Education Savings Account (ESA) application process now underway, 168 approved in Winneshiek County

By Roz Weis,

The Iowa Department of Education recently announced 18,627 Students First Education Savings Accounts (ESAs) have been approved as of Aug 4. Winneshiek County totals indicate 168 approved applications to date.

According to the website of Iowa Governor Kim Reynolds, this year, ESAs will be funded with up to $7,635—the same amount appropriated by the state to support the education of each public-school student during the 2023-2024 academic year. The funds must first be used to pay tuition and fees; with remaining balances are to be used to cover other “approved” educational expenses or held for subsequent school years.

The new law called for a continued investment of $1,200 per student to the public school districts where students reside; however, Decorah Community School District Superintendent Tim Cronin said that allotment to the district begins next year, based on student counts taken in October 2023.

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Non-public schools

The current 2023-24 Department of Education current listing of Winneshiek County non-public schools includes the following: St. Benedict Catholic School in Decorah; St. Teresa of Calcutta in Ossian and St. Teresa of Calcutta in Spillville. The Allamakee County non-public school is St. Patrick School in Waukon; and the Howard County non-public schools are Notre Dame Elementary School in Cresco and Trinity Catholic School in Protivin.

The St. Benedict Elementary School website lists tuition at $2,950 for the 2023-24 academic year; and the tuition at the St. Teresa of Calcutta Schools of Ossian and Spillville is listed on the school’s website as $3,800 per child for the 2023-24 school year.

Eligibility for families of children currently enrolled in accredited private schools will be income-based over the first two years. During the 2023-2024 school year, private school students with household incomes at or below 300% of the federal poverty level (FPL), currently $83,250 for a family of four, are eligible.

This year’s application window closed June 30.

ESA funds remain in the state’s possession until a student’s parent or guardian approves payment to the school. Approved ESA accounts may be funded as soon as July 15. The first payment from an ESA must be used for tuition and fees to an Iowa accredited private school.

The state is paying a New York-based company called Odyssey to operate the new ESA assistance program, including applications, financial transactions, compliance, fraud prevention and customer service. Four companies applied for the contract with the state. The company will be paid $4.3 million over the first six years, according to the terms of the contract with the state. Odyssey has similar programs in Arizona and Idaho. 

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Families in the Driftless region and across the state were encouraged to view a series of webinars on the Odyssey platform about the new program when the application process began earlier this summer.

Over budget

The Iowa Legislative Services Agency originally estimated 14,000 students would apply for the 2023-24 school year and planned to spend around $107.4 million on the initiative. However, as 18,000-plus applications were accepted, it is estimated that the State could be more than $30 million over budget after calculations are projected on the actual numbers.

More than 3,000 applications came from Polk County alone, totaling nearly $24 million for Iowa’s most populous county. 

Area totals included Winneshiek County with 168 approved applications; nearby Allamakee County with 113 approved applications; and Howard County’s with a total of 87 applicants. Other area county applications totals include: Clayton, 25; Chickasaw, 46; and Fayette, 37.

Eligibility is as outlined on the Iowa Department of Education website:

Year 1: School 2023-24

• All entering kindergarten students

• All students enrolled in a public school who are switching out of public school in grades 1-12 or entering kindergarten.

• A student enrolled in an accredited nonpublic school with a household income at or below 300% of the 2023 Federal Poverty Guidelines

Year 2: School Year 2024-25

• All entering kindergarten students

• All students enrolled in a public school who switch out of public schools in grades 1-12

• A student enrolled in an accredited nonpublic school with a household income at or below 400% of the 2024 Federal Poverty Guidelines that will be updated January 2024

Year 3: School Year 2025-26

• All K-12 students in Iowa regardless of income

Review process

Less than 1,000 applications remain in review in the state, while parents or guardians provide additional information or documentation to confirm eligibility. 

Parents who choose to enroll their eligible children in an accredited nonpublic school will receive an amount equal to the per pupil funding allocated to public school districts for the same budget school year. Funds will be deposited into an education savings account (ESA) to be used for tuition, fees, and other qualified education expenses as specified in the legislation. When parents or guardians approve the payment, funds are transferred from the ESA account to the school to pay tuition and fees. The ESA funds remain in the state’s possession until approved for payment to the school. 

In addition to applying and being approved for an ESA, families must separately apply to the accredited private school of their choice and, if accepted, their ESA account will be funded.

ESAs can be used for online non-public schools, but those schools must be accredited through the Iowa Department of Education and the student must be enrolled full time.

Students have been approved for ESAs in 96 of Iowa’s 99 counties. Iowa’s most populous counties primarily account for the highest number of approved student applications. Also as of Aug. 4, the top 10 counties include: Polk, with 3,144 applications; Linn, 1,318; Scott, 1,306; Sioux, 1,183; Black Hawk, 942; Woodbury, 916; Dubuque, 882; Johnson, 572; Dallas, 505; and Carroll, 427.

If an approved ESA student does not attend an accredited non-public school by Sept. 30, the ESA account will be closed for the school year. The funds remain with the state and are returned to the general fund.

The application process must be completed annually.

Additional information regarding the final number of approved applicants will be available after Sept. 30. Details about ESA program participants will be available when certified school enrollment numbers are finalized later this fall.

Among the local and statewide concerns expressed over the new ESA program are the impact on Iowa public schools due to the loss of funding, the lack of transparency on how funding is used, and the concern that private schools do not have to accept all students, including those with disabilities. 

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