New study of education funding determines an unprecedented amount of public money is now available for private school tuition

A stock image of students in a lecture hall.

A new report from the Georgetown University education think tank FutureEd notes that 569,000 K-12 students received public subsidies for private schooling in 2023-24 across eight states with universal school choice programs.

According to the report, states such as Arizona, Arkansas, Florida, Iowa, Indiana, Ohio, Oklahoma, and West Virginia typically use three primary methods to subsidize private-school tuition and related costs. Those methods include vouchers, which provide parents with some portion of their child’s state education funding in the form of a “coupon” to pay for tuition at a private school, education savings accounts (ESAs) that allow parents to withdraw state funds deposited into individual accounts to pay for private school tuition and other education expenses, and tax-credit scholarships that give tax credits for donations to nonprofit organizations that provide private school scholarships.

In addition, the report said, Oklahoma employs a fourth approach: a refundable tax credit that allows parents to receive state income tax refunds regardless of whether they owe state taxes, similar to vouchers or ESAs. Florida also operates a tax-credit scholarship ESA as part of its universal program, which the report said “mirrors traditional ESAs but is funded through tax credits received by donating to nonprofit organizations managing the accounts.”

“Never in the history of American public education has so much money been available to parents to pay for private school tuition or homeschool expenses. And universal private school choice appears set to expand further,” the report said. “Enrollment continues to increase where programs are offered, and states including Texas and Mississippi have universal private school proposals on the legislative docket. Advocacy organizations continue to push expansion aggressively.”

However, the report said, programs such as these have been a point of contention in the states where they’ve been proposed, such as in Tennessee, where Gov. Bill Lee proposed a statewide taxpayer-funded school voucher program. The proposed program would allow any student to attend a private school of their choice using state funded scholarship dollars, regardless of family income or location.

Opponents of the Governor’s Education Freedom Scholarship plan say vouchers divert funding away from public schools that are already considered underfunded.

The proposal failed to advance out of committee last legislative session and Governor Lee has promised to bring it back next year. Lee has said previously that the Education Freedom Scholarships program would be funded separately from Tennessee’s education funding formula. But opponents say public schools could still lose funds based on enrollment if and when students leave to attend private schools.   

The state currently offers vouchers through its Education Savings Accounts program, which was launched in the 2022-23 school year, following legal challenges to its passage in 2019. The vouchers are available to students in Shelby County Schools, Hamilton County Schools, Metro Nashville Public Schools and schools in the Achievement School District.

According to the FutureEd report, school choice programs across the country in general seem to vary “significantly” in their design. It noted that some states help families navigate their options by providing information about the performance of private schools, while others are “more hands-off.”

The report said that some states impose budget or enrollment caps, prioritize funding based on need, or provide more dollars to lower-income families; while others, like Florida and Arizona, fund all applicants irrespective of family means, without caps on the number of participating students or the amount awarded. In addition, some states track student performance under the programs, while others do not.

“These policy differences have important consequences for state spending, school quality, student learning, educational equity, and taxpayer protections, we found,” the report noted.

“Our portrait of the universal private school choice movement in 2023-24 suggests that it’s likely to present state policymakers with difficult decisions about the size and shape of the new choice plans—given their emerging impact on state budgets, public school funding and enrollments, longstanding efforts to strengthen educational opportunities for low-income students, and even the sustainability of public charter schools.”

The report added that it’s still “too early in the evolution of the universal choice plans to know if the number of private schools would expand in the event of demand outstripping the current supply of private schools.”

Despite this, the report noted that support for private school choice continues to build. In North Carolina, lawmakers recently approved an additional $248 million to fund the 55,000 students on the state’s universal voucher waitlist. Alabama and Louisiana will soon roll out applications for ESA programs set to launch in 2025-26 as well. In addition, universal private school choice bills that failed in Texas, Tennessee, and Mississippi in 2024 are expected to be reintroduced next year, while ESA legislation will likely be introduced in Idaho for the first time.

“How state leaders design these programs will have a powerful effect on which students participate in them, whether students benefit from the programs, the nature of the benefits, and the consequences for state budgets,” the report said.