ESA Iowa: Updated Education Savings Accounts Info for 2025-2026

by Diocese of Des Moines Catholic Schools | March 3, 2025

Initiated in February 2023, the Students First Act makes state funding available for eligible Iowa K-12 students who choose to attend accredited nonpublic schools in the form of an Education Savings Account (ESA) and also provides public schools additional funding for students who live in the school's district but attend nonpublic schools.

"Public schools are the foundation of our education system and for most families they will continue to be the option of choice, but they aren't the only choice," Governor Kim Reynolds said when she signed the Students First Act into law. "For some families, a different path may be better for their children. With this bill, every child in Iowa, regardless of zip code or income, will have access to the school best suited for them." 

What Is an ESA?

An ESA (a form of school choice) is a deposit of public funds into government-authorized savings accounts, which eligible families may use to cover tuition, fees, and other qualified education expenses. ESAs foster good stewardship and responsible use of educational spending by empowering parents to shop for educational providers based on price and quality, according to Greg Forster, Ph.D., in A Win-Win Solution: The Empirical Evidence on School Choice. Moreover, unlike traditional voucher programs, unused ESA funds can be rolled over yearly to save for future educational expenses. 

"School choice improves academic outcomes for participants and public schools by allowing students to find the schools that best match their needs and by introducing healthy competition that keeps schools mission-focused. It breaks down the barriers of residential segregation, drawing students together from diverse communities."

Greg Forster, Ph.D., Friedman Foundation for Educational Choice

How Do ESAs Work in Iowa?

Iowa's Students First ESAs are parent-directed accounts. That means parents choose where, when, and how to spend the funds, as long as they are used for qualified education expenses, including tuition at an accredited nonpublic school. Funds are deposited into the student's ESA (managed by a state contractor) yearly, and the parent pays the school through an app.

Any unused funds in an ESA account can be used for future tuition costs or other eligible educational expenses. Funds remain available until the student graduates high school or turns 20. Any remaining balance is returned to the state general fund at that time. 

Iowa ESA Amount

Iowa officials haven't announced the exact ESA amount for the 2025-2026 school year yet. However, the amount is anticipated to be over $7,800. For the 2024-25 school year, the amount was $7,826 per student. This amount is higher than when the Students First Act was passed in 2023, and many believe the ESA amount will increase again for the 2025-2026 school year.

Iowa ESA Application Period and Process

Again, Iowa officials haven't announced the exact ESA application period for the 2025-2026 school year, but it's anticipated to follow a similar schedule as last year. This means the ESA application period will open in April and close in June.

The Students First ESA Application is available in English and Spanish. While it is open, parents may apply through Odyssey, the company the state has contracted with for ESA program administration, including applications, financial transactions, compliance, fraud prevention and customer service.

Only one application is needed per household. Parents/guardians can add multiple students attending multiple schools from their household. The application process should take 10-15 minutes, and results will be available immediately. Applications are valid for one year. A family must apply annually to remain eligible for the Iowa ESA program. 

Iowa ESA Eligibility and Income Limits

When the Students First Act was passed, eligibility was determined by factors like child age and family income.

In 2025-2026, all K-12 students will be eligible, regardless of income.

How Many Students Use an Iowa ESA?

During the 2024-2025 school year, 27,866 students used a Students First ESA to attend an accredited nonpublic school in Iowa as of the Oct. 1 certified enrollment date, according to the Iowa Department of Education. That's an increase from the 16,757 students who used an ESA the year before.

Among these students, 3,780 enrolled at a Diocese of Des Moines Catholic school in 2024-2025 (about 55 percent of our total enrollment). Approximately 35 percent of these were new students in our school system.

"As stewards of knowledge and faith, embracing the transformative power of education savings accounts in Iowa is a testament to our commitment to nurturing both the minds and spirits of our students. By removing the financial barriers for families, we can pave the way for a brighter future, where every child can access the quality education they deserve."

Donna Bishop, Superintendent of Schools

 

How Do ESAs Affect Tuition Assistance?

ESAs will not affect tuition assistance provided by Student Tuition Organizations (STO) An STO is charitable Iowa-based Section 501(c)(3) organization that raises tuition grant funding for eligible Iowa students who enroll in accredited nonpublic, Iowa-based, elementary or secondary schools based on parent choice. The STO must represent more than one school, and 90 percent of its annual revenue must be used to provide tuition grants to eligible Iowa students to cover all or part of related tuition costs.

Every year, Iowa's STO Program supports more than 11,000 students. STOs help parents whose education choices are restricted by their income or zip code. Donors to the STO are encouraged to continue to support tuition assistance for families that want a nonpublic or faith-based education for their children. 

Qualified families can receive both a Student First ESA and tuition assistance. Applying for both options gives eligible families the best chance at receiving the most assistance. All families at or below 400 percent of the Federal Poverty Guidelines qualify for STO tuition assistance, even if they apply for an ESA. 

Families with students attending Catholic schools may also apply for assistance from the Catholic Tuition Organization, which provided $2,258,440 in assistance to 2,195 students in 2024-2025.

For more information about ESAs, email studentsfirst@iowa.gov or call 515-281-5211. Families can also contact Iowa Alliance for Choice in Education at 515-313-0687 or info@iowaace.org.