School voucher expansion could come with a $48 million price tag

The bill that would expand the state’s school voucher program will have one more vote at the Senate Finance Committee on Friday: if passed, House Bill (HB) 367, could cost the state approximately $48 million per year, according to Reaching Higher NH estimates. 

The bill would increase eligibility for school vouchers to students with household incomes at or below 350% of the federal poverty guideline, which is $105,000 for a family of four in 2023. The current income threshold is 300% of the federal poverty guideline, or $90,000 for a family of four in 2023. 

Pro-voucher advocacy groups estimate that 45% of students would be eligible for the program under the expansion. With that estimate, Reaching Higher NH estimates that approximately 9,635 current private and homeschooled students would be eligible for the program in total, which would expand eligibility by approximately 25%. If all eligible students participated, the program would cost about $48 million under current law. 

New Hampshire’s school voucher program, also known as Education Freedom Accounts or EFAs, are taxpayer-funded accounts that can be used to pay for education-related expenses, including private school tuition, homeschooling expenses, tutoring, books and materials, and transportation. The program was passed in 2021 as part of the statewide budget, alongside a wave of voucher legislation nationwide. 

​​HB 367 has already been passed by both the House and the Senate and has now been referred to the Senate Finance Committee. The Senate Finance Committee is expected to vote on a recommendation for the bill before it goes to the full Senate for a final vote. If the Senate votes to pass the bill a second time, it will go to the Governor’s desk for his signature. Governor Sununu has previously indicated that he would be willing to expand the voucher program; an expansion of the program was included in his original budget proposal for the 2024-2025 state budget.

There is no scheduled public hearing for the bill, but committees usually welcome emailed input from the public before key votes. Email committee members here

About the model

Estimating the true cost of the program is difficult because the eligibility criteria are based on income, and New Hampshire does not have the statewide data to accurately predict the number of students who could be eligible for the program. However, Census estimates indicate that in 2021, about 36% of school-aged children residing in New Hampshire had household incomes at or below 300% of the federal poverty guideline, and about 51% of school-aged children had household incomes at or below 400% of the federal poverty guideline. 

Therefore, assuming the income distribution of students who enroll in private schools and homeschooling programs follow the same patterns as the state, and assuming no changes in enrollment in private or homeschool programs, we estimate that between 7,705 and 11,005 private and homeschooled students could be eligible for the program in the 2023-2024 school year.

According to EdChoice, a national advocacy group for school voucher legislation, 45% of New Hampshire students would be eligible for a school voucher under HB 367. Using this estimate, 9,635 private school and homeschooled students would qualify for school vouchers. 

Reaching Higher NH also estimates the average school voucher amount to be $4,954 in the 2023-2024 school year, which is a 2% increase over the current average school voucher amount. The NH Department of Education will use an inflation adjustment of 2.1% for the base per pupil cost and differentiated aid; however, RHNH adjusted to 2% to account for the lower proportion of students who would likely be eligible for Free and Reduced Price Lunch differentiated aid. By increasing the income cap, it is expected that slightly fewer students would qualify for that differentiated aid category. 

Using those figures, Reaching Higher NH estimates that the school voucher program could cost the state nearly $48 million if all eligible students participate in the program. The model does not include students who may disenroll from their local public school to enroll in the school voucher program; however, the vast majority (77%) of students who have participated since the program’s inception were already enrolled in private schools or homeschool programs. 

While it is unlikely that all eligible students will participate in the school voucher program, it is important for lawmakers and the public to understand its full cost since there is no cap on the number of students or allocated state funds. Per state law, the state must fund every eligible school voucher request, regardless of the state’s budget; therefore, the state should take into consideration the total amount for which they would be liable under full participation. 

About school vouchers in New Hampshire

New Hampshire’s school vouchers are personal accounts that can be used to pay for certain education-related expenses, including private school tuition, homeschooling expenses, tutoring, books and materials, and transportation. Eligible families receive the base amount of state funding per student plus any additional aid for which their student qualifies (eligibility for school meals, special education services, English Language Learner program, or the third grade reading aid). When participating in the program, families agree not to enroll their child full-time into their resident district school or public charter school; however, families may enroll their children into public and charter schools part-time, depending on the policies of the school.

Currently, students are eligible for participation in the program if they are eligible to enroll in a New Hampshire public school and meet the income eligibility guidelines at the time of application. Students only need to qualify in the first year of the program and do not need to meet the income eligibility guidelines in subsequent years. 

Independent studies have suggested that outcomes for participation in similar school voucher programs in other states are, at best, mixed, but more recent studies have suggested that these programs have had significant negative effects on student outcomes for the students who participate in them and have diverted funding from public schools. 

The taxpayer-funded accounts have cost the state roughly $24 million in state funds since the program began enrolling students in August 2021. About 77% of those funds are going to families who have already enrolled their students in private schools or homeschools, even before applying for a voucher.Follow us on Facebook and Twitter, and join the New Hampshire Education Network (NHEN), our network of New Hampshire parents, educators, business leaders, and community members to stay up to date on the latest developments in education policy.