New report highlights Indiana's Choice Scholarships as vouchers increase nationwide • Indiana Capital Chronicle

As Indiana’s private school voucher system continues to grow, a new report suggests other states are taking notice and boosting public dollars for private education, too.

FutureEd, an education research nonprofit at Georgetown University, studied eight states — Arizona, Arkansas, Florida, Iowa, Indiana, Ohio, Oklahoma and West Virginia — where 569,000 students are participating in “school choice” programs at a cost to taxpayers of $4 billion in 2023-24.

Researchers also looked at programs in North Carolina and Utah that started this school year, as well as programs in Alabama and Louisiana that are set to begin in 2025-26.

After widening Indiana’s Choice Scholarship Program in 2022, state lawmakers further expanded the voucher system in 2023 to be nearly universal and open to almost all Hoosier families.

Since the changes took effect, eligibility for the scholarships — which allows families to receive vouchers to attend private schools — have expanded to include households with incomes up to 400% of the amount required for a student to qualify for the federal free or reduced price lunch program, equal to about $220,000.

When state lawmakers crafted the current two-year state budget during the 2023 session, Republican budget writers additionally baked in more than $1 billion for a major private school voucher expansion, which grew Indiana’s Choice Scholarship funding by 69% the first year and 14% the second year.

The state’s latest voucher report showed private school voucher program enrollment jumped about 32% in the 2023-24 school year, marking a historic single-year jump.

“Never in the history of American public education has so much money been available to parents to pay for private school tuition or homeschool expenses,” FutureEd researchers said in the report, released earlier this month.

And there could be more to come in the Hoosier state.

During the most recent 2024 legislative session, budget leader Sen. Ryan Mishler, R-Mishawaka, previewed his own proposal to completely overhaul Indiana’s private school vouchers with a grant program that would allow all Hoosier families — regardless of income — to choose where their students get educated.

Although the bill did not advance, discussion at the Statehouse previewed likely legislative momentum in 2025. Several Republicans running for governor and the state legislature have promised to make vouchers universal.

How funding is allocated

Indiana’s state-funded program enrolled a record 70,095 students in 2023-2024, costing taxpayers $439 million — which is around 40% higher than the $311 million spent on vouchers in the year prior.

Had all Hoosier voucher users attended their traditional public schools, however, the state would have paid around $516 million in education expenses. That’s because vouchers are paid at a lower amount than public school funding. 

Still, the ways private school choice programs are funded vary significantly from state to state. 

Some states impose budget or enrollment caps, according to the FutureEd report. Some prioritize funding based on need, or provide more dollars to lower-income families. 

That includes Utah’s new universal education scholarship (ESA) program, launching this school year, which gives preference to students from families with incomes at or below 200% of the poverty line ($62,400 for a family of four). Due to high demand and limited seats, all students awarded ESAs to date fall within that income group, according to FutureEd.

Indiana private school voucher participation sees historic boost, according to new report

Indiana does neither; household income must only stay below 400% ceiling tied to federal free or reduced price lunch program qualification.

Others, like Florida and Arizona, cover all applicants irrespective of family means, without caps on the number of students funded or the amount awarded. 

In states where private school choice providers receive state education aid, they typically get the equivalent of about 90% of a state’s per-pupil funding of public schools and the funding that public schools receive from local property taxes does not follow students to private schools, FutureEd researchers continued.

Vouchers in Indiana provide 90% of the amount of state-funding a public school corporation receives for each student, or covers all tuition and fees, whichever is lesser. The average award amount during the 2023-24 academic year was $6,264 in Indiana, and the average tuition and fees at a private school was $7,749. 

That’s on par with Arizona, where most vouchers are valued between $7,000 and $8,000, and Arkansas, where the average award is $6,672. Florida, Iowa and West Virginia, on the other hand, fund each pupil the same as their public school counterparts.

Oklahoma and Ohio’s programs tier amounts by a family’s income. Ohio additionally increases award amounts for high school students, up to $8,407.

The majority of funds were used for tuition. Indiana and Ohio pay tuition directly to schools. Iowa mandates that ESA dollars be spent on tuition before other approved educational expenses, such as tutoring or textbooks. Arkansas restricts funds to tuition, supplies, uniforms, or other school-required expenses, and most are spent on tuition. Though Arizona gives families the widest spending latitude, 85% of funds were spent on tuition, tutoring, curricular materials, or textbooks in 2023-24.

“This marks a major change in K12 education policy,” FutureEd Director Thomas Toch said in a statement. “It’s the first time this level of public funding has been available to parents in the U.S. to pay for private school tuition or homeschool expenses. And it looks likely to expand further. Enrollment continues to increase where programs are offered; several additional states have legislative proposals in the works; and advocacy organizations continue to push aggressively for expansion.”

Which students are using vouchers?

In Indiana — where 90% or more of students in 178 private schools are attending with public funding — the 357 schools accepting public dollars are mostly concentrated in metropolitan and suburban areas.

“Interestingly, in Indiana most students who attend private schools do so within the boundaries of their local public school system,” researchers noted. “This may be due to the state’s relatively large number of participating private schools or a preference for geographical convenience.”

The FutureEd report pointed to a 2024 survey published by EdChoice, an Indiana-based school choice advocacy group, which showed that 19% of parents ranked proximity to home as one of their top-three reasons for selecting their children’s private schools. A larger percentage of parents cited academic quality, safe environment, and morals/character instruction as their top reasons for selecting private schools.

While Ohio and Indiana currently make racial and ethnic data available on private school choice participation across years, “there has been an increase in the participation of white students in those states as eligibility has expanded,” researchers noted.

In Ohio, the share of white students receiving public funding for private schooling in the universal program increased from 66% to 82% after the program’s expansion, with almost 90% of new participants identifying as white, while the percentages of Black and Hispanic students decreased. Prior to Ohio’s expansion of the program, the racial makeup of students more closely mirrored the composition of public-school students, the FutureEd report highlighted. 

In Indiana, the proportion of white students also increased but much less than in Ohio, growing from 62% to 64% after the Hoosier program expanded. There were slight declines in Hispanic and Black student participation. In 2023-24, Black students made up 9% of choice students and 13% of public-school students.

Grade-level data additionally reveals that kindergarten students have typically shown the highest rates of participation in the newly established universal programs. That could be because the availability of private school seats is also likely highest in kindergarten, researchers said.

In Iowa and Arkansas, respectively, 21% and 31% of private school funding recipients were entering kindergarten. Indiana saw its kindergarten enrollment more than double after expansion, and Arizona experienced an eightfold increase in voucher participation among kindergartners immediately after expansion.

Private school choice programs predominantly serve lower- and middle-income households, per the FutureEd report. But researchers found that participation among higher-income families increased in 2023-24 in every state where eligibility expanded and income information was available.

In Florida, nearly half of the state’s new private school funding recipients came from families earning over 400% of the federal poverty level (about $125,000 for a family of four), while a third came from families eligible for free or reduced lunch, after the program expanded in 2023-24 to include all families in the state.

Indiana’s share of higher-income families also grew, with 6% of voucher recipients living in households earning more than $200,000, and 55% earning less than $100,000. Before the program’s expansion, those figures were 1% and 66%.

In Ohio, 67% of families in the state’s universal private school choice program were low-income before the program was expanded to include all families. After the expansion, the figure dropped to 17%, in 2023-24.