Four steps to improve school choice in South Carolina

All South Carolina students deserve a high-quality education, and not every child thrives in their residentially zoned public school. Families have options like charter schools, private schools, or homeschooling, but these alternatives often carry additional costs.

South Carolina’s Education Scholarship Trust Fund (ESTF) program helps S.C. students who do not attend their zoned public school by providing them with access to public funds. Lawmakers fund the program proportionally to public education funding increases in the annual state budget.

The S.C. Department of Education (SCDE) distributes funds to eligible families through education savings accounts (ESA). Recipients use funds to pay for approved educational expenses, including private school tuition, transportation, and tutoring, at registered schools and other SCDE-approved vendors called education service providers.

For the 2025-26 school year, ESTF eligibility was limited to students from households earning no more than 300% of the federal poverty guidelines, with enrollment capped at 10,000. This school year, 2026-27, the income threshold increased to 500% of the federal poverty guidelines, and the enrollment cap rose to 15,000. Despite the increase, S.C. lags behind its regional neighbors.

The Heritage Foundation’s annual Education Freedom Report Card ranked S.C. 22nd in education choice for the second consecutive year, citing the ESTF statutory limits as the primary factor.

This comes as no surprise; in August, the SCDE reported to the ESTF Review Panel that the program reached its statutory enrollment cap, placing over 7,000 otherwise qualified students on the waitlist for the 2026-27 school year.

Florida and Arizona, which the Heritage Foundation ranked first and second in education choice, have successfully scaled similar programs into universal options that give parents control over their children’s education.

Learning from the best

Arizona, the oldest ESA program in the nation, offers scholarships through its Empowerment Scholarship Account program. The program was expanded to universal eligibility in 2022, making scholarships available to all private school students and homeschoolers.

Prior to the Arizona program, scholarship programs primarily used a voucher mechanism in which a check was made out directly to the student’s school of choice. The ESA program creates a digital wallet that allows parents to spend scholarship money on a variety of education needs including tuition, tutoring, textbooks, educational therapies, and technology used to further a student’s educational needs.

In Arizona, students attending a public or charter school generally do not qualify, with exceptions for children with disabilities. During the 2025-26 school year, the program served 96,802 students. Arizona also offers scholarships through various tax-credit scholarship (TCS) programs. Unlike an ESA program funded directly by public funds, a TCS is funded by tax-credited private donations made by individuals or corporations to scholarship-granting organizations.

Florida provides scholarships via its Family Empowerment Scholarship for Educational Options program and expanded eligibility in 2023 to all private school students. The program served 280,611 students in the 2025-26 school year. The state also offers scholarships through the Family Empowerment Scholarship for Students with Unique Abilities to students with a disability. Launched in 2024, the program has 140,147 students participating.

Florida also provides universal scholarships through the Florida Tax Credit Scholarship program. Florida home school students are ineligible for the Family Empowerment Scholarship program, but they qualify for the Florida Tax Credit Scholarship via the Personalized Education Program, which had an enrollment cap of 100,000 students in the 2025-26 school year.

Below is a table comparing public school population to total school choice participation across all scholarship programs:

School Program Participation for the 2025-26 School Year

Here’s a similar table comparing S.C. to the Southeast region:

School Program Participation for the 2025-26 School Year

Public school population figures for Alabama, Georgia, and Tennessee reflect 2024-25 data. School choice participation data from EdChoice.

Florida and Arizona see significantly higher participation because their programs are truly universal, granting every parent the choice to control their child's education. However, it takes time to scale an ESA program to universality.

Policy recommendations

S.C. lawmakers should pursue the following policy changes to expand access to the best education option for every S.C. student:

1. Expand the Program

Starting in the 2027-28 school year, ESTF participation will be limited by appropriations in the annual budget with a statutory minimum of 15,000. Lawmakers should increase program funding based on the previous year’s waitlist, but they have no statutory obligation to do so.

Lawmakers should codify a statutory requirement to increase annual program funding at least enough to cover the previous year’s combined enrollment and waitlist.

2. Reevaluate per-student funding

The SCDE administers the ESTF program through the platform ClassWallet, allowing parents to purchase approved items or services and dispersing funds directly to education service providers. This prevents families from sending ESTF funds to unapproved vendors.

The looming issue is not misuse of funds; it’s how we calculate per-student funding. Florida bases per-student funding on grade level and county of residence, and Arizona based on grade level, but neither state extends its program universally to public school students. By contrast, the ESTF program allows participants to attend a public school as long as it is not their zoned school.

Lawmakers should adopt a more tailored funding formula that uses weighting for categories including grade level, education option, and students with documented disabilities. Students receiving ESTF funds for interdistrict or intradistrict transfer should receive an amount equal to transfer fees plus any cost for a transportation vendor that would not be necessary if the student remained in their residentially zoned school. The SCDE should regularly reevaluate the list of approved services and products to ensure families are able to provide their students with the best education possible.

3. Open the program to homeschool students

Homeschool students are currently excluded from the ESTF program. Instead, students that are engaging in unbundling are currently allowed to participate in the program, as participation in the ESTF program satisfies compulsory attendance. Legislators have raised concerns about families educating at home without reporting to a traditional homeschool option. South Carolina currently has three homeschool options: Option 1 is through your resident school district, Option 2 is through a specifically named homeschool association, and Option 3 allows other homeschool associations to handle accountability for students.

Lawmakers should amend the law to allow homeschool students to receive ESAs under existing accountability options while allowing homeschool associations to decide whether to register with the SCDE as education service providers. This would ensure that students are accountable to an association while also ensuring that the students are able to access state scholarships, transcripts, and other services that the associations currently provide.

4. Maintain reasonable accountability

In late-September, the Education Oversight Committee (EOC) released a report citing a lack of usable testing data from ESTF participants during the 2024-25 school year. Ensuring compliance with testing requirements is on each student and his or her family.

First year reporting already had to overcome balancing student privacy with accountability, while simultaneously the South Carolina Supreme Court struck down the original ESTF program midway through the 2024-25 school year over technical issues. This abruptly ended the first iteration of the program and altering thousands of children’s schooling overnight naturally resulted in a flawed dataset.

Despite the precipitating data-collection nightmare, some EOC members used the report as an opportunity to critique testing standards. SCDE already has a list of approved tests that satisfy program requirements similar to those approved in Arizona and Florida. Testing choice is not an anomaly in the ESTF program; rather, it is included in most of the ESA programs across the nation. Different education methodologies should be able to find tests that best align to their scope and sequence to maintain a robust school choice ecosystem. Requiring state testing tethers a school choice program to the one-size-fits-all state standards list.

The EOC is expected to publish testing data from the first full, uninterrupted year of the ESTF program in mid-December, which should have fewer data concerns.

Rising tide lifts all boats

Challenges should be expected, but it is important that we recognize these as opportunities to refine and improve the program, not abandon it. Both sides of the ESA debate want children to receive the best possible education, but many critics present the false dichotomy of school choice versus increasing public school funding. The ESTF program does not take money from public school funding, and the total amount received by families for the current program year ($7,634) is dwarfed by the average per pupil spend in the public school system ($19,871).

Arizona and Florida have naturally seen declining public school populations since introducing universal choice options. This lowers the student-teacher ratio and allows teachers to spend more time one-on-one with students, often leading to better academic outcomes. Although schools do not receive state funding for students no longer in their classrooms, the district still receives the same amount of property tax revenue even when the district serves fewer students. S.C. still funds a strong public education system while also providing options for students who need a different educational environment.

Empowering families to personalize their children’s education with ESAs benefits the broader education ecosystem. Most students will remain in the public school system if given the choice, but for students who need an alternative, S.C. should afford them that option.

This report may be republished in whole or in part, provided that proper credit is given to the author(s) and the South Carolina Policy Council.