ESAs and Digital Wallets

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ESAs were originally created to give parents of students with disabilities the funding that they can use to tailor expenditures to the individual needs of their student. Today ESAs are usually earmarked for low-income families and students with disabilities. Parents use the funds for everything from private school tuition, tutors, therapy, and devices. Recently, states such as New Hampshire and West Virginia are expanding the types of families that can access ESAs.

According to, states with active ESA programs include Arizona, Florida, New Hampshire, North Carolina, and Mississippi. An estimated 19,109 students are using ESAs in those states. Twenty- three states have introduced ESA legislation. To learn more about ESAs, EdChoice has created The ABC of School Choice guide.

Why use a digital wallet?

Historically, states have had few options to distribute ESA grants, often relying on either a debit card or reimbursing parents for eligible expenses. Debit cards can be problematic because they allow for limited oversight, making the ESA program difficult and inefficient to manage. Reimbursement systems can require several weeks for families to get reimbursed, which is a hardship for families with limited resources. The lack of transparency and reporting also escalates the potential for fraud.

With a digital wallet, like ClassWallet, your agency can:

  • Save administrative time: No more paper processing, chasing down receipts, or managing physical debit cards. Customers report being able to reduce administrative costs by 90% when they move to ClassWallet.
  • Eliminate fraud: Not having to keep card details and dealing with lost or stolen cards reduces fraud risk. With a digital wallet, transactions are controlled and you can track in real time where money is being spent.
  • Improve recording keeping: With all the backend accounting in one place, you can view real-time balances and transactional data while easily generating audit reports. Most ESA legislation or regulations require state agencies to either adopt strategies or refine existing practices for administering the personal ESA accounts. With ClassWallet, you’ll satisfy all of these legislative and regulatory policies.

Amazon meets PayPal

In New Hampshire, the newly enacted Education Freedom Account (EFA) program enables qualifying families to apply state funding toward private education providers. The Children’s Scholarship Fund New Hampshire (CSF-NH) is helping to empower parents of more than 60,000 eligible students to create personalized learning experiences using EFA funds.

Kate Baker Demers of CSF-NH uses ClassWallet and shared with us how it has helped her and her team manage funds, “I’m hoping to help ESA program administrators across the nation. There’s a lot of agencies out there who are just lost. I’m getting a lot of phone calls from people in other states asking me how we did this. And I tell them ClassWallet gets much of the credit. It’s the only way to be efficient and foolproof, while avoiding fraud.” She continues “ClassWallet is so transparent and yet also so easy to use—every little expense down to the pencil is in there. It eliminates so many of the discussions that people have about fraud.”

“I tell people ClassWallet is easy, it’s like Amazon meets PayPal,” Demers says “To me, it’s so simple —you log into the platform, you see your money, you move your money. It’s a whole different level of transparency around education funding than New Hampshire has never had. ”

“Our organization has given away 800,000 scholarships. We’re getting the funds out for the people that need it instead of it getting bogged down with paper reimbursements.” Kate concludes, “Because we’re often working with low-income families, you should use a digital solution and not a paper reimbursement solution right out of the gate, without question.”

ClassWallet works with North Carolina, New Hampshire, and Arizona to implement their traditional ESA programs.

In addition, we work in these short-term ESA programs, using federal COVID relief funds: Idaho, Oklahoma, Texas, and Georgia.