Education Savings Accounts

The Students First Act, introduced by Governor Reynolds and signed into law on January 24, 2023, makes state funding available to support the success of every K-12 student in Iowa. The bill establishes a framework and funding for education savings accounts, which may be used by eligible families to cover tuition, fees, and other qualified education expenses at accredited private schools in Iowa.

How it Works

Parents who choose to enroll their eligible children in an accredited private school will receive an amount equal to the per pupil funding allocated to public school districts for the same budget school year. Funds will be deposited into an education savings account (ESA) to be used for tuition, fees, and other qualified education expenses as specified in the legislation.

The state is issuing a request for proposal (RFP) from businesses with experience managing ESA programs. The vendor selected will support the transfer of funds from the state to families of eligible students and ensure program compliance. 

Who is Eligible

ESAs will be available based on the following eligibility:

Year 1: School Year 2023-24 

• All entering kindergarten students
• All students enrolled in a public school
• A student enrolled in a private school with a household income at or below 300% of the 2023 Federal Poverty Guidelines, $90,000 for a family of four

Year 2: School Year 2024-25

• All entering kindergarten students
• All students enrolled in a public school
• A student enrolled in a private school with a household income at or below 400% of the 2024 Federal Poverty Guidelines that will be updated January 2024

Year 3: School Year 2025-26

• All K-12 students in Iowa regardless of income

Categorical Funding

Other student funding generated by categorical funding formulas will remain with public school districts. This will include funding for students who choose to leave their public school, and for all students who live in the district but attend a private school. It’s estimated that Iowa’s public schools will receive approximately $1,205 per pupil in categorical funding for students enrolled in private schools.

How to Apply

The application process is in development now and details, including the application start date, will be provided soon. Applications will be due on June 30, 2023, for the 2023-2024 school year. Applications are valid for one year; a family must apply annually to remain eligible for the program.

Questions and Answers

Updated: 2-10-23

Answers to frequently asked questions will be posted regularly on this webpage. Send your questions to studentsfirst@iowa.gov or call 515-281-5211.

Can I use ESA funds to pay preschool tuition for my child?

A: No. ESA funds must be used for kindergarten through 12th grade education at an accredited private (nonpublic) school in Iowa.

Q: My daughter is in a private Pre-K program this year. Will she qualify for an ESA as an incoming kindergartener this fall?

A: Yes. All incoming kindergarteners are eligible for an ESA in the 2023-2024 school year regardless of income. ESA funds must be used for an accredited private (nonpublic) school in Iowa.

Q: If my kindergartener is eligible for an ESA this upcoming school year, will he receive a payment in his ESA again the following year when he’s a first grader?

A: Yes. Once an ESA account is established for a student, funds will be deposited into the account each year as long as they are enrolled in an accredited private school and until the student graduates from high school or turns 20 years of age. Families are required to apply annually to remain in the program.

Q: My kids are currently in a public school. Do they qualify for an ESA next school year even if we are above the income level?

A: Yes. All students who currently attend a public school and choose to enroll in an accredited private school for the 2023-2024 school year are eligible regardless of household income.

Q: Our children already attend a private school. When are they eligible for an ESA?

A: ESA eligibility for students who are currently enrolled in an accredited private school is based on household income during the first two years of the program. For the 2023-2024 school year, families with household incomes at or below 300% of the federal poverty level (FPL) are eligible. The level increases to at or below 400% FPL for the 2024-2025 school year. Beginning in 2025-2026 school year, all K-12 students who already attend an accredited private school are eligible for an ESA regardless of household income.

Q: We are a family of six with three of our children currently attending a private school. What income amount applies for us to be eligible for an ESA next school year?

A: Income eligibility will be determined using the current year’s federal poverty level (FPL) guidelines. The 2023 FPL guidelines were updated on Jan. 19, 2023. For the 2023-2024 school year, families making at or below 300% FPL will be eligible to receive an ESA for their children who currently attend an accredited private school. The following school year, families making at or below 400% FPL will be eligible.

Q: Is income eligibility based on gross income shown on our 2022 federal tax return, 2022 state tax return, or something else?

A: The ESA application process will require proof of income for families whose children are currently enrolled in an accredited private school and applying for an ESA for the 2023-2024 or 2024-2025 school years. Details regarding how applicants will verify income will be provided before the application period opens in the coming months.

Q: My children attend a private school and we receive tuition assistance from a STO. Are we also eligible for an ESA?

A: Yes. You can receive an ESA in addition to other tuition assistance that may be available to your family. 

Q: We live in Council Bluffs, near the Nebraska border. Can my kids use their ESA funds to attend a private school in the Omaha area since it’s close to our home?

No. ESAs provided by the state of Iowa can only be used to attend accredited private schools located in the state of Iowa. The funds cannot be used to attend a private school in another state.

Q: We homeschool our children. Are they eligible for an ESA if they enroll to take 1-2 classes at an accredited private school?

A: No. Students must be enrolled full time in an accredited private school to be eligible for an ESA.

Q: Our children are currently homeschooled. If we move them to a private school next year, are they eligible for an ESA?

A: Yes, they would be eligible for an ESA regardless of income as long as they are enrolled as a full-time student at an accredited private school.

Q: Can an ESA be used to attend an online private school?

A: Yes. However, the student must be enrolled full time, and the online private school must be accredited through the Iowa Department of Education.

RFP Released for ESA Implementation and Administration

The State of Iowa released a request for proposal on Jan. 25, seeking a third-party contractor to implement and administer an ESA program. The vendor selected will support the transfer of funds from the state to families of eligible students and ensure program compliance. Proposals due Feb. 14.

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