New Hampshire’s EFA Program and the Claims Surrounding It

New Hampshire’s Education Freedom Account (EFA) program has become a frequent target of criticism as it has expanded statewide. Opponents of the program often raise concerns about school funding, property taxes, and which families benefit. A review of state education finance data, however, shows that many of these claims rely on incomplete or misleading assumptions about how public education is funded in the Granite State.

How the EFA Program Works

The EFA program allows eligible families to use a portion of the state’s per-pupil education aid for approved educational expenses outside the traditional public school system, including private school tuition, tutoring, special education services, and homeschooling costs.

For fiscal year 2025, the state’s base adequacy grant is $4,265.64 per student, according to the New Hampshire Department of Education. While the state sends about $7,100 per pupil on average to public school districts once additional differentiated aid is included, students participating in the EFA program typically receive funding closer to the base adequacy level, with limited adjustments based on need.

That amount is substantially lower than what public schools spend per student. State data show average per-pupil spending exceeds $21,000 statewide when state and local funding sources are combined. Local education funding—raised primarily through property taxes—remains with the school district even when a student exits to use an EFA.

Claim: EFAs Defund Public Schools

Critics argue that EFAs divert funding away from public schools. In practice, only a portion of state aid follows a student who participates in the program. School districts retain all locally raised revenue associated with that student, while the district no longer incurs the full cost of educating them.

Because the EFA grant is significantly smaller than average district spending, the financial impact on school budgets is limited. Even when viewed in aggregate, EFA spending represents a small share of total statewide K–12 education expenditures. Public school spending has continued to increase since the program’s creation.

Claim: EFAs Are Driving Property Tax Increases

Property taxes in New Hampshire are set locally and are driven primarily by municipal and school district budgets. School spending—including salaries, benefits, special education services, transportation, and capital projects—accounts for the largest share of local budgets.

EFAs are funded through state education aid and do not draw on local property tax revenue. Districts experiencing rising property taxes often have minimal participation in the EFA program, reflecting that local spending decisions, rather than state aid policies, remain the primary driver of tax rates.

Claim: EFAs Primarily Benefit Wealthy Families

Public schools in New Hampshire serve students from families of all income levels and have no income cap. The cost to taxpayers for those students routinely exceeds $21,000 per pupil per year.

By comparison, EFAs are capped at the value of the state adequacy grant and are subject to eligibility requirements. Program data indicate that many participating students come from low- and middle-income households, include children with disabilities, or previously lacked access to educational options that met their needs. Families using EFAs do not access school facilities, capital investments, or long-term pension systems funded through public school budgets.

Claim: The State Does Not Adequately Fund Education

State funding for education has increased significantly in recent budget cycles. The base adequacy grant has risen steadily, and total state aid to school districts is at record levels.

Despite these increases, property taxes have continued to rise in many communities. The reason lies in New Hampshire’s local control model. When school districts approve budgets that grow faster than inflation and enrollment growth, local taxes increase regardless of changes in state aid. Increased state funding can offset some costs, but it does not override local spending decisions.