Indiana private school voucher spending tops $497M as enrollment slows

Participation in Indiana’s Choice Scholarship Program grew by about 8.5% in the 2024-25 school year — marking a slowdown after record-setting enrollment growth in prior years.

Even so, state spending reached nearly half a billion dollars on the private school voucher program, according to a new report released by the Indiana Department of Education. That’s up from $439 million spent on the program during the 2023-24 school year.

The latest round of taxpayer-funded scholarships totaled roughly $497.2 million, representing a 13.2% increase compared to what the state paid the previous year. And despite an enrollment slowdown, more Hoosier students than ever before are participating — and more schools are accepting vouchers, too.

In total, 76,067 students received a Choice Scholarship during the 2024-25 school year, up from 70,095 in 2023-24. The number of private schools participating in the program also rose, from 357 to 373.

Voucher student breakdown

The average award in 2024-25 was $6,536. Vouchers are calculated as either 90% of a student’s local public school funding or the full amount of their private school tuition and fees, whichever is less.

But participating schools reported an average tuition of $8,369 — meaning most families still paid out-of-pocket beyond the voucher amount.

More than 54,700 students received the 90% public-funding amount, per the IDOE report. Roughly 21,300 students received scholarships that covered their full tuition.

More than 45% of participating private schools now charge over $7,000 per year in tuition and fees, while fewer schools offer tuition below $5,000, according to the state report.

As a result, scholarships did not cover the full cost of tuition for 54,767 students enrolled in the voucher program, meaning families were responsible for paying a combined $133.9 million out-of-pocket for school costs. That amounts to an average of $2,447 per student.

The report additionally noted that if all voucher recipients had instead attended their traditional public public schools, the state would have spent approximately $567.8 million on their education. That’s because vouchers are paid at a lower amount than public school funding.

But many students have never attended public school, meaning the state obligation is new.

The majority of voucher users in the last school year — nearly 70% — had no record of attending a public school in Indiana, an increase of about three percentage points from 2023-24. The IDOE report said the rise was likely attributed to “students who were already enrolled at their Choice school now qualifying without prior attendance at an Indiana public school.”

Retention rates are up. About 76.8% of students who used a voucher in 2023-24 returned to the program this year, compared to 64.3% the year before.

Data shows white students make up the majority of voucher users at 64.29%. Hispanic students account for 17.53% of voucher participants, while Black students make up just shy of 8.82%. Those demographics are similar to the prior school year.

The latest data further reported that the average family income among voucher recipients was $102,843 — well below the income ceiling of roughly $230,000 for a family of four, but 50% higher than the annual income for an average Hoosier family, which is estimated to be about $70,000, according to the U.S. Census Bureau.

State spending goes up — but so do school costs

Indiana lawmakers have steadily expanded the program since it launched in 2011, making it one of the largest voucher systems in the nation — and among the first to go fully universal.

Ahead of the 2023-24 school year, participation surged by more than 30% after state lawmakers lifted income caps to include nearly all Indiana families.

The expansion boosted funding from $311 million to $439 million in a single year and made vouchers are available to Hoosiers earning up to 400% of the amount required for a student to qualify for the free or reduced-price lunch program, or roughly $230,000. Only 3.5% of Indiana families were estimated to have annual incomes above those eligibility guidelines.

The incoming ceiling was removed entirely during the most recent legislative session and allows all Hoosier families to tap into private school voucher dollars beginning with the 2025-26 academic year.

The previous two-year state budget passed in 2023 allocated more than $1 billion for Choice Scholarships. The new biennial budget, which takes effect Tuesday, earmarked more than $1.2 billion. Voucher enrollment for the upcoming school year, along with total program costs, are still to be determined, however.

The Indiana Capital Chronicle is an independent, nonprofit news organization that covers state government, policy and elections.