How Arizona Is Shaking Up Education and Making College More Affordable and Accessible
June 4, 2014

Student loans are anticipated to keep rising over the years to come and we know that lower income families are hardest hit by this type of debt. But Arizona is making meaningful inroads into ensuring that educational opportunities, including access to college without onerous debt, are available to all. In 2011, Arizona launched a program called Empowerment Scholarship Accounts (ESA). This program allows access to better and more customized education from the moment school starts all the way to college.

Arizona university representative

Arizona is helping make college more affordable
Image source: US Army Corps of Engineering via Flickr Creative Commons

How the ESA Program Works

The ESA initially was only for families with special needs children but has since been expanded to cover low income families in less than stellar schools, children with parents on active duty in the military and foster care kids. There are roughly 220,000 kids in Arizona eligible. The program offers 90% of the cost the state pays to educate a child to be deposited into an educational savings account that comes with a debit card.

Parents who choose to pull their children out of a state-funded school can use the funds toward private school tuition, tutoring, homeschool materials, textbooks and other costs of educating their children outside of the Arizona public education system. Research on the AZ ESA program shows that 66% of parents use their ESA funds in the same manner as standard education vouchers. And another 34% spread the money among several different options that also include therapy for special needs that isn’t fulfilled via the school system.

How ESA Is Helping with Student Loans

This all seems well and good for the younger kids, but what (you may wonder) does this have to do with student loans? Special needs children receive from $10,000-$26,000 annually in ESA. For non-special needs families, the awards are closer to $3,000 per year. How this helps is that unused funds can be rolled into 529 plan college savings accounts.

So, for instance, if you live in Arizona and opt for the ESA rather than a traditional learning program and only utilize half of your allotment, you would be able to put aside $1,500 per year times 12 years of schooling, or $18,000. That can take a dent out of college debt. And if you have a special needs child, you’ll get significantly more and may be able to set aside much more into a college account. According to state data, roughly 26% of funds go unused each year and are eligible for rollover.

How to Find Out if You’re Eligible and Apply

If you live in Arizona, you may be eligible depending on your financial circumstances, if you or your spouse are in the military, if you’re zoned for a school that’s been rated D or F, have a foster child or have adopted a foster child or have a special needs child. For a quick overview of the ESA program, click here to read their brochure.

Applications are accepted beginning each January 1st and the deadline is each April 1st. If you miss this window, you must wait until the next year to apply. Click here for some FAQs about Arizona’s ESA. For more information on each qualifying criteria, click here to go to the ESA applicant page then scroll down to look at the five categories.

No matter where you go to college or how much or little you have to borrow, sign up for’s free student loan tool to track and optimize your debt.