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2018 Proposed Education Savings Account Framework

February 1, 2018 by uva72

Summary: The proposed Parental Choice Education Savings Account (PCESA) program is modeled after Arizona’s successful Empowerment Savings Account (AESA) program and contains features of similar programs recently passed in Tennessee, Nevada, and North Carolina.

Parents must withdraw their child from the public education system and sign an annual, renewable agreement with the State to provide their child with an education in accordance with existing Virginia laws that govern private school or homeschool. In return, parents receive 90 percent of the State’s portion of the per-pupil SOQ education funding allocated by the state to the local school district. This stipend is deposited quarterly into a private, restricted use savings account. The State reserves the right to audit accounts. Account expenditures are restricted to defined educational expenditures (see below).  Parents must submit expenditure receipts for the preceding quarter and agree to a random audit, prior to receiving funds for the subsequent quarter. In the event PCESA funds are found to have been spent on unapproved expenditures, the State can withhold future funds, request reimbursement, and / or take legal action against the parent.

Scope: PCESA eligibility includes all special needs children and non-special needs children, whose family’s income is less than or equal to 300% of the federal poverty guidelines, and: (i) who are residents of the Commonwealth to whom public schools shall be free pursuant to § 22.1-3; (ii) for whom compulsory attendance is required; (iii) were enrolled at and attended a public elementary or secondary school or preschool in the Commonwealth during the two semesters immediately preceding the semester or term for which the student initially applies for a savings account or (iv) are entering kindergarten.

Products and Services: PCESA educational uses include:

  • Private School Tuition
  • Education Therapy Services and Aides
  • Textbooks
  • Hardware, Software (limited to <10% of annual PCESA stipend)
  • Consumable supplies or services
  • Individual Public School Classes
  • Private Online Learning Courses
  • PCESA Management Fees
  • Advanced Placement Courses, Exams, Norm-referenced   Achievement Tests
  • Test fees
  • Tutoring
  • Curricula
  • College Tuition as part of a K12 curriculum
  • Textbooks
  • Student Transportation (limited to <20% of annual PCESA stipend)


Funds not used by age 22 for allowable purposes are returned to the state.

Administration: The PCESA program administration will co-exist with and build upon the existing Virginia Education Improvement Scholarship Tax Credit (EISTC) program and use existing VDOE and Local School District administrative mechanisms to the greatest practicable extent, thereby minimizing additional administrative cost. Currently, Florida manages its Tuition Tax Credit Scholarship program and Personal Learning Scholarship Account through a non-profit, Step Up For Students. Virginia may or may not choose to adopt a similar model.

Costs / Savings. Ninety percent (90%) of the current State’s portion of per pupil SOQ funding is used to fund a student’s PCESA (no local or federal funding is deposited to a student’s PCESA). Ten percent (10%) is retained by the VDOE, which can be put toward program administration or other educational purposes.

Benefits: The PCESA program will provide true parental choice in education. A parent is free to choose a private school, private tutors, or create a hybrid schooling option that meets a student’s specific needs.

  • Eighty-seven studies[1] since 1998 have found that parental choice in education has positive impact on student academic outcomes, public school academic performance, cost reduction, racial de‐segregation, and promotion of civic values and practices. In a 2009 survey[2] of Virginia parents, 35 percent of parents say they would like to send their children to a private school and 9 percent would like to homeschool their children. At the time of the survey, only 9 percent attended private school and 2 percent were homeschooled.
  • Parents manage their costs and are free to change providers. Consumer choice places downward pressure on educational product and service provider prices, because they must compete for customers. This will contain the growth in education costs. PCESA accounts can be combined with scholarships, grants, or family investment to leverage the value of a PCESA.
  • On average, a PCESA student will receive approximately one-third of the per pupil expenditure that otherwise would have been incurred by the state on his or her education, leaving two-thirds of the per pupil expenditure to the state to operate the school and invest in other students.

The greatest benefit is the ability to match educational options with their children’s unique learning needs. The following links provide actual examples:

Additional information can be found here:

[1] Forster, G., “A Win-Win Solution: The Empirical Evidence of School Choice,” The Friedman Foundation for Educational Choice, May 2016. [https://www.edchoice.org/research/win-win-solution/ ]

[2] DiPerna, “Virginia’s Opinion on K-12 Education and School Choice,” The Friedman Foundation for Educational Choice, November 2009, [ http://files.eric.ed.gov/fulltext/ED508321.pdf ]

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