Proposed changes in rules for Arkansas education accounts released for public comment

Proposed rules changes to the Educational Freedom Account program, including a ban on the accounts' use for team sports, are likely to spark several rounds of public comments in the coming days, Arkansas Department of Education officials predict. A Russellville lawmaker who was one of the leading sponsors of the sweeping legislative package that created the accounts program said she and her co-sponsor were also in conversations with the Education Department and Gov. Sarah Huckabee Sanders' office to ensure account funds that have been allowed for sports-related expenses aren't "unintentionally (tied) up" in efforts to tighten the program. The comment by Republican Sen. Breanne Davis came after the state Board of Education voted Thursday to release the revisions for a 30-day public comment period. Public comment began Saturday and will end Dec. 16, said department spokeswoman Rachel Starks. The department will host public comment hearings Dec. 2 at 10 a.m. and 5 p.m., while written comments can be sent to ADE.RulesComments@ade.arkansas.gov. In the board's discussion before its vote, several members likewise expressed concerns about the revisions, especially regarding the section on team sports, with one suggesting the head of the Office of School Choice should have warned the board during a work session the previous day "that we're going to be walking into fire." State leaders have been at work for months on the revised rules, which they said are meant to clarify the program's operations and limit the misuse of its funds. The General Assembly had previously set a Dec. 31 target for the rules to go into effect, though multiple comment periods would likely delay achievement of that goal to at least early next year. Arkansas is roughly three months into the traditional school year, the first in which the accounts program opened to all students. A total of 44,204 students are currently participating in the program, a massive increase from its first two years when state law capped participation, according to Starks. FACTS, the firm that manages applications for the program, projected in a Sept. 18 report that the total amount of accounts program funds to be awarded would be roughly $326 million, though education officials have shied away from making a public estimate of the cost themselves. According to department figures, in the 2023-24 school year, the program's first year, 5,548 students participated at a cost of $37.3 million. The following year, 14,256 students participated at a cost of $93.8 million. Definitions, whether new, expanded or clarified, make up many of the proposed changes to the rules. Definitions that were added or modified in the proposed rules include those for extracurricular and co-curricular activities, the intentional and unintentional misuse of funds, ordinary and necessary expenses, qualifying expenses and student growth and development. They would also establish a new application window of Feb. 1 to June 1, with the option to reopen the window if funding is available. Under the proposed rules, the vendor that operates the program's online platform -- currently ClassWallet -- could receive only 2% of funds allocated to each student account for administrative purposes, down from the 5% described in the program's current rules. The proposed changes would also lay out a random audit process for families and providers, as well as an appeals process. In his presentation to the state board during Wednesday's work session, Assistant Commissioner for School Choice and Parent Empowerment Darrell Smith did not explicitly mention that team sports would not be eligible for use of account funds. Team sports are referenced in the proposed revisions defining extracurricular activities. While extracurricular activities would refer to certain "supervised, structured non-academic" activities, the revised rules exclude "team sports or club sports, whether recreational or competitive." They also exclude the following team or club sport components: • Equipment; • Registrational fees; • Travel costs; • Equipment costs; • Dues; and • Other associated costs. Board member Gary Arnold said during Thursday's regular board meeting that, though the rules were not yet formally released for public comment, Arkansans had already raised concerns about the changes to how the program handled team sports. Smith said he believed the section in question was in earlier drafts of the revised rules prior to the enactment of Act 920 of 2025, a bill sponsored by Davis that caps families' use of account funds on extracurricular activities or transportation costs at 25%. "Without the cap, a lot of the money that obviously is there to help educate a child could have been spent on travel teams, elite sports teams, a lot of those types of things," Smith said. He added, "That was the original reason that it was put there." "I think the way that we've crafted it, it might go too far," replied board member Jeff Wood. He added that he had heard from lawmakers regarding the exclusion of team sports and expressed skepticism that this was intended by lawmakers when approving Act 920. Arnold and Wood both chided Smith for not mentioning the exclusion of team sports from account funding in the revised rules during the work session. Arnold said Smith's presentation contained "lots of great information," but athletics was a "volatile" topic that he should have known to bring up when briefing the panel. "Isn't it your job to kind of warn me that we're going to be walking into fire?" Arnold asked. Smith replied that "we didn't try to hide anything," and that the department "had to make some judicious decisions" about what to present at the session. "We could have spent the whole day literally going through the way that this thing was written," he said. Wood urged the board to consider rejecting the department's request to release the proposed revisions for public comment so the department could rewrite the changes. Department officials asked that the board not delay the release any further, though, as it would be unable to formally receive public feedback on the revisions until the board approved the release. Stacy Smith, deputy commissioner of the Division of Elementary and Secondary Education, said the discussion warranted another work session in which the board members could ask more deliberate questions while still allowing the public comment period to take place. If the comments result in substantive changes to the rules, they are released for an additional 30 days. Once the public comment period ends for a final time, the board must vote on whether to approve the proposed rule. If approved, it will be filed for review by the Arkansas Legislative Council's Administrative Rules and Regulations Subcommittee. "We're anticipating a lot of public comment; we're anticipating some more changes," Stacy Smith said. "I'm not thinking it's going to be a 30-day public comment. Again, it's probably going to be maybe one or two or three rounds." Davis, who did not confirm whether she spoke with Wood, said Friday that she was participating in conversations with department officials and the governor's office, "making sure that we're allowing private school students who take advantage of EFAs, and also homeschool students who take advantage of EFAs, that they're still able to participate in team sports just like we do in public schools." Her goal in those talks is to "ensure we don't drill down so far and prohibit some things that we actually don't mean to prohibit," she said. "I think our main priority is just ensuring that this program is sustainable and it works for students and families," Davis said. Governor's office spokesman Sam Dubke did not directly respond to questions about the proposed revisions, instead repeating a statement he provided in late October about big-ticket purchases from account holders that received the department's approval: "Governor Sanders and her administration have taken several steps to ensure EFA reimbursements are focused on education, including by signing Act 920 ... and recently launching an AI screener in the ClassWallet platform to flag unusual expenses more quickly. As the EFA program enters its third year, the Governor continues to engage the Department of Education, legislators, and stakeholders to refine the program, and the Department of Education has partnered with the Office of Inspector General to review EFA expenses holistically." At least some states with similar account programs allow for the use of account funds for team sports. For instance, such expenses are allowed in Florida. Its Family Empowerment Scholarship authorizes the purchase of sports equipment and uniforms, according to purchasing guides by Florida-based nonprofit Step Up for Students. Arizona's Empowerment Scholarship Accounts meanwhile consider purchases for enrollment in sports leagues to be allowable as "supplemental material" that requires corresponding curricula, according to that program's handbook. Account holders in Arizona can also use them to pay for extracurricular programs at public schools, though use of the funds for the purchase of uniforms for such programs is only allowed if they are specifically required by the program. With support from the ADG Community Journalism Project, LEARNS reporter Josh Snyder covers the impact of the law on the K-12 education system across the state, and its effect on teachers, students, parents and communities. The Arkansas Democrat-Gazette maintains full editorial control over this article and all other coverage.