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What is an education savings account (ESA)? A complete guide

Parent saving money on educational costs with an ESA

For many families, having their child attend a local public school can feel like a trade-off. Stay in the public system even if it doesn’t quite fit, or step outside it and take on the financial burden of educational costs alone.

Education savings accounts (ESAs) change that equation. ESA programs are making school choice possible in a big way. They give parents the flexibility to decide how their kiddo learns, and they open the door to high-quality educational opportunities for kids who might be better off with something different from traditional public school.

If you’re looking into an ESA program in your state, you’ll want to know what exactly education savings accounts are, how state-funded ESA programs work, and how you can use them to build an education that fits your child. Read on — this guide covers it all.

TL;DR: What education savings accounts mean for your family

  • Education savings accounts (ESAs) help you pay for education beyond traditional public school, without covering all the costs by yourself.

  • State-funded ESAs allow you to use public education funds for approved options like private schools, online programs, tutoring, and special education services.

  • These state-funded programs give you more flexibility and control over how your child learns.

  • Coverdell ESAs are different. They’re a personal tax-advantaged account that you fund yourself to help cover education expenses over time.

  • This guide focuses mainly on state-funded ESAs: how they work, who qualifies, and how families use them in practice, including with ESA-approved online schools like bina in Arizona and Wyoming.

What is an education savings account?

In the United States, an education savings account is designed to let parents put aside or access money specifically for education expenses for their children.

However, the term “education savings account” is used in two different ways. Let’s break things down so you know what each category of ESA offers:

  • State-funded education savings accounts: These programs use public education dollars to support K–12 learning outside the traditional public school system

  • Coverdell Education Savings Accounts: These are personal, tax-advantaged savings accounts that families fund themselves

Both support education, but they serve distinct purposes and offer different benefits. Think of a Coverdell account as a way to make saving for your kiddo’s future education costs easier. You set money aside over time and use it later to help cover education costs.

This makes it easier to pay for education and learning resources, but it doesn’t come with public funding.

State-funded ESAs are all about empowering families now. They give parents the freedom to choose how their kids learn by unlocking funds normally spent on public schools. Instead of those dollars funding a public school education that’s not a good fit for your kiddo, you choose what other education services those dollars are spent on.

How state-funded education savings accounts work

If you’re exploring alternatives to your local public school, a state-funded ESA is usually the right place to start. These education savings accounts, also known as empowerment savings accounts, were created to increase school choice and access.

They represent a pretty groundbreaking shift in education. By making education funds accessible for kids who don’t attend public school, the families who want an alternative for their child can unlock some financial support. That means more money to spend on things like a really high-quality homeschool curriculum, tutoring or learning therapy services, or tuition.

In states that offer these programs, you can step away from full-time public school enrollment yet still access public education funding. Essentially, rather than tying funding to a specific school system, state-funded ESAs allow funding to follow the student.

These programs are already available in many US states, and access is expanding as more families look for alternatives to the standard model.

Each state might have its own unique name, for example:

  • Empowerment Scholarship Account (Arizona)
  • Education Freedom Account (New Hampshire)
  • Education Scholarship Account or Texas Education Freedom Accounts (Texas legislation)

There are also different rules for each program. But the core idea is the same for all state-funded ESA programs. You can opt out of full-time public school enrollment and use state education funds to support an alternative learning path.

For many parents, an ESA can completely shift how their kiddo learns in all the right ways.

Why families choose state-funded education savings accounts

For families exploring alternatives to public school, cost is often the biggest barrier. Fees for tuition, online programs, tutoring, and specialized services can add up quickly.

State-funded ESAs help break down that barrier.

These programs give you the ability to:

  • Choose an educational setting that fits your child.
  • Access public education funds without staying in a one-size-fits-all system.
  • Build a customized learning plan using approved services and providers.
  • Pay for education without paying twice through taxes and tuition.

For some families, the motivation is academic. For others, it might be social, emotional, or practical. Your kiddo might need a quieter learning environment, more flexibility in their day, or a pace that allows them to really understand a topic before moving on.

Alternatively, your child may benefit from learning online or in hybrid settings, where they can focus more deeply and connect with a small group of students. These environments give your kiddo space to learn without the pressure of constant transitions or large class sizes.

And for families who travel frequently, you gain the kind of flexibility that can make learning feel more manageable and sustainable.

State-funded ESAs make these learning choices possible without requiring families to step away from public education support entirely.

The best part is that state-funded ESAs don’t dictate what “good education” looks like. They give families the space to decide for themselves. That sense of empowerment is what draws many parents toward a state-funded ESA. Education becomes something you actively design, not something you passively accept.

What you can use a state-funded education savings account for

Eligible expenses are different from state to state, but most ESA programs cover a wide range of K–12 education costs.

Commonly, qualified education expenses include:

  • Private school tuition
  • Accredited online school programs, like bina
  • Homeschool curriculum and learning materials
  • Academic tutoring and learning centers
  • Computer equipment, software, and educational technology
  • Therapies and support services for students with special needs

Some states also let you use ESA funds for testing fees, enrichment programs, extracurricular events, or part-time classes.

But it’s also important to know what ESAs don’t cover.

These funds can’t be used for things like the following:

  • Clothing or general personal items
  • Travel or vacation costs
  • Entertainment purchases unrelated to education
  • Non-educational electronics

Because ESA funds come from public sources, it’s really important that you follow spending rules carefully. If you don’t, you may have to pay the money back, or you’ll have funding access cut off.

Who qualifies for a state-funded education savings account?

Eligibility rules are set at the state level, which means they’re different across states. That said, many ESA programs share similar requirements.

To access more state-funded ESAs, students typically must:

  • Live in the state offering the ESA program
  • Not be enrolled full-time in a traditional public school
  • Qualify under the state’s ESA rules, which may include things like prior public school enrollment, learning support needs, or participation in a school choice program

Not all states offer ESAs universally. In some states, ESA programs focus on supporting families whose children need a different kind of learning environment, including those receiving learning support or transitioning away from a traditional public school.

As these programs are evolving quickly, the best source of up-to-date information is your state’s education agency or ESA program platform provider, such as Odyssey.

How to apply for a state-funded education savings account

Applying is easy. You’ll submit an application through your state’s ESA program. Once you’re approved, you’ll gain access to the funds available for your kiddo’s education through an approved platform, mobile app, or prepaid card.

In some cases, you may need to submit invoices and receipts, so be sure to keep a record of your child’s educational expenses. If you can’t confirm your spending is legitimate, you may be asked to pay the money back.

Academic reporting is also common. Florida’s Family Empowerment Scholarship ESA, for example, requires that students take a state assessment or nationally norm-referenced test each year. These requirements help to make sure parents use public funds responsibly, so ESA programs can continue to give families meaningful flexibility.

Using a state-funded ESA with an online school like bina

Many families that want a more flexible learning journey use state-funded ESAs for accredited online schools that meet state requirements.

bina is one of these approved providers.

bina is an online international school designed for families who want a student-centered learning experience that helps kids build the skills they need to be ready for the future. With a focus on social and emotional learning, kiddos learn how to better understand themselves so they can thrive as adults. And with students from all over the world, our classrooms are diverse, vibrant, supportive environments where differences are celebrated.

Because bina is an accredited school with clear progress tracking, it aligns well with state-funded ESA requirements. Families can use ESA funds to cover tuition while meeting their state’s expectations around academic engagement.

But what really sets bina apart is how we pair that structure with a broader view of learning. bina students learn in small classrooms and follow a consistent interdisciplinary framework, so they see how their learning applies to the world, not just the classroom.

Yet unlike conventional schooling, bina kids aren’t tied to a single physical location or rigid daily schedule. In this sense, learning happens in a way that supports focus, curiosity, and balance, rather than rushing from one bell to the next.

bina currently participates in state-funded ESA programs in Arizona and Wyoming and is an approved service provider in Utah. This makes it an accessible option for families in those states that want an alternative to traditional public schooling.

For families exploring how to use ESA funding with an online school, bina’s ESA page provides state-specific guidance and next steps.

Investing in choice, not just education

Education savings accounts, especially state-funded ESAs, give you more room to make thoughtful choices about how and where your child learns.

For many parents, the hardest part isn’t deciding to look beyond traditional public school. It’s understanding what options are available and how to access the funding that makes those options possible. That’s where guidance matters.

bina is an ESA-approved online international school for elementary and middle school students, and our team works directly with families to help you understand your ESA options, eligibility, and application steps. Book a call today and learn more about learning at bina.

Accredited, full-time school for 4-12 year olds worldwide, online


Attentive education that fits your family everywhere