(INDIANA CAPITAL CHRONICLE) — As Indiana’s private school voucher system continues to grow, a new report suggests other states are taking note and increasing public dollars for private education as well.

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

The 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 2025-2026.

After expanding the Indiana’s Choice scholarship program in 2022, state lawmakers further expanded the voucher system in 2023 will be almost universal and open to almost all Hoosier families.

Since the changes came into effect, scholarship eligibility — which allows families to receive vouchers to attend private schools — expanded to include households with incomes up to 400 percent of the amount needed 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 also tacked on more than $1 billion for a major expansion of private school vouchers that boosted Indiana’s funding Choice Scholarship by 69% in the first year and by 14% in the second year.

The last state voucher report showed that enrollment in the private school voucher program increased by about 32 percent in the 2023-24 school year, marking a historic leap of one year.

“Never in the history of American public education has there been so much money available to parents to pay for private 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, anticipated his own proposal to completely overhaul Indiana’s private school vouchers with a grant program that allows all Hoosier families — regardless of income — to choose where to educate their students.

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

How the funds are allocated

Indiana’s state-funded program enrolled a record 70,095 students in 2023-24, costing taxpayers $439 million — about 40 percent more. than the $311 million spent on vouchers the previous year.

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

However, the ways in which 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 need-based funding or give more dollars to lower-income families.

This includes Utah’s new Universal Education Scholarship (ESA) program, launched this school year, which gives preference to students from families with incomes at or below 200 percent of the poverty line ($62,400 for a family of four). Due to high demand and limited places, all students awarded ESAs to date fall into that income group, according to FutureEd.

Indiana does neither; Household income only needs to stay below the 400% cap related to qualifying for the federal free or reduced-price lunch program.

Others, such as Florida and Arizona, cover all applicants, regardless of family means, with no limits on the number of students funded or the amount awarded.

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

Indiana vouchers provide 90 percent of the amount of state funding a public school corporation receives for each student or cover all tuition and fees, whichever is less. The average award value 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 the same 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 every student the same as their public school counterparts.

The Oklahoma and Ohio programs rank the amounts based on a family’s income. Ohio further increases award amounts for high school students to $8,407.

Most of the funds were used for tuition. Indiana and Ohio pay tuition directly to the schools. Iowa mandates that ESA dollars be spent on tuition before other approved educational expenses such as tutoring or textbooks. Arkansas limits funds to tuition, supplies, uniforms, or other necessary school expenses, and most are spent on tuition. Although Arizona gives families the most spending freedom, 85 percent of funds were spent on tuition, tutoring, curriculum materials or textbooks in 2023-24.

“This marks a sea change in K12 education policy,” FutureEd director Thomas Toch said in a statement. “This is the first time this level of public funding has been available to US parents to pay for private school tuition or home school expenses. And it seems to be expanding even 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 use vouchers?

In Indiana — where 90 percent or more of students at 178 private schools attend with public funding — the 357 schools that accept public dollars are mostly concentrated in metropolitan and suburban areas.

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

The FutureEd report indicated a 2024 study published by EdChoice, an Indiana school choice advocacy group, that found 19 percent of parents listed proximity to home as one of the top three reasons for choosing their children’s private schools. A higher percentage of parents cited academic quality, safe environment, and moral/character education as the main reasons for selecting private schools.

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

In Ohio, the share of white students receiving public private school funding under the universal program rose from 66 percent to 82 percent after the program expanded, with nearly 90 percent of new entrants identifying as white, while the percentages of students of color and Hispanics declined. . Before Ohio expanded the program, the racial makeup of students more closely mirrored the makeup of public school students, the FutureEd report pointed out.

In Indiana, the proportion of white students increased, but much less than in Ohio, rising from 62 percent to 64 percent after the Hoosier program expanded. There were slight declines in Hispanic and black student participation. In 2023-2024, students of color represented 9% of selected students and 13% of students from public schools.

Grade-level data further show that kindergarten students typically had the highest participation rates in the newly established universal programs. This could be because the availability of places in private schools is likely to be highest in kindergarten, the researchers said.

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

Private school choice programs primarily serve low- and middle-income households, according to the FutureEd report. But the researchers found that participation by higher-income families increased in 2023-24 in every state where eligibility expanded and income information was available.

In Florida, almost half of the state’s new private school funding recipients came from families earning more than 400 percent of the federal poverty level (about $125,000 for a family of four), while one-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 increased, with 6 percent of voucher recipients living in households earning more than $200,000 and 55 percent earning less than $100,000. Before the expansion of the program, these 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.