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Senate Bill 1038 — Freedom in education savings accounts

Senate Bill 1038 — Freedom in education savings accounts

Kaitlyn Shepherd
February 8, 2023

Bill Description: Senate Bill 1038 would establish Freedom in Education Savings Accounts, education scholarships that would be available to every K-12 student in Idaho. Each participating student would receive  $5,950 to use for educational services, as determined by the student or the student’s family.

Rating: +5

Does the bill expand the existing government monopoly on education and shrink family and student choice or agency? (-) Conversely, does the bill expand the ability for families and students to choose the educational options that best meet their needs free of government intervention or coercion? (+)

Senate Bill 1038 would reduce the government monopoly on education by expanding the ability for families and students to choose the educational options that best meet their needs free of government intervention by creating Freedom in Education Savings Accounts. These accounts would be available to any K-12 student in Idaho and would provide $5,950 in state education funding for families to use for a wide variety of educational expenditures. Eligible expenses include private school tuition, educational therapies, vocational education, tutoring, uniforms, computers and more. Families could also save money for future college expenses.


Does the bill finance education based on the student rather than the institution? (+) Conversely, does the bill finance education based on an institution or system? (-)

Senate Bill 1038 would finance education based on the student, rather than his or her residentially assigned district school, by allocating $5,950 in state funding per participating student that can be used wherever the student gets an education. Accounts would be funded by the Legislature’s annual appropriations, rather than the current formula-based approach. This means that the Legislature could reallocate funds from an existing education program or take from the General Fund to finance the accounts.


Senate Bill 1038 also finances education based on the system by leaving 20% of state funding behind in a public school when a student leaves that school to participate in the Freedom in Education Scholarship program. The $5,950 allocated per participating student represents 80% of what that student would have cost in the existing education system. Therefore, the state would save approximately 20% of what otherwise would have been spent for that student to attend a public school. Districts would also retain all local and federal funds. At the same time, schools lose the costs associated with educating students who leave the public education system to participate in the program. As a result, the amount of funding per remaining student increases.


Analyst’s Note: Implementing Freedom in Education Savings Accounts would save the state money in the long run because the cost of educating students in public schools will far exceed the costs of administering the program. This is because the Freedom in Education Savings Accounts serve two students for the cost of educating only one student in a public school. According to State Department of Education (SDE) financial reports, one public school student costs $11,298, whereas each student who participates in the Freedom in Education Savings Account program is given $5,950. Therefore, when a student leaves a public school to participate in the program, the state spends less money on that student.


Does the bill decrease barriers to entry for teachers and other education professionals or services, thus incentivizing entrepreneurship and increasing the supply of options for education services in the marketplace? (+) Conversely, does the bill create barriers to entry into the education marketplace? (-)

Senate Bill 1038 would remove barriers to entry to the education marketplace by decentralizing the public education monopoly through the creation of education savings accounts, which allow a portion of state dollars to follow students to the education environment their families choose. The passage of Senate Bill 1038 would incentivize more innovation by encouraging education entrepreneurs to enter the marketplace and provide higher quality products at a lower price. 


Does the bill create more transparency or accountability in public education institutions? (+) Conversely, does the bill reduce transparency and accountability in such institutions? (-)

Senate Bill 1038 would hold public schools accountable to parents by changing the incentives of public schools to serve the needs of their customers and forcing them to improve or risk losing students. Under the current system, public schools continue to receive more funding regardless of whether they are meeting students’ and families’ needs.

Senate Bill 1038 would also make the system more accountable to parents by creating a parent oversight committee, which would work with the SDE to review policy and procedure implementation, parental concerns, and complaints associated with administering accounts. Parents can’t serve on the committee if they are an employee or relative of an employee of the SDE; are associated with a lobbyist group, school choice advocacy group, or group that manages the scholarship accounts; or if they provide educational services to students in the program.


Senate Bill 1038 would provide accountability for taxpayers, too. Parents of participating students must sign an agreement to provide an education in certain subjects and to use the scholarship only for the enumerated purposes. In addition, SDE must conduct or hire someone to conduct random, quarterly, and annual audits to ensure that funds are spent only on approved expenditures. Next, the SDE may remove any parent or student who knowingly misuses funds or fails to comply with the signed application agreement. Money goes directly from students’ accounts to educational providers, so parents and students are not handling funds. Finally, the attorney general may investigate and resolve cases of fraud.


Does the bill reinforce the idea of equal treatment under the law, merit, individual responsibility, personal agency, and expectations of academic excellence? (+) Conversely, does the bill allow for any type of discrimination against, or grant preferential treatment to, any individual or group for any purpose on the basis of race, sex, color, economic class, ethnicity, national origin, geographic area, legacy status, or other identity group? (-)

Senate Bill 1038 reinforces individual responsibility and personal agency by returning control over education to students and families and allowing them to personalize education to fit each family’s needs. 

In addition, the bill reinforces the concept of equal treatment under the law because every student, regardless of background or family income, is eligible to participate and receive an account. Students are not denied the ability to participate because of race, sex, color, economic class, ethnicity, national origin, geographic area, legacy status, or any other identity group.


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