State funding for K-12 private school students considered

Nebraska private school students could receive up to $1,500 a year for education-related expenses under a measure considered Feb. 25 by the Education Committee.

LB427, introduced by Omaha Sen. Bob Andersen, would establish the Student Savings Account Support Fund and allow K-12 students enrolled in approved or accredited public, private, denominational or parochial schools to apply for an educational savings account to help cover educational expenses.

Under the bill, students could use the savings account to pay for items such as tuition, fees, textbooks, software, support services or any other academic or learning materials approved by the State Board of Education. Account funds would be nontransferable and prioritized to pay for tuition and fees before other qualified expenses.

Beginning with the 2026-27 school year, parents and guardians would receive information on how to apply for ESAs. Then, beginning July 1, 2026, the state treasurer would create education savings accounts for eligible students and deposit $1,500 from the Student Savings Account Support Fund into each account.

Students would need to reapply annually to continue receiving ESA payments for subsequent school years. If a student no longer qualifies or has graduated, their account would be terminated and any remaining funds would be allocated to the state’s General Fund.

LB427 would prioritize funding for students rather than systems by enabling foundation aid to follow them to any approved or accredited school of their choice, Andersen said. More importantly, he said, the bill would give parents greater control over their child’s education.

“Both parents and children benefit by attending schools that suit them best,” Andersen said. “The state saves money [and] the public schools face healthy competition, which ultimately improves the quality of education for all of our state’s children.”

Betzy Sandoval of Iowa testified in support of LB427, saying her private school tuition financially strained her single mother, who sometimes struggled to meet basic needs.

Through the assistance of opportunity scholarships and Iowa’s ESA program, Sandoval said, she was able to continue attending her preferred school while alleviating the financial burden on her family.

“Throughout the past two years with the Iowa ESA, my mother doesn’t have to worry about [choosing between] a car payment or her children’s tuition,” she said.

Representing Americans for Prosperity, John Gage also supported the bill.

Education support accounts for private school students would enable families to customize their child’s education, Gage said, and give students an alternative to public schools, which he said are struggling to meet basic standards amid declining proficiency rates.

“Every child deserves a fair shot at success, and every family deserves the right to decide how their education dollars are spent,” Gage said.

Tim Royers opposed the bill on behalf of the Nebraska State Education Association, saying ESA programs such as Iowa’s largely benefit students already enrolled in private schools. Only 12% of Iowa ESA recipients previously attended a public school, he said, and the average household income for those recipients is $128,000.

“All that Iowa’s program has done on a large scale is subsidize families of means who have already decided to attend private schools,” Royers said.

Connie Knoche testified in opposition to LB427 on behalf of OpenSky Policy Institute. If all private school students in Nebraska applied for an ESA, the program could cost the state around $55 million at a time when it is facing a significant budget shortfall, she said.

Representing Stand for Schools, Vanessa Chavez Jurado also opposed the bill. ESA programs in other states have been susceptible to fraud and abuse, she said, with some recipients using funds for non-education related expenses such as theme park tickets and video game consoles.

“While LB427 includes some provisions to prevent fraud, similar safeguards in other states have not been effective,” Chavez Jurado said.

The committee took no immediate action on the bill.