April 3, 2024
by Cynthia Howell | Arkansas Democrat-Gazette
Student First Technologies is the state’s choice to manage the distribution of millions of dollars in taxpayer funds to private schools and other service providers on behalf of students participating in the state’s new voucher and/or literacy tutoring grant programs.
Brooke Hollowoa, communications director for the Arkansas Department of Transformation and Shared Services, the department that conducted the search, said Wednesday that the Bloomington, Ind., company is the “anticipated awardee” of a contract that is worth an estimated $15.17 million over seven years.
Student First Technologies was one of five companies that submitted proposals for the work and one of four that qualified for consideration.
Student First is now on track to replace Kleo, Inc., which does business as ClassWallet of Miami, Fla., as the operator of an online platform for financial transactions between the state and private schools and other vendors for families participating in the Educational Freedom Accounts program and literacy tutoring grants.
ClassWallet managed the state payments to the private schools and vendors in this 2023-24 school year, the first year for the Arkansas Educational Freedom Account program.
The Educational Freedom Account program — authorized by Gov. Sarah Huckabee Sanders’ 145-page LEARNS Act, or Act 237 of 2023 — greatly expands the use of state taxpayer funding for tuition and other private and home school expenses.
A total of 5,915 students were approved for the accounts this year, of which 5,406 are actually using the publicly funded vouchers for costs at more than 90 private schools. The state Department of Education has budgeted $46.7 million for the program, state Division of Elementary and Secondary Education Kimberly Mundell has said.
The number of participating students could go as high as 14,000 in the 2024-25 school year — equal to 3% of the state’s public school enrollment this year.
In the first year of the accounts, students eligible to participate had to be entering kindergarten, have special education needs, be children of active military personnel, have been attending a state-applied F-graded school or Level 5 school district last year or have experienced foster care or homelessness.
The eligibility requirements expand for the coming year to include students who attended D- and F-graded schools this year, or are children of military veterans or emergency responders.
All kindergarten-through-12th grade students will be eligible for the private school vouchers starting in the 2025-26 school year.
The accounts currently provide up to $6,672 per student for this 2023-24 school year — unless the students were part of the now-discontinued Succeed Scholarship Program. The former Succeed Scholarship students qualify for $7,413, which is the amount of state and local tax aid guaranteed for students in public schools.
In the coming 2024-25 school year, the Educational Freedom Accounts will provide up to $6,856 per student, which is 90% of the $7,618 minimum funding per public school student. Former Succeed Scholarship students will also be eligible for up to $7,618 to apply to private school tuition and related costs.
Literacy tutoring grants of up to $500 each will be available to families of children in grades kindergarten through three.
According to a price sheet attached to the state’s request for proposals for management of the financial transactions, prospective contractors were told to assume there will be 14,000 participants in the Education Freedom Account system with scholarship funding of $97 million in the coming 2024-25 school year.
There are an anticipated 17,000 students who will seek $500 literacy tutoring grants with scholarship funding of $8.5 million.
The design of the accounts and tutoring programs prohibits payment of state money to families, which could be considered taxable income to the family, Dustin Wood, director of school choice and parental empowerment for the Arkansas Division of Elementary and Secondary Education, has said.
Instead, the private school or vendor sends a bill for services to a family, the family uploads the invoice to the student’s account and the account managing company sends the money to the vendor or school.
Four companies submitted proposals that qualified for consideration to manage the distribution of state funds to private schools and other service providers.
Besides Student First Technologies of Bloomington, Ind., those companies and their bids were:
Primary Class, Inc., doing business as Odyssey of New York City; $16,430,000
Kleo, Inc., doing business as ClassWallet of Miami, Fla.; $18,584,500
Merit International, Inc., of Melbrae, Calif., $16,275,000
The Department of Transformation and Shared Services conducted the search for a company to manage the payments on behalf of the Arkansas Division of Elementary and Secondary Education.
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