Partial school voucher expansion could cost the state up to $66 million per year, according to RHNH analysis

Increasing the income eligibility for the state’s school voucher program could cost the state up to $66 million per year, according to Reaching Higher NH estimates. The NH House is scheduled to vote on HB 1665, which would expand the income eligibility threshold for the statewide school voucher program from 350% of the federal poverty guideline to 500%, on Thursday morning. 

Here are the key things to know about the analysis:

  • An estimated 63% of children ages 6-17 would meet the proposed income eligibility criteria, according to the US Census Bureau ACS 5-Year Estimates (2022). 
  • Using current enrollment data from the NH Department of Education, approximately 13,380 students who are currently enrolled in a private school or homeschooling program would be eligible to receive a voucher, resulting in an annual cost of $66 million. 
  • The current school voucher program, which has an income cap of 350% of federal guidelines, enrolled 4,211 students in 2024 and is expected to cost the state approximately $22.6 million in FY2025. 
  • HB 1665 is expected to nearly triple the cost of the school voucher program
  • To date, about 75% of school voucher participants were not enrolled in public schools, meaning that they were already enrolled in a private school or were homeschooled. 
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The House will also vote on universal school voucher expansion, which would cost the state an estimated $104 million per year. While the partial expansion proposed in HB 1665 would likely cost the state less than universal expansion, it would still result in substantial growth of the program, which is already over official state estimates, and about 11% over budget for the current fiscal year. 

Model Assumptions

The following assumptions are included in the model:

  • The totals are based on the Public School Adequacy FY2025 Estimate, and do not take into account any changes to the state adequacy formula made after July 1, 2023.
  • The models are based on 2023-2024 private school and homeschool enrollment and assume no changes in enrollment for the 2024-2025 school year.  They do not include students who reside in New Hampshire and attend an out-of-state private school.
  • The FRL eligibility rate is assumed to be equivalent to the district public school eligibility rate, which is 26.5% in SFY2024. There is expected to be a decrease in eligibility from the current SFY2024 for FRL if the income cap is removed; therefore, the model uses the district public school eligibility rate.
  • The Special Education and ELL eligibility rates are assumed to be equivalent to the current participation rates for the school voucher program in SFY2024.
  • The model assumes that all students who receive a school voucher in FY2024 are counted in the private school and homeschooling enrollment figures. Similarly, the model assumes that all private school students reside in New Hampshire. The NH Department of Education does not have data on either of these scenarios, so this remains an assumption of the model. 
  • The model uses US Census Bureau data to approximate the percentage of eligible students. The US Census Bureau data used in the model includes data for children ages 6-17; therefore, there is a model assumption that school-aged children who are not in that age band follow the same demographic trends. 
  • The model does not account for the margin of error associated with the US Census Bureau data. 
  • The model uses the latest available US Census Bureau data, which is the 2022 ACS 5-year estimates. Therefore, the model assumes that the income ratios remain constant through FY2025. 

About the model

The model uses data from the 2023-2024 homeschool and private school enrollment reports from the NH Department of Education. The model does not include students who live in New Hampshire but currently attend a private school outside of New Hampshire, although they would be eligible to receive a school voucher if these laws passed. There is no requirement that school voucher recipients attend a school in the state, and voucher funds are permitted to be used on out-of-state school tuition.

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. 

The model only includes private and homeschool students; therefore, it does not take into account the local fiscal impact of school vouchers or the cost to the state to fund phase-out grants.

While it is unlikely that there will be a 100% participation rate in the first year of the school voucher program expansion, 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 found that outcomes for participation in similar school voucher programs in other states are, at best, mixed. However, 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. Researchers have stated that school vouchers “cause catastrophic academic harm” and have had a worse impact on student outcomes than any other policy or event in public school history, including the global pandemic. 

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