Arkansas Education Freedom Accounts: Empowering Families Through School Choice

The Arkansas Education Freedom Account (EFA) program, established through the Literacy, Empowerment, Accountability, Readiness, Networking, and School Safety (LEARNS) Act in 2023, represents a significant shift in the state's approach to K-12 education. This initiative aims to provide families with greater flexibility and control over their children's education by offering state funds for various educational expenses. As school choice programs gain traction nationwide, understanding the intricacies of Arkansas' EFA, its eligibility criteria, funding mechanisms, and potential impact, is crucial for parents, educators, and policymakers alike.

Understanding the LEARNS Act and the EFA Program

The LEARNS Act brought about comprehensive changes to Arkansas' K-12 education system. While it addressed various aspects such as teacher salaries, school safety, and broadband access, a key feature was the introduction of the Educational Freedom Account (EFA) program.

The EFA program allows families who choose not to enroll their children in public schools to receive state funds that can be used for approved educational expenses. These expenses include private school tuition, tutoring services, testing fees, educational supplies, technology, and transportation. The program aims to empower families to make educational choices that best suit their children's individual needs and learning styles.

EFA Funding: How It Works

The EFA program operates on a scholarship model, with the amount of funds each participating student receives being equal to 90% of the per-student state funding formula dollars from the prior year. For the initial years of the program, the scholarship amounts were:

Year 1 (2023-2024): $6,672
Year 2 (2024-2025): $6,856
Year 3 (2025-2026): $6,864

It is anticipated that most recipients will receive approximately $6,856.

These funds are disbursed quarterly throughout the school year, providing families with a steady stream of resources to support their children's education. The funding is deposited into a secure account managed by ClassWallet, a vendor contracted by the Arkansas Department of Education (ADE). Parents must register an account on the ClassWallet portal to manage and distribute the funds to participating educational providers.

Eligibility and Priority Windows

The LEARNS Act dictates a three-year timeline for phasing in universal eligibility for the EFA program. This phased approach ensures a controlled rollout and allows the state to manage the program's financial impact effectively.

Year 1 (2023-2024): Eligibility was limited to specific populations, including students with disabilities, first-time kindergarteners, children in foster care, children in active-duty military families, homeless students, and children coming from F-rated public schools or Level 5 school districts (the lowest performing schools, as determined by the state). Students previously participating in the Succeed Scholarship program were also eligible.
Year 2 (2024-2025): Eligibility expanded to include all students eligible in year one, as well as first-graders, students in D-rated public schools, children of veteran parents, parents in the military reserves, first responders, and law enforcement officers. Additionally, allowable uses for the EFA broadened to include the kinds of expenses typically incurred by homeschooling families-which effectively made those families newly eligible.
Year 3 (2025-2026): The EFA is available to all school-age children in Arkansas. Participation is only limited by the amount of funds appropriated for the program. Under the governor’s current proposed budget, a maximum of 39,600 students would be eligible to participate in the program.

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To manage the application process, the ADE has established priority windows. Applications are not reviewed on a first-come, first-served basis. Instead, they are evaluated and approved based on funding priority categories within designated application priority windows. The application portal will be closed from May 26-June 1. If you have any questions about your application status, funding priorities, or next steps, please don't hesitate to reach out - we are here to help and truly appreciate your patience.

Allowable Expenses and Restrictions

EFA funds are designed to be flexible, allowing families to use them to support their child's unique educational journey. Most families spend their fees on: tuition and fees (for private school families, they should spend on this first), tutoring, therapy, curriculum, assessments, instructional materials, uniforms, co-curricular and extra-curriculum classes, school supplies, technology, and transportation. However, there are certain restrictions on how the funds can be used:

Funds cannot be spent on non-education items such as food, cleaning materials, or accessories.
There are spending caps on extracurricular classes (defined as PE classes and classes typically found outside of classrooms, e.g., sports, ninja camp, gymnastics) and in-state field trips.
Act 920 of 2025 prohibits EFA participants from using more than 25% of their allocated funds for extracurricular activities, physical education activities, or educational field trips within the state of Arkansas.
The biggest concern involved prohibiting EFA funds from being used for team sports.
Technology purchases exclude TVs, video games, and cell phones.

Participating Schools and Service Providers

A key aspect of the EFA program is the network of participating schools and service providers. These institutions and individuals must meet certain criteria to be approved to receive EFA funds. As of the current school year, a reported 128 private schools have accepted EFA students. The Arkansas Department of Education (ADE) is required, by Arkansas Code § 6-18-2510, to provide an annual report on the Education Freedom Accounts (EFA) program to the Arkansas Legislative Council and the House and Senate Education Committees. This report includes a list of all participating schools and participating service providers.

Financial Implications: Costs and Savings

As expansive school choice programs proliferate nationwide, lawmakers and other stakeholders want to know how these programs will impact their state’s budget. To measure Arkansas’s school choice program’s net fiscal impact on the state budget, one must estimate both the total program costs and the offsetting savings from students who would have otherwise attended public schools.

For each participating student who would have otherwise enrolled in an Arkansas public school, the state’s EFA program generates about 10% in net state savings because EFA scholarship values are 90% of per-student public school formula funding from the prior year. On the other hand, EFA students already using private education represent a pure cost to the state because they weren’t previously receiving any public resources.

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Year One (2023-2024)

In 2023-2024, there were 5,548 total EFA users. Participants received $6,672 each unless they were previously enrolled in the Succeed Scholarship program, in which case they received $7,413. EFA users who would have otherwise attended public schools generate state savings that counterbalance some of the total cost. Of the total participants, 630 came from the Succeed Scholarship program, and an estimated 18%-999 students-were enrolled in public schools in the immediate prior year. Because prior Succeed Scholarship participants were required to be previously enrolled in public schools to be eligible for the program, they are also counted as switchers. After applying the switcher assumption to kindergarten EFA enrollees, the final estimate for the number of switchers for year one of Arkansas’s EFA program is 1,928, or 34.8%. By not attending public schools, each switcher student saves the state $7,618 in funding formula dollars. Therefore, switchers generated a total savings of $17.2 million to the state. After accounting for these offsetting savings, the estimated net cost of Arkansas’s EFA program in year one was $17.7 million.

Year Two (2024-2025)

In 2024-2025, 90% of students participating in year one continued using the program in year two. Under the expanded eligibility criteria and higher enrollment cap, about 9,300 additional students were added to the program. As such, there were 14,297 students using the EFA in the 2024-2025 school year. They received $6,856 each, with previous Succeed Scholarship recipients still receiving $7,413. According to the data obtained by the Arkansas Times, 18% of all enrollees after the first two years of applications were previously enrolled in traditional public or charter schools. That share is equal to about 2,573 participants. About 31% or 4,432 EFA participants enrolled under kindergarten eligibility. Again, assuming an 18% switcher rate, an estimated 798 of them are switchers. In public schools, each switcher student would have received $7,771 each through the state funding formula in 2024-2025. Therefore, switchers generate a total savings of $30.6 million to the state. After accounting for these offsetting savings, the estimated net cost of Arkansas’s EFA program in year two was $66.9 million.

Year Three (2025-2026)

Since applications have not yet been collected, participation data for year three of Arkansas’s EFA program is unavailable. Because the EFA expands to universal eligibility in the third year, policymakers and researchers expect a large increase in participation. Anticipating this application surge, Gov. Sarah Huckabee Sanders has proposed doubling the state’s EFA budget from the prior year, raising it to $187.5 million and adding another $90 million in surplus revenues in case program demand is higher ($277.5 million in total).

If the total $277.5 million in funding in Gov. Sanders’s proposed budget is used by Arkansas students in year three of the EFA program, a reported 39,600 students would be participating. If the program switcher rate is at the low end of 21%, there would be 8,356 switchers yielding $68.2 million in counterbalancing savings. If switcher rates are at the mid-level rate of 32%, there would be 12,553 switchers yielding $102.5 million in counterbalancing savings. If switcher rates are at the high-end rate of 47%, there would be 18,454 switchers yielding $150.6 million in counterbalancing savings.

It’s also possible that EFA applications won’t meet the full 39,600 scholarship amount available under the governor’s proposed budget in the program’s first year of universal eligibility. In a scenario where the governor’s proposed $90 million in EFA program reserves aren’t needed, the total EFA program cost would be $187.5 million.

As this analysis illustrates, the Arkansas EFA program’s true cost (i.e., net cost) is substantially lower than its total cost. Moreover, even under the maximum proposed participation of 39,600 scholarships, the net costs of Arkansas’s EFA program are affordable when evaluated against the entire state budget. In the first two years, the net costs of the EFA program were at or below 1% of the total state budget.

Application Process

The application for new families and re-application for returning families will launch in early March. Applying for the EFA is easy and should take you less than 10 minutes. Applications for the 2026-2027 school year will open on March 9th.

All families, new and returning will be required to create an account and submit an EFA application for the 2025-26 school year. New and returning families can begin the application process by going to arkansasefa.com. The primary parent or guardian will need to create an account with FACTS. If you already have a FACTS account, simply log in using your existing credentials. For new users, create an account first, then log in through the application portal.

Once logged in, the primary EFA contact will complete the application by providing personal and demographic information. The next section of the application will collect student data, allowing families to add multiple students under the same family login.

Renewal applicants will be asked to answer a few questions about their current experience in the program but will not need to upload additional documents.

New applicants will need to complete the full application and provide proof of Arkansas residency and verification of student date of birth (such as a birth certificate or other official document."Typically, applications can take up to 10 days to process.

To avoid common application challenges, make sure the current address that is listed on your application must match whatever is on the documentation. Documents can include: Drivers’ license Government-issued documents (e.g. Passport)Utility bills - from the past 3 months Tax statementsRent/lease/mortgage statements - from the past 3 months Military orders (e.g.

Families can upload as a PDF or as a JPEG. PDF is preferred.

Application Processing Windows

To make the process as smooth as possible, applications will be reviewed and approved within the following three-week Priority Windows:

Priority Window A: March 3-March 23
Priority Window B: March 24-April 13
Priority Window C: April 14-May 4
Priority Window D: May 5-25
The application portal will be closed from May 26-June 1.
Priority Window E: June 2-June 22
Priority Window F: June 23-July 13
Priority Window G: July 14-August 3
Application will close on August 15, 2025.

Funding Priority Categories

When applications are processed, they are reviewed in the following order:

Priority 1: Returning EFA Participants - Students who are continuing in the EFA program.
Priority 2: Students with Specialized Needs - Students who require additional educational support.
- Succeed Scholarship recipients
- Students with a disability under IDEA
- Homeless or foster students
Priority 3: Students from Underserved Educational Environments - Students previously enrolled in a school rated D or F in the previous academic year.
Priority 4: Military, First Responders, & Law Enforcement Families - Students who are, or whose parents are:
- Active-duty military
- Veterans
- Arkansas National Guard members
- Law enforcement officers
- First responders
Priority 5: Early Education Students - First-time kindergarten.
Priority 6: New Students Without a Priority Qualification - Students who do not fall into any of the above categories.

Academic Accountability

Participating private schools must ensure that qualified students in grades three through ten (3-10) who have received educational scholarships under this subchapter are held academically accountable by annually administering or making provision for the administration of a nationally recognized norm-referenced test. A student with a disability under the Individuals with Disabilities Education Act, 20 U.S.C. § 1412(a)(10), as it existed on January 1, 2021, and is determined by the private school to need an exemption from standardized testing due to the existence of a significant cognitive disability is not required to take the test required under subdivision (9)(C)(i) of this section. If a student is not required to take the test, a participating private school shall annually make provision for the student to take an alternate assessment approved by the State Board of Education or prepare a portfolio that provides information on a student’s progress to the student’s parent or guardian. The schools must also annually report the scores and other academic progress to the parent or guardian of each qualified student and an independent research organization selected by the division.

Additional Financial Assistance

Many K-12 private schools offer various forms of financial assistance to their families, including scholarships. The details of this assistance will vary from school to school, but some schools have strong philanthropic support to make sure any students with demonstrated need can still attend. If you have a specific private school in mind, be sure to ask them about scholarship options.

Students who enroll in the EFA program with disabilities can also still qualify for the Philanthropic Investment in Arkansas Kids (PIAK) program. Parents and legal guardians can apply for the Education Freedom Account for free! The Philanthropic Investment in Arkansas Kids provides vital funding for eligible students to attend private schools. Funding amount is determined yearly. Families qualify based on household income. Any student whose family income is at or below 200% of the federal poverty line, or about $62,400 for a family of four, is qualified to apply for the PIAK program.

Legal Challenges

The EFA program has faced legal challenges. In June 2024, several public school parents sued, arguing that the EFA program diverts money from public schools. Faulkenberry et al. v. Arkansas Department of Education, No. 60CV-24-4630 (Pulaski Cty. Cir. A prior legal challenge was unsuccessful. On October 12, 2023, the Arkansas Supreme Court ruled 5-1 in Arkansas Department of Education v. Citizens for Arkansas Public Education and Students (CAPES) had argued that the legislature violated the state constitution by forgoing a separate roll-call vote for the emergency clause. A circuit court halted the program’s implementation, but the Arkansas Supreme Court stayed that injunction a month later in Arkansas Department of Education v. Jackson, 2023 Ark. 105, 669 S.W.3d 1. Now deciding on the merits, the Arkansas Supreme Court held that the emergency clause was valid because the House and Senate journals- “the sole evidence of legislative proceedings” and “the official record of the General Assembly’s votes” -recorded a separate roll call vote. Arkansas Department of Education v. Jackson, 2023 Ark.

Reporting Fraud

If you suspect fraud, misuse of funds, or other financial misconduct related to the EFA program, please report it through Arkansas' Education Freedom Account Financial Integrity Hotline.

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