New Report: Private Schools Keep Tuition Low as Arizona ESAs Cover Up to 100% of Cost

Just days after Arizona Gov. Katie Hobbs announced a plan to toss tens of thousands of families off the Empowerment Scholarship Account (ESA) program, a new Goldwater Institute report finds that universal ESAs have successfully made private education affordable to all families, regardless of income.

Indeed, contrary to the narrative of Gov. Hobbs and her acolytes—who have proposed a government takeover of tuition rates after accusing Arizona private schools of “price gouging” families—new findings reveal that the state’s private school providers have kept tuition rates far lower than the cost of public school per pupil. Additionally, ESAs now cover nearly 100% of tuition at the majority of private schools throughout the state. Among other findings, moreover, private school tuition rates have risen less amid ESA expansion than have the costs to taxpayers of public schools—all as explored in the new report:  Universal Opportunity: How Arizona’s Empowerment Scholarship Accounts (ESA) Defied Critics and Unleashed Affordable Private Education for All, Part I.

Indeed, through an analysis of over 160 private schools operating before and after the 2022 expansion of Arizona’s ESA program, this report offers the first direct, substantive analysis of the impact of universal ESA eligibility on the affordability of private education. Specifically, among its key findings, this report documents the following:

• The typical ESA award covers nearly 100% of tuition at the majority of private elementary and middle schools in Arizona. The baseline ESA award level of $7,000+ per child compares to the median elementary and middle school tuition rate of $7,400 as of 2023-2024.
• Private schools in Arizona did not significantly increase their tuition rates in response to the universal ESA expansion. After accounting for the U.S. inflation rate over the same period, median private school tuition rates rose yearly between 0.25% and 1.25% (depending on grade level) in real terms over the course of the 2022-2023 and 2023-2024 school years. Compared to the Phoenix metro area inflation rate, median private school tuition rates actually declined in real terms over the same period.
• Tuition rates at Arizona private schools rose less than per-pupil spending at Arizona public schools in response to universal ESA expansion. Despite claims that ESAs would trigger dramatic tuition inflation among private schools, it is public schools that have continued to raise the costs of education most rapidly. Comparing pre- and post-universal ESA expansion, the median private elementary and middle school tuition increase over two years ($1,050) is significantly less than the officially projected increase ($1,500) in per-pupil spending on Arizona public schools over the same period.
• Universal ESA expansion dramatically increased the affordability of private education for middle class and lower-income families. For each newly eligible ESA participant, a family can now receive over $7,000 of annual award funding to put toward private education, compared to a national inflation-driven increase in Arizona private school tuition of just $1,050 over the past two years.
• ESAs and private education remain significantly less costly to state taxpayers than the public school system at all grade school levels. The typical ESA award (over $7,000) and the median private elementary and middle school tuition rates ($7,400) are several thousand dollars less than taxpayers’ per-pupil spending on Arizona public schools (over $14,000).
• Various private schools explicitly advertise their tuition rates as less than the state’s baseline ESA award amount, ensuring parents have additional ESA funds to put toward extra tutoring, transportation, or other supplementary uses for their children.
• Universal ESAs have already led to the establishment of new high-quality educational offerings, including multiple new campuses operated by one of the state’s highest academically performing public K-12 charter networks, Great Hearts.

ESA opponents have suggested that children should be restricted to government-operated schooling options unless their families can independently buy their way out of them. Failing that, ESA opponents have sought to bring private school providers under the control of the state—subject to the same artificial barriers to quality erected by teachers unions and their allies that have kept America’s educational achievement stagnant for decades.

But now, thanks to the growth of universal school choice in Arizona and across the nation, students and their families have access to high-quality, private education without the financial barriers they have faced for so long.

Read the full report here.

Matt Beienburg is the Director of Education Policy at the Goldwater Institute. He also serves as director of the institute’s Van Sittert Center for Constitutional Advocacy.