Senate Republicans clash with House over raising education freedom account eligibility

Republicans in the House and Senate are both interested in raising the income cap for education freedom accounts this year. But the chambers disagree over how high.

On Tuesday, the Senate Education Committee rejected a proposal by the House to raise eligibility from 350 percent of the federal poverty level to 500 percent. Instead, the committee proposed amending the bill to set the level at 400 percent. 

The education freedom account program gives low-income families around $5,000 per year in state funds to go toward private school or home school expenses. When first created in 2021, the program was available to families making up to 300 percent of the federal poverty level, or $106,000 for a family of four at the time. 

In 2023, the Republican-led Legislature raised it to 350 percent. House Bill 1665 sought to raise it to 500 percent, or $156,000 for a family of four. It was voted through narrowly: 190-189, after Speaker Sherman Packard cast a tiebreaker vote. 

The Senate’s proposed amendment of 400 percent, or $124,800 for a family of four, could prove contentious in the House. On May 2, the House voted to kill Senate Bill 442, the Senate’s version of HB 1665 that had raised the cap to 400 percent. 

“Although this bill raises the EFA eligibility level to 400%; it does not achieve the preferable, more inclusive level of 500% as passed by the House earlier this session in HB 1665,” wrote Rep. Rick Ladd, a Haverhill Republican and chairman of the House Education Committee, in a report to the House ahead of the vote.

Democrats have opposed raising the income cap, arguing that the education freedom accounts – which are funded through the state’s Education Trust Fund – spend too much money toward nonpublic school expenses at their current income cap.

But Republicans have argued that increasing the cap would allow more lower-middle-class families to access the funding, giving them greater school choice if they are unsatisfied with their local public school.

On Tuesday, the Senate also amended the bill to reduce how much the state pays in administrative fees to the third party organization that runs the EFAs, the Children’s Scholarship Fund. Currently, the CSF may take up to 10 percent of the value of all the EFAs it distributes to cover administration; the Senate amendment to HB 1665 would reduce that to 8 percent. 

Sen. Tim Lang, a Sanbornton Republican who presented the amendment, did not address why he preferred a 400 percent cap to a 500 percent cap. But he noted that 400 percent of the federal poverty level – $60,240 for a one-person household – is just below the median average income in New Hampshire. 

“I think this is the existing Senate position,” he said. 

Sen. Suzanne Prentiss, a Lebanon Democrat, spoke against raising the cap, arguing that the Legislature should add better guardrails for income eligibility first. Currently, families that meet the income requirements in their first year of applying for the education freedom account program may continue to receive the funds until their child graduates from high school – even if the family’s income later rises above the cap. 

“My concern is that these are public dollars, that there is no eligibility check on this, that there could be forever and ever and ever a child whose family is fortunate enough to have their income increase, and they are not tested against (that), and so they continue on in a system that we’re funding,” Prentiss said. 

The amended bill will get a vote in the full Senate on May 16; if it passes, it will head back to the House, which must vote on whether to approve the changes, reject them, or send them to negotiations in a committee of conference.