Less than a year after launching its largest-ever school voucher program, Utah is ending its contract with ACE Scholarships, the organization it hired in November 2023 to manage the $82 million taxpayer-funded initiative.
Ryan Bartlett, a spokesperson for the Utah State Board of Education, told The Salt Lake Tribune on Wednesday that the contract “is being terminated for convenience.”
“We’ve gained some insights into the complexities and the operational nuances of the program in practice,” Bartlett said. “Because of those complexities, and the nature of the program, [lawmakers determined] that at this time, right now, we would terminate the contract with ACE Scholarships.”
The state school board will next issue a new “Request for Proposal,” or RFP, which is a formal process to solicit new bids from vendors to manage the program.
Bartlett said USBE notified ACE early this month of its intent to end the contract, which will terminate May 15. The RFP will be released “as soon as possible,” though Bartlett could not name a specific date.
USBE expects to have the next program manager in place by May 16, he said. He added that ACE could still reapply and that the state would consider its application alongside others.
ACE officials said in a statement Wednesday that it’s been “an honor” to help “thousands of Utah students.”
“We are grateful for the trust families placed in us, reflected in the 89% customer satisfaction rate we’ve earned during our management of the program,” the statement read.
ACE officials said they will “evaluate the opportunity to reapply at a later time.”
“For now, ACE is focused on supporting the families currently in our care during this transition,” the statement added.
ACE’s original deal — and new voucher program changes
Under the bill that created the Utah Fits All scholarship in 2023, the state school board was required to hire a program manager to administer school vouchers. After a bidding process, it awarded a $9 million contract to ACE in November of that year.
The contract originally ended in June 2028 unless “terminated early,” according to a copy of the contract The Tribune obtained. ACE was supposed to receive about $2 million a year throughout the duration of the contract, the document indicates.
ACE, also referred to as the Alliance for Choice in Education, is a Colorado-based nonprofit that offers private school scholarships to low-income students to help expand school choice in the U.S., according to its website. The organization is active in 12 states, including Utah, the website states.
ACE’s early contract termination comes amid several significant changes to the Utah Fits All scholarship program, which ACE has referred to as an “education savings account” program. Lawmakers approved the changes this year under HB455, which Gov. Spencer Cox signed into law earlier this month.
Right now, the program provides eligible students with an $8,000 scholarship, regardless of whether recipients are homeschooled or attend private school. The main rule: In order to receive the voucher money, students cannot be enrolled in public school full time.
Once awarded, the scholarship could then be spent on a range of “educational expenses,” including private school tuition, tutoring, homeschooling expenses and even entirely on extracurricular activities, such as violin or swim lessons.
The changes start next academic school year: There will be new limits on spending for certain extracurriculars — as well as varying scholarship amounts, depending on a student’s age and whether they are homeschooled.
Homeschoolers age 5-11 will receive a $4,000 scholarship, for example, and homeschoolers age 12-18 will qualify for $6,000. Students attending private schools will still receive the full $8,000, regardless of age.
Additionally, extracurricular and physical education expenses will both be capped at 20% each — or 40% total — of a student’s total scholarship amount.
The scholarship program is also slated to see a $20 million funding boost in fiscal 2026, raising state voucher spending to over $100 million. Lawmakers approved the cash infusion during the legislative session but Cox has not yet signed it into law.
The bill that introduced changes to the program did not “provide a directive” to terminate the state’s contract with ACE, Bartlett said, but it did “provide further clarification should a transition event occur.”
Applications for the Utah Fits All scholarship opened to renewing applicants on Jan. 21 and to new applicants on March 3. Bartlett said families can continue to apply through the Utah Fits All website until the portal closes May 1.
Utah Education Fits All, a nonprofit that is unaffiliated with the voucher program but aims to provide information about it, planned to host a virtual town hall at 6:30 p.m. Wednesday meant to address “recent changes to the Utah Fits All law.” The Utah State Board of Education’s deputy superintendent of operations, Scott Jones, was expected to attend.
“We are working with ACE closely to ensure that we have the information we need to make this transition process as seamless as possible,” Bartlett said.
Early voucher program challenges
The Republican-led voucher program was approved in just 10 days during the 2023 legislative session with an initial allocation of $42.5 million.
But that allocation was nearly doubled last year to $82 million before the first application period launched. Lawmakers said the move was meant to accommodate additional interest.
It’s inaugural year didn’t come without challenges, which lawmakers and state board leaders have acknowledged.
“A lot of times, when a new program is implemented, there are going to be some issues that you see that come up in the first year,” Bartlett said. “Those are things that we hope to resolve during the ongoing process.”
The first of those challenges included technical difficulties on the day the Utah Fits All online application portal was meant to launch in March 2024. Due to a server issue with Amazon Web Services that impacted websites nationwide, the portal had to be briefly shut down while ACE worked to get the site up and running again.
The second came in late January, when USBE identified at least 177 students known to have been awarded $8,000 vouchers who seemed to be enrolled in public schools, which is prohibited under state law.
State school board officials previously told The Tribune that many of the discrepancies likely stemmed from two scenarios: In one, a student may have received a scholarship but chose not to use it, then proceeded with public school enrollment without touching the voucher funds and without notifying ACE.
In the other, a student’s family may have used some or all of the Utah Fits All scholarship before later withdrawing from the program and enrolling the child in public school without notifying ACE.
The Utah Education Association, the state’s largest teacher’s union, is also challenging the Utah Fits All program in court.
In a lawsuit filed last May, the union argued the program is unconstitutional because it uses income tax dollars to fund vouchers meant to cover private school and homeschooling expenses. Third District Judge Laura Scott heard arguments in December but has not yet issued a ruling. ACE Scholarships is listed as a defendant in the case.
