Arizona parents using school vouchers for college tuition

PHOENIX — What should be done with $444 million of unspent money in the private accounts of parents with children in Arizona’s booming Empowerment Scholarship program?

One Deer Valley mom, also a public school board member, said she’s returning leftover money even though it could have been used for her son’s college expenses.

“I don’t believe in wasting money,” said Kim Fisher, an ESA mom and Deer Valley School Board member. “It will go back. It’ll go back into the system.”

Fisher, who was the top vote getter last year for her seat, said more than $20,000 is being returned to the state.

The 12News I-Team obtained state records that show there’s nearly $50 million in dormant or “inactive” accounts of the $444 million in unused funds.

State law allows parents to save their ESA dollars for college, and the I-Team found some families already are doing so.

Public records 12News obtained from the Arizona Department of Education show nearly $700,000 in ESA funds were spent on college expenses during the past three years after the ESA program was expanded. 

That means any Arizona family, regardless of income, can obtain an education voucher. 

A typical ESA scholarship is $7,000 to $8,000, and they can exceed $40,000 for special needs kids.

Since the ESA expansion, more than 80 percent of the college spending occurred last year.

The largest sum, more than $137,000, went to Grand Canyon University last year, records show.

Bob Romantic, a GCU spokesman, said those dollars were primarily used for dual credit classes while students were in high school, providing Arizona families significant long-term savings for college.

“GCU does not market to ESA students or solicit students to apply for an ESA program due to its specialized criteria, but we do assist students who have expressed interest in GCU and are already part of the ESA program,” Romantic said. “It is not surprising that students who attend private K-12 schools or are home-schooled would also choose to attend a private university.”

In addition, five-figure sums went to several Arizona community colleges during the past three years, 12News found.

Fisher said she thought about doing that for her special needs son.

“I know that’s the big controversy right now, which I really don’t get the controversy,” she said. “Those are his education dollars.”

Fisher noted that students in Deer Valley and other district and charter schools can earn college credits while in high school.

• More than 10,000 accounts are sitting on at least $10,000 each.
• Nearly 200 people have more than $100,000 each.
• Ten accounts have more than $200,000 each, and one account has $261,159.

State Sen. Lauren Kuby, D-Tempe, said some families are holding onto more than enough money to cover the entire cost of in-state tuition.

“It was written in the law as a loophole,” Kuby said. “People didn’t see what the ramifications would be.”

Kuby said her constituents and fellow lawmakers were outraged to see what 12News uncovered.

“Why do we want to take away the revenue we need for public education to favor the wealthy few?” she said.

Kuby has tried to rein in the program, which allows unused money to sit for up to three years.

She sponsored one bill that would claw back unused money after one year. Another bill would have prohibited spending leftover money on college.

She said Republicans who control the Legislature didn’t give either bill a hearing.

“It’s time to take a hard look at this,” she said.

The recently approved state budget included no changes to Arizona’s ESA program, though Gov. Katie Hobbs and other Democrats attempted to put income caps of at least $200,000 in place.

The program was expanded in 2022 under former GOP Gov. Doug Ducey. 

Now, with no income caps to qualify, the program is expected to cost $1 billion this upcoming school year for about 90,000 kids.

“I’ve heard from the Legislative majority that this is a sacred cow,” Kuby said.

Freshman Rep. Nick Kupper, R-Surprise, said GOP lawmakers are united in their support of school choice. He said they were given a mandate last fall, when Republicans expanded their majority in the state Legislature.

“It’s pretty obvious that the people in Arizona, in general, want ESAs,” said Kupper, who served 20 years in the Air Force.

Kupper said ESAs “opens up the opportunity for people” who otherwise cannot afford to homeschool their child or send them to a private school and do “whatever is right for that particular child.”

Kupper said ESAs have helped his four kids, including a special needs daughter who was adopted. He said he could support some minor changes, like making sure ESA dollars are only used for Arizona colleges.

Now, the law is unclear if ESA funds can be used for private universities outside of Arizona.

Kupper also said he may support clawing back unused ESA dollars after two years.

Meanwhile, ESA Director John Ward told a legislative panel on Monday that there’s $12 million in unused funds that could be “swept” because those ESA students have gone back to public schools.

However, he said his small staff does not have the “bandwidth” to pursue “accounts that may be beyond the three-year mark.”