Education Secretary Jacob Oliva speaks to superintendents about the LEARNS Act during a meeting at the Northwest Arkansas Education Service Cooperative on Mar. 10, 2023. (Antoinette Grajeda/Arkansas Advocate)
Five companies, three of whom have applied previously, responded to a request for proposals to administer Arkansas’ school voucher program after the state fired the previous vendor.
The Arkansas Department of Education is terminating its contract with its current Indiana-based vendor due to delays and failure to implement required components.
According to a list provided by the Arkansas Department of Transformation and Shared Services, proposals were submitted by Tuesday’s deadline from Merit International, Primary Class (doing business as Odyssey), Alliance for Choice in Education (doing business as ACE Scholarships), Pearl and Kleo Inc.
California-based Merit International administers the Kansas Education Enrichment Program, which provides $1,000 for eligible students to spend on approved educational goods and services. New York-based Odyssey oversees the disbursement of funds for Iowa’s Education Savings Account program. The company also oversaw Idaho’s Empowering Parents microgrant program, but was replaced by Florida-based, ClassWallet (Kleo).
Merit International, Primary Class and Kleo all previously applied to run the second year of the Arkansas’ Education Freedom Account Program.
Created in 2023 through the LEARNS Act, a sweeping education law, the EFA program provides around $6,800 per student for allowable student expenses such as private school tuition. The program is being phased in over three years with expanded eligibility until it’s open to all Arkansas students in the 2025-2026 academic year.
Kleo, parent company of ClassWallet, was the vendor for the first year of Arkansas’ school voucher program. The company applied for a solicitation issued Dec. 15 for the year’s second program, but the state canceled that request and reopened bids in February due to some confusion about the solicitation, the Arkansas Democrat-Gazette reported.
The state ultimately awarded a $15 million contract to Indiana-based Student First Technologies in April to help administer the second year of the EFA program.
Student First Technologies has struggled to implement voucher programs in Arkansas and West Virginia, according to The 74, an education-focused news site. Arkansas Education Secretary Jacob Oliva sent a letter to the company’s CEO on Sept. 16 expressing concern about missed deadlines.
Arkansas education department seeks new vendor for school voucher program
Oliva sent another letter Oct. 8 informing Students First that ADE was terminating its contract because the company “failed to deliver a fully functioning system by the deadlines established under contract.”
Additionally, the letter notes components that were delivered “had significant problems and delays” that included “unreasonably slow payment processing” and “repeated failure of the system to operate as required.”
ADE is fining Student First $563,000 in damages and penalties that is due in full by Dec. 31, 2024, the date when the contract expires. The company is expected to fulfill its contractual obligations until the contract is terminated at the end of the year, according to the letter.
State officials posted an online solicitation Oct. 9 for a new vendor to run the state’s EFA program and literacy tutoring grant program. According to the tentative timeline, proposals were due by noon Tuesday and a contract is expected to be awarded by Nov. 18.
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