An Education Savings Account (ESA) is a state-funded account that allows parents to withdraw their children from public schools and receive a deposit of public funds to use for a wide variety of private educational services. These can include private school tuition, tutoring, online curriculum, therapies, and other approved expenses.
What is an Education Savings Account (ESA) and how does it work?
Think of an ESA as a parent-directed savings account for your child's K-12 education. Instead of the state sending education funds directly to your local public school, it deposits a portion of that money into a government-authorized, restricted-use account that you control. This empowers you to customize your child's education by purchasing services and products from a diverse marketplace of approved providers. This "unbundling" of educational services is the core principle of the ESA model, shifting the focus from "school choice" to the broader, more flexible idea of "educational choice."
How are ESAs different from school vouchers?
While both are forms of private school choice, the key difference is flexibility.
- School Vouchers are typically restricted to paying for tuition at a private school. The funds are usually paid directly to the school.
- Education Savings Accounts (ESAs) offer a much broader range of approved uses. Parents can use the funds not just for tuition, but also for tutoring, online courses, curriculum, educational therapies, testing fees, and more. This allows for a highly customized, multi-provider approach to education.
Who is eligible for an ESA?
Eligibility varies significantly from state to state and is the primary distinction between different types of ESA programs:
- Universal Programs: In states like Arizona, Florida, and Iowa, all K-12 students are eligible for an ESA, regardless of income or disability status.
- Targeted Programs: In other states, ESAs are targeted to specific student populations, such as students with disabilities (e.g., Mississippi, Indiana), students from low-income families, or those assigned to low-performing public schools.
You can see a full breakdown of each state's eligibility rules on our State-by-State Comparison Chart.
What can ESA funds be used for?
The list of "qualified educational expenses" is defined by each state's law but is typically broad. Common allowable expenses include:
- Private school tuition and fees
- Online learning programs and courses
- Textbooks and curriculum
- Private tutoring services
- Educational therapies (e.g., speech, occupational, behavioral)
- Fees for standardized tests (e.g., AP exams, SAT/ACT)
- Educational technology and software
- Transportation to educational providers
Are ESAs the same as 529 Plans or Coverdell ESAs?
No, this is a common and important point of confusion.
- State-Funded K-12 ESAs (the subject of this website) are publicly-funded accounts for current K-12 expenses. The money comes from the state.
- 529 Plans and Coverdell ESAs are tax-advantaged private savings accounts that *you* fund with your *own* money to save for future education expenses, primarily college. They are personal investment tools, not state-funded scholarship programs.