From school choice to student loans: Alabama’s 2024 education year in review

BIRMINGHAM, Ala. — Alabama’s education landscape saw transformative changes in 2024, setting the state for a pivotal year ahead.

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The introduction of education savings accounts brought a shift in school choice, offering families more flexibility next fall.

Lawmakers also began tackling the financial realities of a post-COVID funding cliff and reconsidering how schools are funded statewide. Meanwhile, the first round of third-grade reading retentions under the Literacy Act wasn’t as dire as some feared, offering hope for improving literacy statewide.  In higher education, the year brought the closure of a historic college and a significant milestone in student loan forgiveness for Alabamians.

Here’s a look at the key moments that shaped Alabama education in 2024.

Alabama expands school choice with education savings accounts

Alabama lawmakers embraced a growing trend in school choice this year, passing the Creating Hope and Opportunity for Our Students’ Education Act. The CHOOSE Act will allow eligible K-12 students access to a $7,000 education savings account, or ESA, to pay for eligible education expenses, including private school tuition at participating schools. Homeschoolers can get a $2,000 ESA, up to $4,000 per family. 

Starting next fall, students in families whose adjusted gross income is less than 300% of the federal poverty level will be eligible for an ESA. Lawmakers set aside $100 million to fund the initial round of ESAs and will continue to fund ESAs with a minimum of $100 million annually. In two years, starting with the 2027-28 school year, all families will be eligible regardless of income. 

Seventeen states now have ESAs, according to school choice advocacy organization EdChoice, and more than half of these programs are concentrated in the Southeast. Research suggests that in states with universal ESAs, most participants were already enrolled in private school. Critics argue that this shifts private education costs to taxpayers, while proponents view it as a step toward educational freedom. 

Alabama does not regulate private schools, leaving an incomplete picture of private school enrollment. However, Private School Review estimates 82,000 students attend 470 private schools statewide. Enrollment varies by county, ranging from just 1% of students in Blount and Marion counties to an estimated 34% in Choctaw County.

Families interested in an ESA can apply between Thursday and April 7. The Alabama Department of Revenue is managing the program and maintains a list of participating schools and education service providers on its website.

Third grade reading scores up, now so is the cut score

School officials celebrated when spring third-grade reading scores showed significant improvement, with nearly 49,000 students – 91% of the state’s 53,500 third graders – scoring high enough to advance to the fourth grade. This marked an increase from 2023, when 43,400, or 83% of 52,500 third graders met the benchmark. 

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However, the celebration was tempered by critics, including some state board members, who argued that the cut score was set too low and didn’t reflect true grade-level proficiency. Reading experts echoed these concerns, noting that students scoring between the cut score and grade-level proficiency still required additional support as they moved to the fourth grade.

In October, after months of discussion, the state board approved a plan to raise the cut score over the next three years.

The stakes were higher this year as the Alabama Literacy Act, first passed in 2019, was enforced for the first time, allowing third graders to be held back due to reading deficiencies. While test scores got a lot of attention, passing the test wasn’t the only path to fourth grade. Students had the option to attend free summer reading camps hosted by their school district and retest later in the summer. That second test helped an additional 1,300 students advance, leaving 3,500 to find another way. 

Preliminary data shared in August showed just over 1,800 third graders held back due to reading deficiencies. 

With federal COVID relief spent, Alabama schools face funding cliff

With nearly $5 billion in federal COVID-19 relief funds for education now spent, Alabama’s schools and colleges face tough questions about what’s next. Officials and lawmakers are grappling with how to address the financial shortfall left behind and its impact on education. 

K-12 schools received $3.1 billion, while colleges and universities had access to $1.5 billion through three rounds of emergency funding passed by Congress. The funds helped stabilize schools during the pandemic, but their impact on achievement and long-term outcomes remains unclear. 

While a few schools and colleges are still spending their final dollars, deadlines have passed, and federal and state auditors are reviewing how funds were used. The Department of Examiners of Public Accounts has already flagged cases where K-12 schools failed to follow rules on bids and purchasing.

As institutions submit budget requests for the coming year, lawmakers will have over $500 million in supplemental tax revenue to distribute – but it won’t come close to replacing the lost federal support. 

The emergency funding, authorized under the CARES Act, the CRRSA Act and the American Rescue Plan, came with complex and shifting rules. With federal dollars no longer on the table, Alabama schools must now focus on how to sustain progress made during the pandemic while addressing critical budget shortfalls.

K-12 school funding formula could be overhauled

Alabama lawmakers are considering updates to the state’s 30-year-old K-12 school funding formula. Previous and current research shows the state formula is not providing enough funding nor is it being distributed in a way that best targets student needs. 

A joint legislative commission, with input from Bellwether, a nonprofit focused on improving education systems, is exploring the adoption of a weighted student formula to improve academic outcomes. Weighted student formulas provide more funding to students with greater needs and challenges such as those experiencing poverty, disabilities or learning English. While discussions have begun, decisions about the base funding amount and specific weight allocations are undecided. 

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Bellwether emphasized the flexibility the formula offers, enabling principals to direct targeted resources where they are most needed for students. 

Skeptics question whether Alabama can afford this shift without raising taxes, but finance officials say the state has enough money in reserve accounts to fund a phased rollout over five years and beyond. 

The commission is expected to meet again in late January to finalize recommendations and enact legislation to adopt the weighted student formula. If implemented, Alabama would join 44 other states, including Tennessee and Mississippi, already using weighted formulas.  

Higher education: Birmingham-Southern College closed, Alabama student loans forgiven

Two big stories stood out in Alabama’s higher education landscape in 2024: The closure of Birmingham-Southern College and the relief granted to 15,000-plus Alabamians who collectively had $1.2 billion in student loan debt forgiven by the Biden administration.

In May, after 168 years, Birmingham-Southern College closed its doors. Despite needing $38 million to remain open, the college’s efforts to secure funding fell short. Alabama lawmakers, led by BSC alum Sen. Jabo Waggoner, R-Vestavia Hills, created a loan program designed to help colleges in financial trouble. The power to grant that loan rested with Treasurer Young Boozer, who denied the request – not once, but twice. 

Birmingham-Southern’s financial struggles didn’t happen overnight. Some pointed to 2017 as a turning point when the college halved its tuition in an attempt to attract more students. While this bold move initially gained attention, it ultimately underscored the challenges many small colleges face. 

The college’s closure is not an isolated case. Spring Hill College in Mobile, which also halved their tuition 2021 – the same year Marion’s Judson College shut down – continues to grapple with declining tuition revenue. These trends illustrate the mounting pressures on smaller colleges to adapt or risk closure. 

Amid these challenges, there is some good news for higher education in Alabama. Enrollment in both two-year and four-year colleges has been rising steadily since 2022, in contrast to the national trend of declining postsecondary enrollment. 

Another bright spot was the progress made in addressing student loan debt. Through October, more than 15,000 Alabamians benefited from the Public Service Loan Forgiveness program, collectively having over $1.2 billion in federal student loan debt forgiven. However, this represents only a fraction of the 657,200 Alabamians who owe $24.8 billion in federal student loans as of Sept. 30.  

The PSLF program, signed into law by President George W. Bush in 2007, has been criticized due to its high rejection rate – 99% of applications were denied through 2021. However, reforms have addressed procedural issues, leading to a dramatic increase in approvals. Since then, more than a million borrowers have had $78 billion in student loan debt forgiven through the PSLF. 

The broader impact of federal student loan forgiveness extends beyond public service workers. Since Biden took office, nearly $180 billion in student loans for nearly five million borrowers have been forgiven.