Education savings accounts are designed to benefit all children, whether they attend public, private, religious, or home schools. For a child attending any school, this money could be used for fees, books/supplies, a home computer, transportation costs, special diagnostic/remedial services, after-school programs, or a tutor. For private and religious school children, the accounts could also be used to cover tuition. Education savings accounts would empower parents to deal with the specific needs of their own children. For example, if a child has a special learning disability, such as dyslexia, which requires special attention, dollars could be applied directly on that problem. Or perhaps the child has a math deficiency and needs a tutor, or there is a need for transportation to an after-school program.All these specific needs cannot necessarily be addressed by general education funds, but could be addressed by education savings accounts. Parent-directed dollars would get right to the heart of the problem.

Who Could Establish an Education Savings Account?
Almost any individual or corporation could establish an education savings account for a child, though each child could have only one account established in his/her name with a total maximum annual contribution of $2,000. Thus, grandparents, relatives, and friends could set up an education savings account, and corporations could use them as a way to assist with the education of low-income children. As is the case with existing college education accounts, certain high-income taxpayers would be disqualified from contributing to the accounts. Although contributions to an ESA would not be tax deductible, the interest that would accumulate would be tax free, and withdrawals would not be subject to taxation if used for qualified expenses.

Who Would Benefit from Education Savings Accounts?
According to estimates released by the Joint Committee on Taxation, 14.3 million people would take advantage of the accounts by the year 2002, and 10.8 million of those would be parents with children in public schools. In addition, the committee found that families with annual incomes of $75,000 or less would receive 70 percent of the total tax benefit provided by the accounts, while families making $50,000 or less would receive 46 percent of the tax benefit. Senator Paul Coverdell (R-GA), who first proposed education savings accounts, has pointed out that if a parent were to place $2,000 each year in an ESA starting in a child's first year, then, assuming a 7.5% interest rate, $14,488 would be available by the first grade, $36,847 by the time the child starts junior high school, and $46,732 when the child starts high school. A family where each parent earns $35,000 annually could reduce its tax obligation by an estimated $5,000 by the time the child reaches age 14. Parents who were to use the accounts solely for a child's higher education would benefit from the provision that increases the annual allowable contribution from $500 (the current maximum) to $2,000.

Groundswell of Popular Support
The 1998 Phi Delta Kappa/Gallup Annual Poll of the Public's Attitudes Toward the Public Schools found overwhelming public support for education savings accounts. Sixty-eight percent of all respondents and 74 percent of public school parents support ESAs.

Encourages Investment in Education
Although the tax relief provided by edu-cation savings accounts is rather nominal, it is nonetheless significant in that it encourages parents to invest in their children's education and attempts to ease the burden they face with the costs of K-12 education. The program is, after all, driven by the same principles that drive tax relief to offset child-care costs, college costs, and a host of other costs that lawmakers consider when they try to equalize the tax burden. According to the Congressional Research Service, tax allowances for higher education alone include the HOPE and Lifetime Learning credits, tax deductions for student loan interest payments, and tax incentives to encourage savings through college IRAs, U.S. Savings Bonds, and state prepaid tuition programs. Isn't it time for some form of assistance to help parents with the costs of elementary and secondary education?

Parent Assistance
It is hard to imagine a more fundamental obligation for parents than that of directing the proper upbringing of their children. Education savings accounts would provide parents some practical assistance with this awesome responsibility and would encourage them, and others, to invest generously in education.

Courtesy National Association of Independent Schools (NAIS). Visit the NAIS web site at www.NAIS.org, which contains a searchable database of independent schools and hot links to school web pages. For a list of member schools, call (202) 973-9743.