ESA Questions and Answers
The SC School Choice website and South Carolina School Choice Alliance are not affiliated with the South Carolina Department of Education, ClassWallet or FACTS. Our general information resources are not official state government assets and are provided as a public service to encourage you to apply for an ESTF scholarship. For details on your specific child’s eligibility, including the previous public school attendance requirement and the family income threshold, please consult the SC Department of Education.
Basic Questions
An ESA, or Education Scholarship Account, is a concept that allow parents or guardians of eligible and approved K-12 students to use a portal (website) to electronically transfer funds from a specially sequestered state account set up for that parent to an education service providers (often a private school).
Through the South Carolina ESA program, known as ESTF (Education Scholarship Trust Fund), parents are empowered to customize an education experience that meets the individual needs of their child, using their online account to pay for approved services like tuition, therapy, tutoring, textbooks, and more.
Already working successfully in other states, ESAs are a powerful, proven innovation that creates an additional pathway for South Carolina students to have an education that equips them to reach their full education potential. Note: Some states use debit cards to pay providers, some states reimburse parents for allowable expenses. South Carolina uses an online portal alone (only) and not debit cards or reimbursement mechanisms.
An ESA, or Education Scholarship Account, is a concept that allow parents or guardians of eligible and approved K-12 students to use a portal (website) to electronically transfer funds from a specially sequestered state account set up for that parent to an education service providers (often a private school).
Through the South Carolina ESA program, known as ESTF (Education Scholarship Trust Fund), parents are empowered to customize an education experience that meets the individual needs of their child, using their online account to pay for approved services like tuition, therapy, tutoring, textbooks, and more.
Already working successfully in other states, ESAs are a powerful, proven innovation that creates an additional pathway for South Carolina students to have an education that equips them to reach their full education potential. Note: Some states use debit cards to pay providers, some states reimburse parents for allowable expenses. South Carolina uses an online portal alone (only) and not debit cards or reimbursement mechanisms.
No. While there is a natural learning curve for everyone using something new, parents of all income levels routinely navigate financial decisions like housing costs, car loans, healthcare expenses, and more. Consumer data shows that millennial parents, across all demographics, are well-versed in the use of online banking and similar products.
Parents of all income levels in other states have proven it possible, and ESAs will empower South Carolina parents with the same options as their counterparts around the country. The vendor selected by the South Carolina Department of Education, ClassWallet and their partner FACTS, have navigators available to assist by phone or email.
Yes and No. Both ESAs and vouchers are forms of school choice and the terms are often mistakenly used interchangeably. But the most recent new voucher program was passed back in 2018. ESAs are the overwhelming trend in America since 2020.
The key aspect that distinguishes ESAs from vouchers is parent control and customization. Instead of the state sending funds directly from the state to a specific private school, the state instead deposits funds into a parent-controlled account. These funds can then be spent on a wide array of approved education services, not only private school tuition like in voucher programs.
Once applications are found to be complete, the student will be approved on a first come, first served basis.
ESA may not be used with either the Parental Refundable Tax Credit or the Exceptional Needs Tax Credit (ECENC). School admissions offices should have a listing of private scholarship sources for which there should be no conflict with ESA funding.
ESTF may not be used with either the Parental Refundable Tax Credit or the Exceptional Needs Tax Credit (ECENC).
In the words of the statute: “’Eligible student’” does not include students participating in the Educational Credit for Exceptional Needs Children’s Fund program, as provided in Section 12-6-3790.” This code section includes both programs.
Who Is Eligible?
South Carolina’s new law blends the approaches of other successful state ESA laws. The South Carolina ESA is for K-5 through 12th grade students whose families: a) have an annual family income of 200% or less of federal poverty guidelines, and b) attended a South Carolina public school during the 2023-24 school year. (Note: The requirement for previously attending public school does not apply to K-4 children who will be attending K-5 kindergarten in 2024-25 if they have not yet reached the age of six.)
South Carolina’s new law blends the approaches of other successful state ESA laws. The South Carolina ESA is for K-5 through 12th grade students whose families: a) have an annual family income of 200% or less of federal poverty guidelines, and b) attended a South Carolina public school during the 2023-24 school year. (Note: The requirement for previously attending public school does not apply to K-4 children who will be attending K-5 kindergarten in 2024-25 if they have not yet reached the age of six.)
No. ESAs do not in any way change these programs. Exceptional SC Tax Credit Scholarships that benefit children with special needs are funded through donations of state tax liability to an independently run non-profit organization that then issues scholarships to eligible students.
The parent tax credit allows parents to deduct expenses for educating their children for tax purposes with special needs in certain circumstances. See https://www.exceptionalsc.org/
A child may not receive both an ExceptionalSC scholarship and an ESTF scholarship.
Application Questions
The SC Department of Education/ClassWallet portal is open for providers to apply to be a part of the program. As these providers are approved by the Department, they will show up among the options for parents to choose.
The SC Department of Education/ClassWallet portal is open for providers to apply to be a part of the program. As these providers are approved by the Department, they will show up among the options for parents to choose.
No, if you already have a FACTS user account, you can sign into that previous account and fill out the ESTF application that way. FACTS user accounts can be connected to multiple applications or products, so you can use your existing account for ESTFs.
No, you can skip that requirement if you would like. But, if you ever forget your password, multi-factor authentication can be helpful to get back into your account!
ClassWallet, the account funding contractor, has in turn contracted with FACTS for application administration. Parents working on their student’s application may call FACTS (866) 539-6359 Monday through Friday from 8 am – 8 pm ET or Email FACTS info@factsmgt.com.
“To complete the application, you’ll need:
- Proof of guardianship (Tax Return w/Dependents Listed, Birth Certificate, etc)
- Proof of income (2022 or 2023 tax return documentation. If you don’t file taxes, information on income)
- Proof of residency (Driver’s License or State-issued ID, utility bill, etc.)”
No! You can submit your initial application without that proof of income information, and then you have an additional 4 weeks to provide those documents. Once you submit the application, you will be taken to your application profile, which will show what documents are still needed. You will also receive an email listing each document required. This email will contain the link to get you right back into your application summary page to upload documents.
You can upload it as PDF file or an image taken with your phone/tablet. Your application is considered submitted, but not complete, until all the required supporting documents are uploaded.
In addition to the taxable income you would report on your tax return, you must also report the following non-taxable income in your ESTF application:
- Alimony received
- Worker’s Compensation
- Housing Allowance (Military, Religious, Parsonage, etc)
- Tax-Exempt Interest
- Other Nontaxable Income
You will need documentation for these nontaxable forms of income. These amounts will be used to calculate your income eligibility for the program. Note that if you indicate that you did not file taxes in 2022, you will be required to provide other proof of your household income.
DO NOT report the following non-taxable income:
- Child Support
- Veteran’s Payments
- Supplemental Social Security Income (SSI)
You should apply with the tax return that best represents your household income situation currently in 2024.
For example, maybe your household income level was above 200% of the federal poverty line in 2022, but in 2023, your income fell below the line. The ESTF application asks for your 2022 tax returns, but you can submit your 2023 tax returns if you prefer. If, for some reason, your application is denied for financial reasons and you feel it was not justified, the Department has a financial appeals process where you can submit more documentation to prove that you really fall within the income limits of the program.
If your child has a Medicaid card, that can be used in place of tax documents to verify your household income. However, it is not required that your child be on Medicaid to apply; you can use tax documents to verify your income instead.
The applicant on the ESTF application is the parent’s information and is linked to the information entered on your FACTS user account. Information about the student will be entered later in the application.
The Applicant and/or Co-Applicant (if applicable) will be the current legal guardian(s) of the student(s). This information is collected to match against documentation collected for eligibility confirmation. If Mom fills out the application and she is the custodial parent and divorced, she would just list herself on the application without a co-applicant. If both Mom and Dad live in the household, they would both be on the application.
Yes, you can complete one application for multiple children using the same FACTS account. Under the “student” application in the portal, there is an option to “add student,” so you can list all children in your family in the application.
Students enrolled full time in their residential public school district schools are not eligible to use ESTF funds. A student who receives the ESTF scholarship may not enroll full–time in their residential public school district and can instead use the scholarship funds for tuition at an independent school, an online school, etc.
There is no appeal from being found ineligible for an ESA (essentially since the only qualifications are easily proven: income and previous school year public school attendance). There is an appeals process for an education provider or school that has been denied.
Accountability for State Funds
South Carolina’s legislation applies lessons learned in other states with specific checks built-in to prevent intentional or unintentional misuse, such as the use of an online portal (only) for education purchases. Parents will not be able to buy anything with ESA funds outside the portal of approved vendors. This makes ESAs as transparent—if not more—transparent than any other form of education spending.
South Carolina’s legislation applies lessons learned in other states with specific checks built-in to prevent intentional or unintentional misuse, such as the use of an online portal (only) for education purchases. Parents will not be able to buy anything with ESA funds outside the portal of approved vendors. This makes ESAs as transparent—if not more—transparent than any other form of education spending.
(a) to provide, at a minimum, a program of academic instruction for the eligible student in at least the subjects of English/language arts to include writing, mathematics, social studies, and science;
(b) to acknowledge and agree to comply with the education service provider’s prescribed curriculum, dress code, and other requirements of enrolled students;
(c) to ensure the scholarship student takes assessments as referenced in Section 59-8-150 or provides assessments in a similar manner through other means if the scholarship student does not receive full-time instruction from an education service provider;
(d) to use program funds for qualifying expenses only for an approved provider to educate the scholarship student, subject to penalty;
(e) not to enroll their scholarship student in a public school as a full-time student in the resident school district, as defined in this chapter;
(f) not to participate in a home instruction program under Sections 59-65-40, 59-65-45, or 59-65-47;
Participating School Requirements
No. First, there is no obligation for any school to participate in the program. Second, unlike in a traditional voucher program, the only financial transaction involving the state is when the state transfers funds to the parent’s account. The state does not directly choose or pay any education vendors, including private or religious schools.
Whether the parent spends ESA funds (legally, their student’s money not the government’s) on private schooling or some other form of education is up to the parent, so long as it is to a provider listed within the portal.This keeps the government out of independent schools and personal education decisions.The statute contain specific language that prevents the ESA program from expanding the regulatory authority of the state.
No. First, there is no obligation for any school to participate in the program. Second, unlike in a traditional voucher program, the only financial transaction involving the state is when the state transfers funds to the parent’s account. The state does not directly choose or pay any education vendors, including private or religious schools.
Whether the parent spends ESA funds (legally, their student’s money not the government’s) on private schooling or some other form of education is up to the parent, so long as it is to a provider listed within the portal.This keeps the government out of independent schools and personal education decisions.The statute contain specific language that prevents the ESA program from expanding the regulatory authority of the state.
Schools participating in the program are require to administer the state test or, as an alternative, schools may administer a nationally norm-referenced formative assessment approved by the South Carolina Department of Education. School may administer these tests to all students, but only ESA scholarship students are required to take these assessments for state accountability purposes.
The school must meet all state and local regulations for health and safety enunciated in the South Carolina Code of Laws, state regulations, and local ordinances.
ESAs and Public Schools
No. Public schools in states that have ESA programs have not been harmed. For each student participating in the South Carolina Education Scholarship Account (ESA) program, a public school will no longer bear the cost of instructing the student. The Arizona program is the nation’s oldest ESA program (2011) and it currently enrolls about 70,000 students.
No. Public schools in states that have ESA programs have not been harmed. For each student participating in the South Carolina Education Scholarship Account (ESA) program, a public school will no longer bear the cost of instructing the student. The Arizona program is the nation’s oldest ESA program (2011) and it currently enrolls about 70,000 students.
No. If parents are pleased with the outcomes of their local public school, they will have no need for an ESA. Many parents are content with the school for which their student is zoned.
The best predictor of the rate of transfers to ESAs from public schools would be to look at the largest and longest-running programs: Arizona and Florida. In Arizona, just a little over 70,000 students participate in the program (out of 1.1 million total students). In Florida (2014), about 83,000 students benefit from Education Scholarship Accounts (out of a 2.8 million student population).
No. ESAs are specifically designed to benefit students who face economic challenges. Often, these are the students who fall behind or are not well-served in traditional education environments.
Renewing an ESA
Once in the ESTF program, the child will remain in the program provided all the requirements continue to be met, for example the income of the parents must remain within the limits set in statute. Fortunately, the income ceiling is being raised over the life of the program—-200% or less of federal poverty (2024-25), 300% (2025-26) and 400% (2026-27). The student is “grandfathered” until graduation from high school, though a renewal application within the portal may be required.In the words of the statute: “The department shall process applications in the order in which they are received, after a preference has been extended to all prior-year participants and their respective siblings”
Once in the ESTF program, the child will remain in the program provided all the requirements continue to be met, for example the income of the parents must remain within the limits set in statute. Fortunately, the income ceiling is being raised over the life of the program—-200% or less of federal poverty (2024-25), 300% (2025-26) and 400% (2026-27). The student is “grandfathered” until graduation from high school, though a renewal application within the portal may be required.In the words of the statute: “The department shall process applications in the order in which they are received, after a preference has been extended to all prior-year participants and their respective siblings”
Yes. These include—
Payments made by the department must remain in force until a parent or scholarship student is proven to have
* participated in a prohibited activity specified in this chapter,
* a scholarship student returns to a public school in his resident public school district,
* or a scholarship student graduates from high school *or attains twenty-two years of age, whichever occurs first.
A scholarship student who enrolls in his resident public school district is considered to have returned to a public school for the purpose of determining the end of the term.
Homeschooling
The entry of ESAs onto the South Carolina educational landscape will not affect the rights of parents and students using the existing three options for homeschooling in any way. Homeschoolers using all three accountability methods will have the same freedoms and be unaffected by the ESA program.
https://ed.sc.gov/districts-schools/state-accountability/home-schooling/
The entry of ESAs onto the South Carolina educational landscape will not affect the rights of parents and students using the existing three options for homeschooling in any way. Homeschoolers using all three accountability methods will have the same freedoms and be unaffected by the ESA program.
https://ed.sc.gov/districts-schools/state-accountability/home-schooling/
Co-ops and resource centers as described are essentially forms of homeschooling. Students whose parents exercise one of the three options for homeschooling are not permitted to participate in the South Carolina ESA program (ESTF) as it is currently constituted. Also, students would have to have attended public school during the 2023-24 school year.
This is not to prevent a homeschool co-op teacher from offering tutoring services outside the co-op to students who are using ESAs according to the statute.
Taxable Income
The scholarship is not taxable per the legislation.The statute says that “[f]unds received pursuant to this section do not constitute taxable income to the parent of the scholarship student or to the student.”
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