographic composition and political narrative.

• Year 1 (2023-24 School Year): In its inaugural year, eligibility was carefully circumscribed. It was open to all incoming kindergarten students and any student in grades 1-12 transferring from a public school. For students already enrolled in an accredited nonpublic school, participation was means-tested, limited to those from households with an annual income at or below 300% of the Federal Poverty Level (FPL), which was $83,250 for a family of four at the time.3
• Year 2 (2024-25 School Year): The program expanded access for existing private school families by raising the income eligibility threshold to 400% of the FPL, or approximately $124,800 for a family of four.2 All incoming kindergarteners and public school transfers remained eligible regardless of income.
• Year 3 (2025-26 School Year): The program is set to achieve full universal eligibility. Beginning in the fall of 2025, every K-12 student residing in Iowa will be eligible to receive an ESA, irrespective of their family's income or their previous school enrollment status.1

Beyond these phased criteria, all participating students must meet several core requirements to receive and retain ESA funds. They must be Iowa residents, be between the ages of 5 and 19 (a student must be at least 5 years old by September 15 of the school year), and must be enrolled in an Iowa-accredited nonpublic school.11 The statute explicitly excludes students in home-based education programs from eligibility.7

This phased-in model stands in contrast to the "universal leap" taken by Arizona in 2022, which opened eligibility to all students simultaneously.5 The Iowa approach appears to be a calculated legislative strategy. By initially restricting eligibility for the largest potential group of participants—existing private school students—to lower- and middle-income families, the policy was structured to preemptively counter the common criticism that universal choice programs function primarily as "handouts to the wealthy." This design ensured that the program's initial participant cohort was demonstrably of modest means, a fact later confirmed by independent analysis.4 This allowed the program to establish a narrative of equity and access in its formative years before expanding to serve all Iowans.

Administrative Framework: A Public-Private Partnership

To manage the operational complexities of the program, Iowa adopted a public-private partnership model. The Iowa Department of Education (DE) serves as the primary state-level administering agency, retaining ultimate responsibility for program oversight, policy interpretation, and the promulgation of administrative rules.1

However, the state contracted with a third-party financial services vendor, Odyssey, to manage the program's extensive day-to-day operations.1 Odyssey's responsibilities are comprehensive, encompassing the entire user-facing lifecycle of the program: processing parent applications, verifying eligibility, managing secure financial transactions, ensuring compliance with program rules, preventing fraud, and providing customer service.1 Parents interact with the program through Odyssey's secure online portal, where they can apply for the ESA, add students, and manage a digital account to approve payments for tuition and other qualified expenses directly to schools and vendors.1 This administrative model, which outsources the transactional mechanics to a specialized firm, reflects a key lesson from the evolution of ESA programs nationally, where states like Arizona initially faced significant administrative backlogs and challenges with in-house management.5

Table 1: Iowa ESA Program \- Core Architectural Features

Financial Architecture and the Flow of Funds

Funding Source and Mechanism

The Students First Act is financed through a standing, unlimited appropriation from the state's General Fund to a newly created, dedicated Education Savings Account (ESA) Fund.12 This funding mechanism is significant for two reasons. First, by establishing a "standing" appropriation, the legislature does not need to approve the program's budget each year; the funding is automatically allocated based on participation. Second, because the appropriation is "unlimited," the program's total cost is not constrained by a legislative cap and is designed to grow in direct proportion to the number of students who enroll. This structure ensures that funding is available for every eligible student who applies.

Award Calculation and Amount

The value of an individual student's ESA is statutorily pegged at 100% of the state's regular program "state cost per pupil" (SCPP) for a given fiscal year.1 This amount is recalculated annually based on legislative decisions regarding the state's education budget. The specific award amounts have been:

• $7,598 for the 2023-24 school year.3
• $7,826 for the 2024-25 school year.12
• $7,988 projected for the 2025-26 school year.1

While substantial, this amount represents only a fraction of the total per-pupil expenditure in Iowa's public schools. Independent analyses estimate that when state, local, and federal funds are combined, the total average cost to educate a student in the public system is over $15,000 annually.17 This significant gap between the ESA award and the total public school cost is a foundational element in the debate over the program's net fiscal impact.

Allowable Expenses and Fund Management

The legislation provides a clear framework for how ESA funds can be utilized, with a critical hierarchical structure. The law explicitly defines "qualified educational expenses" to include a range of goods and services.8 However, it mandates that funds must first be used to pay for tuition and fees at an accredited nonpublic school.4 This "tuition first" provision ensures the program's primary purpose is to support enrollment in private institutions.

Only after tuition and fee obligations are met for a given semester can any remaining funds be used for other approved expenses. These include textbooks, curriculum materials, private tutoring, educational therapies, fees for nationally standardized tests (such as AP exams or college entrance exams), and non-public online learning programs.4

Unused funds in a student's account can be rolled over from one year to the next, allowing families to save for future educational costs.4 However, in a notable departure from Arizona's program, which allows accumulated funds to be used for postsecondary education expenses 5, Iowa's law requires that any balance remaining in an account must be returned to the state's General Fund once the student graduates from high school or turns 20 years old, whichever comes first.16

Categorical Funding for Public Schools

A unique and politically significant feature of the Students First Act is a provision that directs a portion of state aid back to public school districts. For each student residing within a district's boundaries who uses an ESA to attend a private school, the public school district receives that student's share of several state categorical funding streams, including supplements for teacher salaries, professional development, and early intervention.2 This amounts to an average of approximately $1,205 per ESA pupil that flows back to the resident public district.6

This mechanism can be understood as a financial and political compromise. The primary fiscal effect of an ESA program on a public district is the loss of enrollment-based funding when a student departs. By allocating a smaller, secondary stream of categorical funding back to the district, the legislation was designed to soften this financial blow. This provision likely served to mitigate opposition from public school advocates by ensuring that districts were not entirely divested of state support for students they no longer directly educate. However, the intended effect of this "softener" has been complicated by subsequent legislative actions. In 2024, the state enacted new minimum teacher salary requirements, and critics argue that the law inadvertently repurposed the categorical funds intended for districts as an ESA offset to help meet these new statewide salary mandates, thereby diluting the intended financial benefit for local districts.6

Enrollment Dynamics: From Phased Rollout to Universal Access

Rapid Program Adoption and Growth

Since its launch in the 2023-24 school year, Iowa's ESA program has experienced exceptionally rapid adoption, demonstrating a significant latent demand for private educational alternatives across the state.

• In its inaugural year (2023-24), with eligibility limited by income for existing private school students, the program enrolled 16,757 students.1
• In its second year (2024-25), as the income cap was raised, participation surged by more than 60%, reaching 27,866 students.12

This pattern of explosive initial growth followed by a moderating pace is characteristic of new market adoption, often described as an "S-curve." As seen in Arizona following its universal expansion, the initial surge is driven by the program rapidly absorbing a pre-existing population of families who were already inclined toward private education but may have faced financial barriers.5 With the program set to become fully universal in 2025-26, further growth is anticipated, though the rate of increase may slow as the market approaches saturation.

Participant Composition in the Initial Years

A detailed breakdown of the participant pool in the program's first two years provides the essential factual basis for understanding the contentious debate over its function and fiscal impact.

In the 2023-24 school year, the 16,757 participants were composed of three distinct groups:

• 2,135 students (12.7%) who transferred directly from an Iowa public school.24
• 3,513 students (21.0%) who were entering kindergarten for the first time.24
• Approximately 11,109 students (\~66%) who were already enrolled in a private school and met the 300% FPL income requirement to become eligible for an ESA.4

In the 2024-25 school year, the composition of the 27,866 participants was:

• 1,905 students (6.8%) who had attended a public school in the prior year.25
• 3,960 students (14.2%) who were new kindergarteners.25
• The remainder consisted of returning ESA participants from the prior year and new participants from private schools who became eligible under the expanded 400% FPL income cap.

Impact on School Enrollment Trends

The rapid uptake of the ESA program has had a clear and measurable impact on statewide K-12 enrollment patterns. While Iowa's public school enrollment was already on a slight downward trajectory due to demographic trends, data shows that the implementation of the ESA program has accelerated this decline.4 Public school enrollment dropped by 0.57% in the first year of the program and by another 0.63% in the second.24

Conversely, enrollment in Iowa's accredited nonpublic schools has surged. Private school enrollment grew by 7.4% in 2023-24 and by nearly 9% in 2024-25, reaching a total of 39,356 students.24 Independent analysis concludes that this growth is almost entirely attributable to the new funding made available by the ESA program.4 The program is also stimulating the supply side of the educational marketplace, with a record 24 new accredited nonpublic schools opening for the 2024-25 school year, a dramatic increase from previous years.4

Table 2: Enrollment Growth and Participant Composition (FY2024-FY2025)

Note: "Number from Private School" for FY2025 includes both returning ESA students and new participants from private schools.

The Switcher Rate: Deconstructing the Program's Core Metric

The Centrality of the "Switcher Rate"

At the heart of every major debate surrounding the Iowa ESA program—its purpose, its equity, and most importantly, its cost—lies a single, fiercely contested metric: the "switcher rate." This rate is defined as the percentage of ESA participants who would have otherwise enrolled in a public school. The determination of this figure is the fulcrum on which the entire fiscal analysis rests. A high switcher rate implies the program is primarily moving students out of the public system, generating significant cost savings for the state. A low switcher rate suggests the program is largely a new subsidy for students who were never in the public system to begin with, representing a massive new cost. The vast discrepancy between competing analyses of the switcher rate is not a matter of simple arithmetic error; it is the result of a fundamental disagreement over methodology and definition.

Model 1: The Official State Definition (A Narrow, Empirical View)

The Iowa Department of Education, in its official public reporting, utilizes a narrow and strictly empirical definition of a switcher. It counts only those ESA participants who were enrolled in an Iowa public school in the immediately preceding school year.24 This methodology produces a relatively low switcher rate:

• 12.7% for the 2023-24 school year.24
• 6.8% for the 2024-25 school year.25

These official figures are frequently cited by program critics. They form the basis for the argument that the program is not primarily a tool for expanding choice and enabling an exit from the public system, but is instead an overwhelming subsidy for the 66% of initial participants who were already attending private schools.28 From this perspective, the program's main function is to use public funds to pay for private decisions that had already been made.

Model 2: The Independent Analyst Definition (An Expansive, Contextual View)

A competing model, advanced by pro-school choice organizations like EdChoice, argues that the official state definition is "incomplete and lack\[s\] context" and therefore dramatically understates the true switcher rate.29 This model employs a broader, more theoretical methodology to re-categorize participants based on a more expansive definition of what constitutes a "switcher."

The logic of this model unfolds in several steps:

1. It begins with the empirically verified number of public school transfers reported by the state (e.g., 2,135 in Year 1).

2. It then makes the reasonable assumption that a very high percentage of new kindergarten participants (e.g., 90% of the 3,513 in Year 1\) should also be classified as switchers. The rationale is that, absent the ESA, the vast majority of these students would have enrolled in free public kindergarten.29

3. Most critically, this model incorporates the context of Iowa's broader school choice ecosystem, specifically the state's long-standing, means-tested School Tuition Organization (STO) tax-credit scholarship program. The analysis posits that a significant number of the students categorized by the state as "existing private school students" were only able to afford private school in the first place because they were receiving STO aid. These students, the argument goes, are fundamentally "switchers" from the public system who simply made the switch at an earlier time, facilitated by a different state program. When they move from an STO scholarship to an ESA, their status as a student who would otherwise be in a public school remains unchanged. This analytical framework—viewing the entire ecosystem of choice programs rather than one in isolation—is identical to the methodological critique leveled against certain analyses of Arizona's ESA program.5

By systematically re-categorizing these groups, the independent analyst model arrives at a dramatically different conclusion, estimating the "true" switcher rate to be approximately 70%.29

The existence of two data-driven models with such divergent results reveals that the "switcher rate" is not an objective fact but a methodological construct. The debate is not about the raw numbers of participants from different backgrounds, which are largely agreed upon. Instead, it is a philosophical debate about the question, "What is a switcher?" Is it only a student who left a public school last year? Or is it any student who would be in a public school today but for the existence of any state-supported private school choice program? A comprehensive understanding requires acknowledging that the answer depends entirely on which definition one accepts.

Table 3: Competing "Switcher Rate" Methodologies and Results (FY 2024 Data)

Note: Model 2's categorization of "From Private School" is complex, assuming a high percentage of those who previously used STO scholarships are also switchers.

The Participant Profile: A Contested Demographic Landscape

The Data Vacuum

A comprehensive analysis of who uses and benefits from the Iowa ESA program is hampered by a significant data vacuum. Similar to the policy in Arizona, the Iowa Department of Education does not officially collect or publicly report detailed demographic data on ESA participants, including household income, race, or ethnicity.5 This absence of official data creates an environment where the program's demographic profile must be estimated through independent analysis, leading to differing interpretations and narratives.

Income Profile

The most detailed analysis of participant income to date comes from the Common Sense Institute Iowa (CSI). Their research focused on the program's inaugural year (2023-24), when existing private school students were subject to a 300% FPL income cap. The study found that this specific cohort of ESA families—those with children already enrolled in nonpublic schools—had an average household income of $62,200. This figure is notable because it is 23% below the median household income in Iowa at the time.4

This finding is a direct and predictable consequence of the program's phased-in legislative design. By initially targeting lower- and middle-income families among the existing private school population, the law ensured that the program's early adopters were not the state's wealthiest residents. This challenges the narrative that the program primarily benefits affluent families. The Brookings Institution, in a cross-state analysis, offers a slightly different framing. It categorizes Iowa's program as one that "prevent\[s\] only the highest-income families from obtaining funds" and notes that, like other such programs, it still tends to benefit wealthier communities more than the poorest, though less so than programs with no income restrictions at all.33 As the program transitions to full universal eligibility in 2025-26, its income profile is expected to shift, making ongoing independent analysis critical.

Geographic Distribution

The ESA program has demonstrated broad geographic appeal, extending far beyond the state's major metropolitan centers. In its first year of operation, approved applicants resided in 96 of Iowa's 99 counties.34 This wide distribution indicates that demand for educational choice is a statewide phenomenon.

Particularly noteworthy is the fact that students from 42 counties that have no accredited private schools within their borders are participating in the program.34 This suggests that a meaningful number of rural families are willing to travel significant distances to access a school of their choice once financial barriers are lowered. As expected, the raw number of participants is highest in the most populous counties that also have the largest concentration of private schools, such as Polk (Des Moines), Linn (Cedar Rapids), Scott (Davenport), and Sioux counties.34

Racial and Ethnic Diversity

While official, program-wide data on race and ethnicity is unavailable, proxy data from a major sector of private education provides valuable clues. The Catholic school system, which enrolls a significant portion of ESA recipients, reported notable increases in student diversity following the program's implementation.19 For the 2024-25 school year, Iowa's Catholic schools saw increases in the enrollment of:

• Students eligible for free-and-reduced-price lunch (+4.5%)
• Non-White students (+4.6%)
• English Learners (+28%)

This suggests that the ESA program is facilitating access to private education for a more diverse student body. However, this demographic shift cannot be attributed to the ESA program in isolation. Iowa's long-standing STO tax-credit scholarship program is explicitly means-tested and has historically served as the primary vehicle for lower-income and diverse families to access private schools.19 The observed increase in diversity is likely a combined effect of both programs working in tandem. The STO continues to target and support the state's most financially needy families, while the ESA program has made private school a more viable option for a broader range of working- and middle-class families who may not have qualified for STO aid but still found tuition to be a barrier. This underscores the necessity of analyzing the entire school choice ecosystem to gain an accurate understanding of its demographic impact.

The Fiscal Impact: A Billion-Dollar Debate

The debate over the net fiscal impact of the Students First Act is the most polarized aspect of the program, with competing analytical models arriving at conclusions that are hundreds of millions of dollars apart. This discrepancy is not due to mathematical error but is a direct function of the fundamentally different assumptions each model makes about the program's "switcher rate."

Model 1: The Deficit-Driver Model (Official State Projection)

The initial fiscal analysis produced by the state's non-partisan Legislative Services Agency (LSA) projected that the ESA program would result in a significant and growing net cost to the state's General Fund. The LSA's fiscal note estimated this net cost would rise from an initial $106.9 million in FY 2024 to $344.9 million by FY 2026.18

The methodology underpinning this projection is built on the core assumption of a very low switcher rate. The LSA model assumed that only 1% of public school students would transfer to private schools in the first year, and just 0.02% in subsequent years.18 As a consequence of this assumption, the model treats nearly all ESA expenditures as entirely new costs to the state—payments for students who were already in private schools and whom the state was not previously funding. The minimal savings generated from the small number of assumed switchers leaving the public system are dwarfed by this large new expenditure, inevitably leading to the conclusion that the program is a major driver of new state spending.

Model 2: The Net Savings Model (Independent Proponent Analysis)

A diametrically opposed conclusion is reached by analyses from organizations like EdChoice and the Cato Institute, which project that the ESA program will generate a significant net savings for Iowa taxpayers over the long term.17

This model is the mathematical inverse of the LSA's, built upon the core assumption of a very high switcher rate of approximately 70%, as derived from the more expansive definition detailed in Section IV. The methodology calculates the fiscal impact as follows:

1. It first determines the gross program cost for a given cohort of students. For the 16,757 students in the first year, this was $124.2 million.17

2. It then calculates the total savings generated by the large number of assumed "switchers" (approximately 11,730 students in the first cohort) leaving the more expensive public school system. The savings per switcher is the difference between the total per-pupil cost in public schools (estimated at $15,283) and the lower ESA award amount ($7,413 in Year 1).17

3. In this model, the massive savings generated by the high number of switchers (estimated at $179.3 million in the long run for the first cohort) more than offsets the new costs associated with non-switchers.

The result is a projected net savings of $55.0 million annually from the program's first-year cohort alone.17

The chasm between these two fiscal projections—from a $345 million annual cost to a $55 million annual savings—is entirely attributable to the initial assumption about the switcher rate. Any claim about the program's net fiscal impact is, therefore, fundamentally an argument about which switcher rate methodology is more valid. The role of an objective analysis is not to declare a winner in this debate, but to make the mechanics of the disagreement transparent.

Table 4: The Dueling Fiscal Impact Models (FY2024 Cohort, Long-Run Estimates)

Note: Figures are based on projections and estimates from the respective sources and are intended to illustrate the mechanics of the models.

Administration, Accountability, and Market Response

Oversight and Accountability Framework

Contrary to some public criticism, the Students First Act established a multi-layered accountability framework designed to ensure the proper use of public funds, managed through the partnership between the Iowa Department of Education and the third-party administrator, Odyssey.16 Key oversight mechanisms include:

• School Accreditation: A foundational requirement is that only accredited nonpublic schools are eligible to participate and receive ESA funds. This provides a baseline assurance of educational standards and explicitly excludes unaccredited programs and home-based education.1
• Annual Application and Verification: Families are required to reapply for the program each year. This annual process allows the state to re-verify Iowa residency and, during the phase-in period, income eligibility.1
• Secure Payment System: Funds are not disbursed directly to parents in cash. Instead, they are held in a secure digital account managed by Odyssey. Payments are made directly to schools only after a school submits an invoice for tuition and fees and the parent logs into the portal to personally approve the transaction.16
• Strict Deadlines: To receive and retain funds, a student must be enrolled in an accredited school and have their tuition paid through the portal by specific deadlines each semester. Failure to meet these deadlines results in the student becoming ineligible and the funds being returned to the state.11
• Fraud Prevention and Penalties: The third-party administrator is contractually obligated to implement systems to detect and prevent fraud. The law includes stringent penalties for misuse: parents found to have committed fraud can be forced to repay the funds and are permanently barred from future participation in the program.16
• Auditing Authority: As a state agency managing public funds, the Iowa Department of Education is subject to audits by the Iowa State Auditor's Office, which has the authority to examine the ESA program's finances and compliance with state law.16

The State Auditor Controversy

Despite this formal accountability structure, the program has been the subject of intense political conflict, most notably with the Iowa State Auditor. The Auditor has been a vocal critic, publicly stating that "vouchers are a path to ending public education" and claiming the program lacks sufficient internal controls and has "0 rules".37 These assertions have been forcefully rebutted by the Governor's office and the Department of Education, which have characterized the Auditor's claims as "completely unfounded and without merit" and politically motivated by his opposition to the policy itself.37 This ongoing dispute highlights how debates over administrative oversight can become a proxy for the larger ideological battle over school choice.

Market Response: Tuition Inflation

Beyond the political sphere, the ESA program's implementation has produced a significant and measurable economic effect on the private school market. A causal analysis conducted by researchers at Princeton University found strong evidence that the influx of public subsidy from the ESA program led private schools in Iowa to increase their tuition rates.28

The study's methodology leveraged the program's phased-in design. It found that tuition increased most dramatically in kindergarten, where eligibility was universal from the program's inception, with prices rising between 21% and 25%. In grades 1-12, where eligibility was initially restricted by income, the tuition increases were more moderate, ranging from 10% to 16%. In contrast, pre-kindergarten programs, which were not eligible for ESAs, saw no corresponding tuition increase.38 This differential effect strongly suggests that the ESA program was the causal factor behind the price hikes.

This finding reveals a critical, and likely unintended, consequence of the program. While the stated purpose of ESAs is to reduce the cost burden of private school for families, this evidence indicates that a significant portion of the public subsidy is being captured by the private schools themselves in the form of higher tuition revenue. This complicates the narrative of the program's efficiency and raises important policy questions about who the ultimate financial beneficiary of the subsidy is—the family seeking to save money, or the institution seeking to increase revenue.

Concluding Analysis and Forward-Looking Implications

Synthesis of Findings

Iowa's Students First Education Savings Account program represents a significant and rapidly executed shift in the state's K-12 education landscape. The program's design and implementation provide a rich case study with profound lessons for policymakers in Iowa and across the nation. The analysis reveals several key findings:

• Rapid Adoption and Market Impact: The program experienced explosive growth in its first two years, demonstrating a substantial pre-existing demand for educational alternatives. This influx of publicly funded students has reshaped enrollment patterns, accelerating a decline in public school numbers while fueling significant growth in private school attendance and even stimulating the creation of new private schools.
• The Centrality of Methodology: The most contentious debates surrounding the program—whether it functions as an "exit ramp" or a "subsidy," and whether it creates a net cost or a net savings for the state—are not factual disputes. They are methodological conflicts. The program's true function and fiscal impact are entirely dependent on the definition of a "switcher." A narrow, empirical definition yields a low switcher rate and a high net cost; a broad, contextual definition that includes the state's entire choice ecosystem yields a high switcher rate and a significant net savings.
• Strategic Legislative Design: The three-year phased rollout, which initially limited eligibility for existing private school students based on income, was a sophisticated legislative strategy. It successfully shaped the program's initial demographic profile to be demonstrably lower- and middle-income, thereby preempting and neutralizing one of the most common and potent criticisms leveled against universal choice programs.
• Unintended Market Consequences: Despite a robust administrative framework designed to ensure accountability, the program has produced a clear market response in the form of private school tuition inflation. This indicates that a portion of the public subsidy is being captured by institutions, complicating the program's effectiveness as a pure cost-relief measure for families.

Forward-Looking Implications for Iowa

As the ESA program becomes fully universal in the 2025-26 school year, several key questions will shape its future. The primary issue will be how the participant demographic profile evolves. With income restrictions removed, it will be critical to monitor whether the program's user base shifts toward more affluent families, or if the continued presence of the means-tested STO program will maintain a segmented market where different programs serve different socioeconomic strata. Furthermore, Iowa policymakers must now grapple with the clear evidence of tuition inflation. They face the challenge of determining whether legislative or administrative guardrails are necessary to ensure that public funds primarily translate into savings for families rather than increased revenue for private institutions.

Lessons for a National Audience

Iowa's experience offers several critical lessons for other states considering or implementing large-scale ESA programs:

1. Methodology is Policy: The Iowa case is a masterclass in how methodological choices in program evaluation have profound policy and political implications. Any state enacting an ESA must anticipate that the "switcher rate" will be the central point of fiscal conflict and should proactively establish a clear, transparent, and defensible definition.

2. The Power of the Phased Rollout: For states seeking to build broad and durable political support for school choice, Iowa's phased-in, income-limited rollout provides a powerful strategic model for mitigating initial critiques of inequity.

3. Analyze the Full Ecosystem: A program's true impact cannot be understood in a vacuum. In states with multiple school choice mechanisms, such as Iowa's ESAs and STO tax-credit scholarships, fiscal and demographic analyses must consider the entire ecosystem. Evaluating one program in isolation will inevitably produce a skewed and incomplete picture.

4. Anticipate Market Responses: The injection of a significant public subsidy into a private market will have economic consequences. As Iowa's experience with tuition inflation demonstrates, policymakers must anticipate these market responses and consider their implications for the program's ultimate goals and efficiency.

Ultimately, Iowa's journey with the Students First Act underscores that the success of a large-scale school choice program depends not only on its legislative design and public demand but also on a commitment to rigorous, context-aware analysis and an honest accounting of both its intended and unintended consequences.

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