One of the better public policy moves in recent decades has been Education Savings Accounts (ESAs), which allow parents to save in tax-free accounts for anticipated school expenses.
How about college? In today’s Martin Center article, Gary Frankel and Cooper Conway point out that parents can, in some states, use money in ESA accounts for college. They write, “But nobody ever said this flexibility had to end in 12th grade. Fifteen of the 21 ESA programs across the country allow funding to roll over for postsecondary education expenses.”
In Arizona, for example, in 2022, parents spent some $5 million on college expenses.
Frankel and Conway continue:
When Milton Friedman reinvigorated the idea of educational freedom, he envisioned families having access to a true marketplace of educational options. Policymakers can honor Friedman’s vision when designing ESAs by allowing rollover funds to be used not only for college tuition, but also for dual-enrollment costs, apprenticeship costs, industry-recognized credentials, and other expenses related to career pathways and post-secondary education.
Policy makers should take heed.