The authors examine Arizona’s Education Savings Account (ESA) program, which helps parents who opt out of public schools fund their children’s education. The authors explore the program’s growth, who uses the program under different eligibility schemes, how much the program costs, how families use ESA funds, and the private education sector’s responses to the ESA policy, and they offer recommendations for states implementing or expanding ESAs.

Case Study of Arizona’s K–12 Education Savings Account Program

What State Policymakers Can Learn

Susha Roy, Alexis Gable, Min Jung Kim

ResearchPublished Nov 13, 2025

The authors examine Arizona’s kindergarten through grade 12 (K–12) Education Savings Account (ESA) program—the oldest program among the 19 states that now have ESAs. ESAs give families with school-aged children public funds to spend on their children’s education if they opt not to enroll them in public schools. Arizona’s program was introduced in 2011, with the first students enrolling in the 2011–2012 school year. The program was first targeted to students with disabilities but has since seen numerous eligibility expansions. As of 2022, the program was expanded to allow universal eligibility. These multiple iterations of the ESA program create a unique opportunity to explore different ESA policy designs, many of which mirror approaches used by other states implementing ESA programs.

The authors explore Arizona’s ESA program’s growth, who uses the ESA program under different student eligibility schemes, how much the ESA program costs, how families use ESA funds, and the private education sector’s responses to the ESA policy. Using the insights gained from the case study in Arizona, the authors offer key recommendations for states implementing or expanding ESAs.

Key Findings

  • Arizona’s universal ESA policy expansion in 2022–2023 led to participation growing from almost 12,000 students in the 2021–2022 school year to nearly 90,000 students in 2024–2025.
  • Arizona’s spending on ESAs has gone from $2.2 million (in 2025 dollars) in the 2011–2012 school year to $886 million in 2024–2025.
  • Approximately 7 percent of Arizona’s school-aged population uses ESAs as of the 2024–2025 school year.
  • Prior to universal eligibility expansion, students with disabilities were the largest user group, making up 60 percent of ESA users. Since the expansion, students with disabilities now make up 18 percent of ESA users.
  • ESA users tend to come from school districts that have higher achievement levels, serve students from more-affluent backgrounds, and have larger White populations, on average.
  • Families spend roughly 60 percent of ESA dollars on private school tuition, but a growing portion goes toward other education services.
  • As of the 2023–2024 school year, 28 percent of ESA funds that have been awarded have not been spent.
  • Arizona’s ESA program has induced growth in the education marketplace: The number of vendors on Arizona’s online education marketplace increased from 1,339 in 2021 to 6,091 by 2024, and the estimated number of private schools in Arizona has increased from 451 to 515 since 2022.
  • Since the universal ESA policy was implemented, private elementary school and high school tuition rates have grown 12 percent and 5 percent respectively, although these increases are not definitively in response to universal ESAs.

Recommendations

  • States should consider what goals they are trying to achieve and design their ESA program accordingly. If the goal is to provide alternative educational opportunities for students who do not have access to appropriate public education options, a targeted program might be advisable. If the goal is to allow public funds to follow students, regardless of whether or not they are already enrolled in private school, universal ESA programs might be fitting.
  • States implementing universal ESA programs should conduct targeted outreach to families who could benefit but might otherwise be less likely to learn about and use ESAs, such as families of children with disabilities or low-income families in underperforming schools.
  • States implementing universal ESA programs should budget their programs with the expectation that a significant share of first adopters will likely be students already enrolled in private schools or homeschooled.
  • To increase predictability of state budgets, states should consider requiring families to spend their ESA allocations within each calendar year rather than roll funds over from one year to the next.
  • States should monitor whether private schools raise tuition in response to ESA programs and consider policies to safeguard against tuition hikes.
  • States with ESA programs should consider using digital wallets and online platforms to reduce the administrative burden of running ESA programs, streamline the process for families making purchases with their ESA funds, and reduce the opportunity for fraudulent spending.
  • States should implement regular reporting on ESA financing and student outcomes to ensure that programs remain transparent.

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Roy, Susha, Alexis Gable, and Min Jung Kim, Case Study of Arizona’s K–12 Education Savings Account Program: What State Policymakers Can Learn. Santa Monica, CA: RAND Corporation, 2025. https://www.rand.org/pubs/research_reports/RRA3431-2.html.
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