Little Evidence New EFA Rules Will Save State Money
Family Council has recently spoken to a few policymakers who believe Arkansas’ Educational Freedom Account (EFA) program needs to cut costs. Some hope a new set of rules from the Department of Education will do that. But Family Council has analyzed the rules, and there is very little evidence the new rules will help the State save money.
Arkansas created the EFA program in 2023, making it possible for students to use public funds to pay for an education at a public or private school or at home.
Most students in the EFA program are eligible for up to 90% of the State’s per-student “foundation funding” that it spends on public school students each year. Generally speaking, this means each EFA student gets between $6,000 and $7,000 per school year.
Thousands of homeschool students have taken advantage of this great program and test scores show they are excelling.
But the Arkansas Department of Education has approved new administrative rules restricting how EFA funds can be spent on extracurricular activities, establishing complicated preapproval and reimbursement requirements for EFA funds, and reducing the maximum balance families can carry in their EFA accounts.
Our team has put together a brief overview explaining some of the ways the new rules make the EFA program worse for homeschoolers. You can download it here.
The State’s transparency website reports that since July 1, 2025, Arkansas has spent over $245 million on the EFA program. We believe that money is a good investment in students and families across Arkansas, but some people may feel the State cannot sustain the program every year without cutting costs.
Here is a brief look at some of the reasons why the State of Arkansas won’t save money by restricting homeschoolers in the EFA program.
1. Most EFA money goes to private school students and private school tuition.
Since the program began in 2023, most EFA money has paid for private school tuition.
In fact, state reports show that last year, four out of every five EFA dollars went toward private school tuition and fees.
Homeschoolers spend a fraction of the EFA money that private school students do — which means the State would save very little money by restricting homeschoolers.
2. Of the EFA money that homeschoolers spend, 90% of it is on core educational expenses.
Some people believe the State could save money by preventing homeschoolers from spending EFA money on athletics and extracurricular programs, but state law already caps spending in these areas.
Last year homeschoolers spent only 8% of their EFA money on “enrichment” activities like PE and athletics, music and art, or other extracurricular activities. The rest of the money paid for homeschoolers’ educational supplies, curriculum, class fees, tutoring, and other educational expenses authorized under the LEARNS Act.
Preventing homeschoolers from spending EFA money on certain athletic programs is unfair. It fails to track with state law, and it would save the State very little money.
3. The new preapproval process in the EFA rules adds bureaucratic barriers for families spending Educational Freedom Account money on legitimate expenses, but those barriers won’t help the State save money.
State law and state rules already outline approval and reimbursement processes for EFA spending. The new rules add bureaucracy that will make those processes slower and more frustrating for homeschool families.
Homeschool students often must itemize their EFA transactions for approval, because one family may use multiple curriculum providers, tutors, or suppliers. Each of those transactions may be handled separately.
EFA funds used for private school supplies and equipment do not have to be preapproved by the Department of Education.
Many homeschoolers tell us the current approval process for their EFA spending can take weeks or even months. The new preapproval requirements in the EFA rules would simply slow that process down even more.
There is little reason to believe that making the process slower or more cumbersome would save the State money.
4. Reducing an Educational Freedom Account’s maximum balance won’t change the amount of money that the State awards to EFA students each year.
Under the LEARNS Act, most students in the EFA program are eligible for up to 90% of the State’s per-student “foundation funding” that it spends on public school students.
Practically, this means each EFA student gets between $6,000 and $7,000 per school year.
Currently, if students don’t spend all of their EFA money, the surplus can roll over from year to year. Unspent EFA money can grow to a maximum balance of $20,000. This helps families with young children save EFA money for future educational expenses.
The new rules reduce that maximum balance from $20,000 to $8,500.
Reducing the EFA account balance might sound like it would save the State money, but the rules only apply to surplus EFA funds that families don’t spend by the end of the year.
That means it won’t save the State any money if students spend all of their EFA funds each year, and it won’t reduce the amount of money that the LEARNS Act allocates for each student every year.
If the State of Arkansas is concerned about EFA spending, there may be ways to adjust the EFA program and cut costs. Unfortunately, these new rules fail to do that.
Articles appearing on this website are written with the aid of Family Council’s researchers and writers.
