New York company will administer Iowa school scholarship program

New York-based education technology company Odyssey will manage Iowa’s private school scholarship program, Gov. Kim Reynolds’ office announced Tuesday.

Iowa is beginning the contract negotiation process with Odyssey, which was selected from four companies that applied to administer the program, according to a news release. The state issued a request for proposals on Jan. 26, two days after the governor signed the “Students First Act” into law.

The governors’ office did not respond to a question about how much the company would be paid. Opponents of the ESA program have questioned whether using a third-party vendor to administer it would create costs higher than the estimates provided by legislative analysts and the governor’s office. Critics also pointed to issues with transparency in other states’ programs where ESA funds were misused by educational companies and parents.

The company currently runs similar programs in Arizona, as well as Idaho’s “Empowering Parents” grant program. It was selected “based on its ability to manage all aspects of program administration, including applications, financial transactions, compliance, fraud prevention, and customer service.”

Iowa’s private school scholarship program will kick off in the 2023-2024 school year, providing an account with roughly $7,600 — an equivalent to “per pupil” funding designated to Iowa public schools — for each student to use on private school tuition and associated costs at accredited K-12 institutions.

The program will eventually cover all Iowa students, but in the first year only current kindergarteners, Iowa public school students and private school students with a family income of 300% or below the federal poverty line will be eligible to receive ESAs. The income limit lifts to 400% of the federal poverty line for current private school students in the program’s second year before being removed entirely in year three.

The program will cost roughly $345 million per year once fully implemented, the Legislative Services Agency estimated, and will cost $106.9 million in the upcoming fiscal year.

Once a contract is finalized, a team of government officials with the governor’s office, Department of Education, Department of Management, and Office of the Chief Information Officer will work with the company to implement the platforms used for ESA application and accounts. Details on applications, including a timeline and income eligibility verification, will be provided in the coming weeks, the governor’s office said.