Understanding Back on Track ESAs

Key Points

• Pennsylvania children lost months of schooling—many without access to educational resources. Families are bearing increased expenses from at-home learning.
• Back on Track Education Scholarship Accounts (ESAs) will help kids catch up over the summer and through the fall semester.
• The CARES Act included money specifically for new, coronavirus-related expenses, so Back on Track ESAs could be covered by CARES Act funds.
• Recent polling shows 73% of Pennsylvanians support ESAs, with strong support across all regions and demographic groups.

What are education scholarship accounts (ESAs)?

ESAs are restricted-use accounts that are funded with tax dollars. Like health savings accounts, 529 college plans, or electronic benefits transfer (EBT) cards for food stamps, funds in Back on Track ESAs could only be used for approved purchases—things like tuition, online classes, curriculum, tutoring, and services for students with special needs.

ESAs are currently operational in five states: AZ, FL, MS, NC, and TN. Arizona’s was the first program in the nation and now supports about 7,000 students. Florida has the largest program with nearly 14,000 participants. The other states have fewer than 1,000 participants combined. All of the current ESA programs focus on students with special needs. Arizona’s also includes military families, students in low-performing districts, foster children, and children on Native American reservations.

What are Back on Track ESAs?

ESAs typically follow the traditional school year and are used for expenses accrued from educational options outside of attending the local district school. Back on Track ESAs are different. Their purpose is to help kids recover from educational harms caused by COVID-19 school closures. They can be used by kids regardless of what type of school they usually attend. Over the summer months, Back on Track ESAs can be used to help kids prepare for the new school year. Once school resumes, they can be used for things like after-school enrichment or tutoring. Rather than attempting a one-size-fits-all solution, Back on Track ESAs will allow parents to get the specific help their kids need.

How would Back on Track ESAs be funded?

The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act included $3.9 billion for coronavirus-related expenses in Pennsylvania. While much of that has been appropriated, around $1.3 billion remains available. Since the purpose of Back on Track ESAs is to help kids catch up from COVID-19 school closures, they would qualify for CARES Act funding.

Taxpayers throughout the state have asked if they’ll receive a tax rebate due to school closures. Other sectors of the economy are offering refunds to account for COVID-19 related service interruptions. Many colleges are offering partial refunds to students for room and board and other fees. Auto insurance companies are reimbursing customers because car accidents are down during the quarantine. Attorney General Josh Shapiro has even threatened $1,000-$3,000 fines to gyms that continue charging fees for services they can’t provide.

Education funds are meant to educate Pennsylvania kids—and that needs to happen even if schools are closed. While Back on Track ESAs aren’t a refund, they have a similar impact by providing parents funds to deal with new at-home learning expenses.

How much will they cost?

Back on Track ESAs will be worth $1,000 and initially be limited to families who qualify for the free and reduced lunch (FRL) program. For a family of three, that means households with an income below $40,182. There are an estimated 600,000 children in Pennsylvania who would qualify for Back on Track ESAs using the FRL guidelines.¹ There will be a $500 million cap using some of the $1.3 billion remaining from CARES Act funds. This cap means not every eligible child will be able to receive one, but the program will potentially help 500,000 kids catch up on learning they missed during school closures. The final cost of the program will depend on how many students apply for an account.

Is there public support for ESAs?

Yes! Recent polling shows 73% of Pennsylvanians support ESAs—and the poll was conducted before schools were closed due to COVID-19. Now that families across the state are educating their kids at home—with varying degrees of district support—it’s likely even more would support Back on Track ESAs.

[1] Commonwealth Foundation estimate based on income distribution stats from:  https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/

*Note: This blog originally included various scenarios for income eligibilty and ESA value. The bills introduced in the House and Senate are using the free and reduced income guidelines (185% of poverty level) as the initial income eligibility. This blog has been updated to reflect that.