Family Education Reimbursement Accounts

October 28, 2005

Family Education Reimbursement Accounts are an innovative, flexible, and temporary proposal for displaced students and the schools enrolling them, bypassing the existing bureaucracy – which was not created to respond to the unprecedented challenges caused by the Gulf Coast hurricanes – to provide direct education aid to those parents and children who need it most.  Parents would go through a simple, one-time enrollment process and establish an account for use by each child from pre-K to 12th grade.  The accounts, up to $6,700 per child with an additional $1,500 for each child served under the Individuals with Disabilities Education Act, would be used to reimburse the public, private, or charter school enrolling the student for the current school year.

HOW THEY WORK:

• Step 1: Parents enroll their children.

• Parents would use a simple, one-time enrollment process to create a reimbursement account.

• Using the internet or an 800-number, parents could establish an account that could be used for each child from pre-K to 12th grade.

• Parents would be given an account number immediately upon registration and would provide that account number to the school the child would attend.

• Step 2: Schools are reimbursed.

• Once children are enrolled, schools would simply use the account information to be reimbursed for the additional expense of educating displaced children.

• Public, private, or charter schools would all be eligible to access the reimbursement accounts using the account information provided by the parent.

• Schools would be reimbursed quarterly based on the number of weeks a child is enrolled.  If a child relocates during the school year, multiple schools could be reimbursed using the same account for the child.  This would eliminate duplication by ensuring schools are promptly reimbursed, and only for the period the child is enrolled.

WHY THEY’RE BETTER:

• In the wake of Hurricanes Katrina and Rita, state and local educational systems are struggling with never-before-seen challenges. 

• More than 300,000 children were initially displaced by the Gulf Coast hurricanes, and 49 states and the District of Columbia have all opened their doors to enroll these students.

• Family Education Reimbursement Accounts would offer three key features:

• Simplicity:  Reimbursement accounts would offer simplicity to parents and schools.  Parents sign up just once, and the account would allow schools to be reimbursed on behalf of the child for the period the child was enrolled.  Schools would also benefit from the simplicity of being reimbursed directly, bypassing federal and state bureaucracy.

• Flexibility:  Many parents have already enrolled their children in any school that was available and willing to open its doors.  Reimbursement accounts would not punish private schools that have opened their doors and enrolled children, often at free or reduced tuition, but would provide the same reimbursement on behalf of all affected children.

• Portability:  For many families affected by the hurricanes, their current location is only temporary.  These accounts could reimburse multiple schools without overlap or duplication because the account would follow the child.

• Reimbursement accounts would use federal resources efficiently for the reimbursement of schools enrolling displaced students.

• Funds would be used to provide for the cost of educational services for displaced students.  For example, funds could be used for books, supplies, uniforms, transportation, or teachers.  Funds would not be used for school construction or renovation.

• At the end of the 2005-2006 school year, any unused balance will be credited back to the federal Treasury for deficit reduction.  This will ensure that resources are available throughout the school year for families, while taxpayer dollars are accounted for at the program’s close.