The New Hampshire House voted Thursday to expand the state’s Educational Freedom Accounts program by raising the income eligibility, despite critics' concerns that the number of low-income students participating in the program has dropped by 10%. 

Educational Freedom Accounts, or EFAs, provide vouchers that families who opt out of public school can use to pay for private school tuition or eligible homeschool expenses. The program is currently open to families whose income is at or below 350% of the federal poverty level. The legislation that passed the House on Thursday and will now move to the Senate would increase the income eligibility to 500% of the poverty level. 

This year, 44% of students enrolled in EFA are eligible for free or reduced-price lunch, down from 54% during the fall of 2021, the first year the program operated, according to data from the Department of Education. The percentage of free and reduced-price lunches, which are available to students whose families earn 185% of the poverty level or less, is used to gauge the number of low-income students in a school district. 

That reduction is one of many factors contributing to a fierce debate over the EFA program. The debate also focuses on whether the program saves money or siphons it from public schools, transparency issues and whether vouchers result in higher-quality education.

To critics of the EFA program, the drop in the percentage of low-income students is alarming. 

“This is no longer a program that is seeking to help families experiencing poverty,” said Sarah Robinson, education justice campaign director at Granite State Progress, a progressive advocacy organization.

But proponents of the program point out the rate of low-income students is much higher than  the state average of 26%. 

“I don’t see it as a low percentage at all…” said Kate Baker Demers, executive director of Children’s Scholarship Fund NH, a nonprofit that administers the voucher program. “The EFA program looks like one of our state's most economically disadvantaged school districts, like Claremont, Nashua or Manchester.”

Cost savings, or new spending?

Since 2021, the state has spent $44.9 million on the EFA program, according to Education Department data. 

“The costs were much higher than expected,” said Bruce Mallory, project manager for the School Funding Study at the University of New Hampshire’s Carsey School. 

The high costs have been in part due to the large number of participants. Enrollment in the EFA program grew 39% from 2022 to 2023, DOE data show. As of Feb. 1, 4,770 students were enrolled in EFA, according to Kimberly Houghton, spokesperson for the DOE. 

The money for the program comes from the state’s Educational Trust Fund, which collects money from the lottery, taxes and other sources to fund “an adequate education” for New Hampshire’s children. The definition of an adequate education is the subject of ongoing lawsuits that allege the state is not meeting its constitutional obligation to provide educational funding.

In fiscal year 2024, the state pays school districts a base rate of $4,100 per student, with additional funding for students who are low-income, special education or English language learners. Overall, the state provides about 31% of education funding, with the remaining 70% generated from local property taxes. 

The idea of the EFA program is to allow this state funding to follow the student. If a student enrolls in private school or is homeschooled, their portion of state funding — an average of $5,255 this school year — can be used to pay for tuition or other eligible education expenses.  

Proponents say this approach saves money, since school districts don’t have to generate their portion of the cost of educating these children. In 2022, the DOE said the cost to taxpayers would be $65 million if all students in the EFA were in public school. Advocates also point out that the state’s Educational Trust Fund is operating at a surplus of roughly $200 million, in part due to declining enrollment in public schools as the state’s demographics shift, according to the New Hampshire Fiscal Policy Institute. 

Opponents of vouchers argue that the program is actually siphoning public funds, because the vast majority of participants were not former public school students. This year, 75% of students in the program were existing homeschool or private school students, according to Reaching Higher New Hampshire, a nonpartisan nonprofit focused on education in the Granite State. 

“These programs really benefit families who have already chosen to leave their public schools,” said Christina Pretorius, policy director for Reaching Higher NH. 

Because these students were not enrolled in public school, and therefore not eligible for state education funding prior to the program, a portion of EFA expenses represent new spending, Pretorius said, money that “was taken directly from the Education Trust Fund, and could have gone to public schools and charter schools.”

Expanding eligibility would drastically increase that spending. Increasing the income limit to 500% of the poverty level could result in an annual program cost of $66 million per year, according to Reaching Higher. 

Lack of data on student success

Another criticism of the EFA program focuses on transparency, particularly in regard to students’ academic outcomes. There is no legal obligation for EFA participants to report their academic successes through benchmarks such as standardized testing. 

National data shows that students in voucher programs often have lower academic achievement than their peers in public school, according to the Brookings Institution, an educational policy think tank in Washington, D.C. 

“Voucher programs nationally are absolutely catastrophic for students,” said Pretorius. 

Baker Demers, of the Children’s Scholarship Fund, counters that private school students in New Hampshire have higher SAT scores, on average, than their public-school counterparts. In addition, a Children’s Scholarship Fund survey of 989 EFA parents last year found that 83% agree or strongly agree that their child made academic improvements under the program, she said. 

Last November, a legislative oversight committee for the EFA program recommended — among other things — that the state identify metrics that can be used to track student accountability. That has not yet happened. 

“The expansion of a program that we don’t have any data on seems counterintuitive,” said Robinson. “That’s not how we spend tax dollars in our state traditionally.”