Report Finds ESA Program Growth Is Stabilizing

A non-partisan research organization, the Common Sense Institute, released its second quarterly update on Arizona’s Empowerment Scholarship Account (ESA) program this week, showing that growth in the program is stabilizing.

The Common Sense Institute (CSI) updated its analysis of one of the nation’s most universal school choice programs.

CSI looked into enrollment patterns, cost drivers, transparency, and demographic participation in an effort to “support thoughtful dialogue as Arizona navigates education policy and budget priorities in a changing demographic landscape.”

“The ESA program is transitioning from early-stage expansion to more steady usage among Arizona families,” said Glenn Farley, Director of Policy & Research at CSI. “As enrollment growth steadies and cost growth slows, policymakers should focus on ensuring the program is properly and efficiently implemented for the families who rely on it.”

CSI Key Findings:

Projected Costs: ESA program spending is expected to reach $939 million in FY 2026, up from $882 million this year, accounting for approximately 8% of Arizona’s $10 billion K–12 education budget. Notably, only about half of all costs are attributable to Universal-eligibility students (~$460M).

Enrollment Nearing Capacity: CSI projects enrollment will reach between 86,500 and 89,500 students this fiscal year, increasing slightly to 91,500 in FY 2026. The rapid expansion phase is over, and future growth will depend on students transferring from public schools.

Demographic Diversity: 56% of ESA students live in ZIP codes with median household incomes between $75,000 and $150,000. An estimated 18% are nonwhite, and nearly 13% live in rural communities.

Operational Progress, with Ongoing Challenges: The Arizona Department of Education approved 88% of ESA transactions in Q4 2024—an improvement from the prior period—but administrative backlogs and high transaction volumes remain a concern.

Demographic Trends May Ease Pressure: CSI forecasts a gradual decline in overall K–12 enrollment statewide, which could temper long-term demand and help balance costs across both ESA and traditional public education.