The Education Savings Accounts for Military Families Act of 2019: Question & Answer

Blog Articles · Mar 25, 2019


Rep. Jim Banks (R-Ind.) and Senators Ben Sasse (R-Neb.), Tim Scott (R-SC), and Tom Cotton (R-Ark) recently introduced the Education Savings Accounts for Military Families Act (H.R. 1605 and S. 695). This legislation would provide active duty military families federally funded Education Savings Accounts (ESAs) that they could use to pay for educational products and services that work best for their children, including materials to educate their child at home,, private school tuition, district and charter school services, personal tutors, online classes, and education therapies for children with special needs..

Providing learning options to families in uniform is essential for military readiness because recruiting and retaining talent in the military is vital to our national security. According to a survey conducted by Military Times, 35 percent of its respondents said dissatisfaction with a child’s education was or is “a significant factor” in deciding whether or not to continue military service. By providing education opportunities through ESAs, the military will possess a key tool to both attract and retain military families while also saving millions in military resources.

Below are some common questions and answers on The Education Savings Accounts for Military Families Act of 2019:

Question: Why do military families need this legislation?

Answer: Families who serve in the armed forces move from duty station to duty station often with few choices about where they live or what schools their children attend. As noted in a Heritage Foundation report, the Pentagon’s changes to policy in 2016—enabling families to remain at duty stations for longer time periods—was a direct response “to complaints by military parents who loathe to move if the next duty station has poorly performing schools.” Those complaints stem from the fact that military-connected children are too often assigned to the schools closest in proximity to military bases, regardless of whether those schools meet their needs. More than half of all active-duty military families live in states with no school choice options at all. According to a recent survey, military respondents were almost five times more likely to support ESAs than they were to oppose them (72 percent favor vs. 15 percent oppose). Giving military families an ESA will empower parents to give their children the kind of high-quality education they deserve, regardless of where they may be stationed at the time.

Question: How would this bill benefit the military?

Answer: Recruiting and retaining talent in the military is vital to our national security. According to a survey conducted by Military Times, 35 percent of respondents said that dissatisfaction with a child’s education was or is “a significant factor” in deciding whether or not to continue military service. By providing more education choices through ESAs, the military will possess a key tool to both attract and retain military families. Reducing turnover in the ranks is an important way to lower training costs while retaining institutional knowledge and boosting morale. According to Air Force Deputy Chief of Staff for Manpower and Personnel Services Lt. Gen. Gina M. Grosso, at the end of fiscal year 2016, the Air Force active and reserve components were short a total of 1,555 pilots, including 1,211 fighter pilots. A 1,200 fighter pilot shortage amounts to a $9 billion capital loss for the United States Air Force since the cost to train a fighter pilot is around $6 million. At a time when 71 percent of young Americans between the ages of 17-24 are ineligible to serve in the military, recruiting and retaining those serving in our armed forces is a vital national security concern. Establishing military ESAs will help address some of these concerns, better serve our military families, and strengthen our national security.

Question: Are Military Education Savings Accounts an appropriate use of federal funds?

Answer: Yes. While education is a state and local issue, providing education choice to military families is tied to national defense and therefore establishes an appropriate use of federal funds. The NDAA presents a great legislative vehicle for military ESAs and its funding. Heritage Action and Conservatives are committed to advancing these bills individually or including military ESAs in this year’s NDAA.

Question: Does school choice work?

Answer: Yes. In Arizona and Mississippi, surveys of education savings account families find high levels of patient satisfaction. Nearly twenty studies using the highest standard of social science research find positive academic outcomes for some or all of the children participating in private school choice options across the country. Other research on private school scholarship students finds positive correlations with high school graduation, college attendance and persistence, civic values, and reports of school safety.

State lawmakers continue to expand learning opportunities through parent choice. Policymakers in more than half of U.S. states have created private options for parents in recognition that choice (rather than assigning students to school according to their ZIP code)) provides better opportunities for all families.

Question: What is the difference between an Education Savings Account and a school voucher?

Answer: School vouchers allow parents to use public funds to pay private school tuition. A state agency issues a check, which is endorsed by a parent and turned over to a private school—or the check can be issued directly to a school under the parents’ names. With Education Savings Accounts, parents can use student funds for multiple education options simultaneously, including, but not limited to, private school tuition. Parents can choose to customize their child’s education.

Question: How will the Military Education Savings Accounts be funded?

Answer: Similar to how veterans receive federal funding through the G.I. bill to attend any college he or she chooses, this legislation provides federal funding directly to military parents and children to attend any school or education service provider of their choice. The Education Savings Accounts for Military Families Act allows a portion of current federal funding to be redirected to the parents of military-connected children. In this way, the money follows the child and goes towards resources that are tailored to his or her needs. And quarterly expense reports provide transparency and accountability.

Question: Does this bill use Impact Aid Funding?

Answer: No.

Question: What could the funds be used for?

Answer: Funding may be used for a wide variety of qualified educational services including: costs of attendance at a private school, private online learning programs, private tutoring, educational services provided by public schools such as individual classes and extracurricular activities, textbooks, computers, educational software and applications, school uniforms, fees for nationally standardized assessment exams, Advanced Placement exams, any exams related to college admission, fees for summer education programs, educational services and therapies, transportation fees, costs of attendance at an institution of higher education, costs associated with an apprenticeship or vocational training program, fees for state-recognized industry certification exams, and contributions to a 529 college savings account.

Question: How would this proposal prevent fraudulent uses of the funds?

Answer: In states that have ESA programs, such as Arizona, parents and students can only use their accounts for eligible expenses listed in state law. The Arizona auditor reviewed the program in 2016 and found that one percent of funds distributed during the period audited were misused. Senior Policy Analyst at The Heritage Foundation, Jonathan Butcher, explains how the process works from there:

At the end of each fiscal quarter, parents complete an expense report. Families submit receipts for each purchase to the agency overseeing the accounts. The agency cross-references the items on the report with the bank’s records. Once all transactions have been accounted for, the agency makes the next quarter’s deposit. If state officials find a discrepancy between a parent’s report and the bank’s register, the agency can withhold the next quarter’s disbursement. State officials can close an account in the event of fraud.

Rep. Banks’s and Senators Sasse, Scott, and Cotton’s proposal establishes a similar system. This piece of legislation establishes a website and a telephone hotline that allows individuals to report fraud. It also requires qualified educational service providers (that receive over $100,000 in funds) to put up a “surety bond” to insure reimbursement to military families in the event of fraud. Consistent with state ESA programs, this military ESA option would also require parents to submit documentation of their education expenses quarterly, with the Department of Education reserving the right to audit accounts and withhold the subsequent quarter’s distribution of funding if there is evidence of misuse.

Question: What happens if families do not use all of the funds for the year?

Answer: Any unused funds can be rolled over into next year and eventually be used to pay for higher education in the form of a 529, if a student chooses.

Question: How will this bill impact kids who are educated at schools on military bases?

Answer: There is no impact. This proposal does not address children who are currently educated on military bases. Roughly four percent of military-connected kids are educated at schools on bases, at great expense to the military. The DOD should continue to study this issue and explore the feasibility of expanding this Education Savings Accounts proposal to military children educated on bases. The most recent Heritage Foundation report detailing recommendations to Congress entitled The Role of the 2020 National Defense Authorization Act (NDAA) in Rebuilding the U.S. Military made this recommendation. The report states: “Empowering all families who serve with school choice would ensure that their children do not face mandatory assignment to the nearest district school. Providing military parents with ESAs would allow them to find education options that are the right fit for their children, wherever their next assignment takes them...ESAs give military families the option to enroll their children in the local school system or pursue a school of choice.”

Question: How will this bill impact military-connected kids who are stationed overseas?

Answer: There is no impact because children living overseas are ineligible for military ESAs. A military child is only eligible for an ESA if he/she attends public school in the United States.

Question: Which agency will be responsible for administering this program, and how much will it cost to manage the accounts?

Answer: The U.S. Secretary of Education in consultation with the Secretary of Defense will administer the program. The state of Florida currently serves approximately 10,000 students with ESAs at an administrative cost of only $2.1 million. It is reasonable to predict that the Secretary of Education would be able to serve military students at a similar cost ratio.

Question: How long can an account remain open?

Answer: The account expires when the student completes postsecondary education or the date on which the student attains 22 years of age (26 years of age for students with a disability), whichever comes first. Students with special needs have an extended time frame of four years. Any unused funds return to the Treasury of the United States and will be put back into the MESA program.

Question: Are these funds included in taxable income for the parents?

Answer: No. Children and parents are exempted from paying federal taxes on any contribution to or distribution from a military ESA since the monies are already federal funding.

Question: Will this proposal lead to increased federal or state control over private schools, home schools, or other education service providers?

Answer: No. First, this proposal is voluntary for families and qualified education service providers. Second, education service providers who do receive payments from military ESAs will not be considered agents of the state or federal government, cannot be supervised or controlled by the state or federal government, and are not required to change their creed, practices, admissions policy, or curricula to be eligible to receive payments from a military ESA. Finally, assistance provided by this proposal is considered assistance to the military family not to the qualified education service provider that uses or receives funds from military ESAs. This ensures education providers who participate in this program are not subject to federal anti-discrimination laws, which were used to undermine religious freedom under the Obama administration.

Download PDF