LITTLE ROCK – Due to its growing popularity, legislators allocated an additional $90 million to Educational Freedom Accounts.
The chief financial officer of the Education Department said that without the additional funds the state would not be able to make first quarter payments before the upcoming school year.
The governor proposed and the legislature approved the creation of Education Freedom Accounts in 2023, phasing in the program over three years. The 2025-2026 school year will be the first in which all students are eligible, and the number of families applying for the accounts shows that it is very popular.
Education Freedom Accounts provide families who home school, or who send their children to a private school, with 90 percent of the amount that state government and local school districts would spend for each pupil enrolled in public schools. In the 2025-2026 school year that will be $6,864 for each student who is eligible for an Education Freedom Account.
According to the state Education Department, it has received applications for more than 44,000 students, and almost 40,000 have already been approved. About 28,000 applications are from families who send their children to private schools and 16,000 are from families who home school their children.
The legislature anticipated higher demand for Education Freedom Accounts and earlier this year approved Act 1017, which set aside the additional $90 million for the program.
Earlier this year the legislature increased funding for Education Freedom Accounts from about $97 million to about $187 million. Last week’s allocation of $90 million will bring the total amount of funding to $277 million for the upcoming school year.
School Insurance
In the 2025 regular session the legislature created a sustainable, new system of property insurance for schools, higher education institutions and state agencies. It was the result of several years of work.
A legislative subcommittee approved the creation of a captive insurance plan last week that would hold rates unchanged next year. Deductibles next year for schools will be $25,000 if they have less than $100 million in insured assets. For school districts with more assets the deductible will be $50,000.
State agencies will have a deductible of $250,000. A consultant’s report cautioned that schools and state agencies can expect deductibles to increase the following year.
The state Board of Finance has approved the plan. Another state agency, the Department of Shared Administrative Services, will operate the insurance program, known as a captive plan. The state will operate the program as if it were its own insurance company.
The governor and lawmakers have been shoring up school finances with one-time disbursements, after they had experienced rising costs for property insurance. Last fiscal year the state provided $11 million to help pay for higher insurance premiums that were driven up by claims after severe storms. Consultants reported to lawmakers that rates had tripled from 2021 to 2024, in large part due to wind and hail damage.
