If you thought that ESA recipients would be given a $7000 check for educational expenses each year, then you will be in for a surprise.  In fact, direct payment to the parent or student is strictly forbidden in both proposals.  In the house bill it reads on pg. 10, “(a) A scholarship awarded under this part: (1) Must not be paid directly to an eligible student or to an eligible student’s parent;” In the Senate bill it says on pg. 13 “(b) The department shall establish and maintain separate scholarship accounts for each recipient and shall verify that the uses of scholarship funds are permitted…”  The Senate bill also specifies that refunds from schools or providers shall NEVER go to the parent or recipient but only to the scholarship account (p. 14, (d)).

Additionally, in the Senate version, use of the funds must be PRE-APPROVED by the DOE (p.13 (b)). Further, the parent or recipient can be suspended or terminated by the DOE if they fail to comply with requirements meaning that the account will be closed by the DOE (pg. 15, (b)). Fraud measures are in place. First, if a parent or recipient uses scholarship funds on non-qualified purchases or if they have misrepresented “the nature, receipts, or any other evidence of one or more of the expenses paid using scholarship funds” (pg. 15 (c)), they will have to pay the amount back to the state.  Second, if they believe that a person knowingly used the funds on expenses that were not qualified (remember pre-approval required) or knowingly misrepresented the information then the DOE may refer the recipient for criminal prosecution (pg. 16 (d)).

The House version also has a section on penalty for fraud or misrepresentation.  On pg. 10 it reads “(a) A parent who knowingly provides false information on an eligible student’s application in order to obtain a scholarship commits a class A misdemeanor.”

At the end of the year, any unused funds will be put back into the treasury for next year’s scholarship fund.  For private school tuition, the funds will probably be used up on that alone.  If a homeschool student does not find a way to use all the funds on approved expenses, then the money will be returned to the state.  You do not get to keep any excess for your personal use or put it toward next year.

To sum it up, no money is directly given to the student or parent.  You can only use the funds on DOE approved expenses (more on this in another blog), receipts and proofs are required for approval of an expense, and you may have to pay it back or face criminal charges if you are not very careful with the procedures and rules.  Money is never FREE and Government Money is never without strings.