School-choice policies are sweeping the nation, offering parents—many fed up with the status quo—the chance to choose the learning environments that work best for their children. Since the Covid-19 pandemic, the number of states with education savings accounts (ESAs) or similar options has gone from five to 19, and more could soon follow. If Texas, as expected, adopts universal ESAs in 2025, more than half of K–12 students nationwide will be eligible for these and other private school-choice programs.
ESAs let families use a portion of the public funds allocated for their children’s education to cover expenses such as private school tuition, tutoring, textbooks, homeschool curricula, special-needs therapies, and more. In eight states, every K–12 student now has, or will shortly have, access to an ESA.
Arizona, however—the first state to enact an ESA plan, in 2011—offers a cautionary tale. What began as a highly popular, smoothly run initiative has deteriorated into administrative chaos. As lawmakers in other states consider adopting or expanding ESA policies, Arizona’s experience underscores the importance of effective implementation and the dangers of bureaucratic overreach.
Arizona initially reserved its ESA plan for students with special needs. Families overwhelmingly approved of the program, through which they could access resources that public schools often lacked. By 2022, lawmakers had expanded the plan to all K–12 students, with then-Governor Doug Ducey’s enthusiastic backing. Today, more than 80,000 students participate.
Arizona ESA students receive 90 percent of the state’s portion of per-pupil funding—typically about $7,409 for students without special needs. All told, Arizona’s public school students receive $15,102, from state, federal, and local revenues. Students with special needs get funded based on their specific disabilities. The most recent ESA quarterly report indicated that 1,344 ESA students with disabilities received $10,000–$30,000 during the 2023–24 school year, while 6,842 ESA students with disabilities received over $30,000.
Opponents of education choice have tried repeatedly to repeal or curtail the initiative. The anti-school-choice group Save Our Schools Arizona tried to put the universal ESA expansion on the ballot for a referendum, hoping to kill the idea, but failed to gather enough signatures. Ducey’s successor, Katie Hobbs, a Democrat, then called for rolling back the expansion, claiming that it would “bankrupt the state.” Her proposed budget would have restored the original eligibility criteria and booted tens of thousands of students from the program. The Republican-controlled legislature blocked her move.
Hobbs’s prophecies of fiscal doom also failed to materialize. At the end of fiscal year 2024, Arizona Superintendent of Public Instruction Tom Horne announced that, far from “bankrupting the state,” the state’s department of education enjoyed a $4.3 million surplus. Figures from the nonpartisan Joint Legislative Budget Committee showed that, though the ESA awards were $92 million higher than forecasted, the total was offset by a reduction of about $93 million, resulting from public school and charter school enrollment declines. The net result: a small savings of $352,200 relative to the enacted budget.
Unfortunately, as a recent Heritage Foundation survey reveals, satisfaction with the program’s administration has plummeted. While 99 percent of families still support the ESA concept, two-thirds report frustration with how the program is run. Parents describe a growing tangle of red tape that makes accessing funds time-consuming and stressful. “It used to be fantastic,” says Simone Bell, the mother of a 15-year-old student with ADHD and Asperger’s syndrome. The ESA let her provide one-on-one tutoring, which her local public school didn’t offer. “Now it’s a super nightmare.”
The problems stem from changes in how the plan is administered. Arizona Attorney General Kris Mayes, a Democrat, issued an opinion in July 2023 reinterpreting the ESA statute to require families to justify nearly every purchase with curriculum documentation. This has slowed the approval process, caused delays in reimbursements, and added hours of paperwork for parents. “You have to have a curriculum for everything—a pencil, a piece of paper, a book,” Bell says. “It takes me an average of an hour to make a curriculum. Imagine all the time it takes away from my child’s education. It’s ridiculous.”
Other parents echo Bell’s experience. “It takes me days to come up with the curriculum and tweak it, copy it, and upload it, especially if you have more than just one or two items,” says Candy South, who is raising three adopted grandchildren in rural Yavapai County. She adds, “Why should we need curriculum for pens and pencils and notebook paper?”
Mayes’s reinterpretation departs dramatically from how the initiative had been managed for over a decade. The ESA statute itself does not contain the curriculum requirement that Mayes has imposed, and critics argue that her new condition clashes with established legal principles. The Goldwater Institute, representing two ESA families, filed a lawsuit calling the mandate “contrary to well-established rules of statutory construction” and in direct conflict with the law’s plain language.
Arizona lawmakers have pushed back as well. House Speaker Ben Toma, a Republican, publicly criticized the new requirements, arguing that they create unnecessary bureaucratic hurdles. “The legislative record does not support such an overly restrictive view or burdensome administration of the ESA program,” Toma observed. Despite these objections, the Arizona Department of Education has complied with the attorney general’s demands, resulting in significant delays and confusion.
Parents report waiting weeks for approvals and months for reimbursements. For families like Bell’s, these delays mean that they often can’t afford necessary services as they wait for payments to arrive. “Things used to be auto-approved or approved in five or six days,” says Bell. “Now we’re lucky if they’re approved in three weeks.” She has been waiting more than two months for $1,400 in compensation for her son’s tutoring. “I can’t even get more tutoring sessions for my son because there’s no more cash in the account,” she says.
Clerical issues can compound the delays. Families ordering items through the ClassWallet Marketplace, for example, report that prices sometimes change while their requests are pending approval. When this happens, the entire order is canceled, and parents must start the process over.
The Heritage Foundation survey found that nearly half of ESA parents experienced expense denials due to insufficient documentation or unclear connections to a curriculum. One-third said that denials were issued without understandable explanations for how to fix the problem.
These issues disproportionately affect rural families and those with limited resources. Ash Langenberg, a single mother raising two kids with autism in Arizona’s Sonoran Desert, says that she spends 30 to 45 minutes on paperwork for each item she purchases. Waiting two months for $900 in reimbursements has forced her to seek help from a food bank to cover other expenses.
Superintendent Horne’s push for increased accountability has added to the challenges. In response to criticism from school-choice foes about potential fraud, Horne directed staff manually to review every ESA purchase. Though intended to prevent improper spending, these measures have helped slow the program to a crawl. Many feel that the trade-off between accountability and usability has gone too far. “Most of us are just parents trying to do what’s best for our children,” Bell says.
The ESA initiative was already highly accountable. A 2018 audit found improper payments totaled less than 1 percent of all spending—a rate far lower than that of most government programs. A more recent audit found just one improper payment—of $30, amounting to 0.001 percent of total ESA spending.
Arizona’s experience serves as a warning for states looking to implement or expand ESA plans. Excessive bureaucracy and poor implementation can undermine even the best-designed policies. Lawmakers should aim for a balance between accountability and accessibility. Restoring debit cards, for instance—which Horne phased out in favor of a system requiring pre-approval of all purchases—could help families access funds quickly, while maintaining oversight. “A lot of this backlog would be relieved if we had the debit cards because we could pay immediately, then upload the documentation,” says Caitlyn Paquin, a mother of two children with special needs. In the Heritage survey, 88 percent of ESA families that do not have access to a debit card say that they wish they had one.
Fortunately, Arizona is correcting its course. Horne recently announced plans to clear the massive backlog of pending expense and reimbursement requests, with risk-based auditing on the back end to ensure accountability.
Education savings accounts can transform schooling by empowering families to make choices that suit their children’s unique needs. But Arizona’s missteps show that, without thoughtful administration, these initiatives can fall short of their promise. For the growing number of states adopting choice policies, the message is clear: design matters, but execution matters, too.
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