You’ve been using your Empowerment Scholarship Account for a while, but life circumstances change. Maybe you’re considering public school again, or your child is graduating. Whatever the reason, leaving the ESA program isn’t as simple as stopping spending—there are specific notification requirements you need to follow. Understanding these steps protects you from compliance issues and ensures a smooth transition.
The Formal Withdrawal Process: Why It Matters
ESA withdrawal isn’t automatic, even if you stop using funds. According to Arizona’s ESA program guidelines, parents must formally notify the state and follow their process to exit the program. This formal notification serves multiple purposes: it prevents enrollment conflicts with public schools, avoids state audits or compliance flags, and ensures your account status is properly closed in state systems.
Failing to formally withdraw can create significant complications. If you re-enroll your child in a public or charter school without properly closing your ESA account, the state cannot fund your child’s education twice—public school funding and ESA funding are mutually exclusive. Families who skip the formal withdrawal process may face account suspension, termination, or even be referred to the State Board of Education for collections if funds aren’t properly accounted for.
Four Ways ESA Accounts End
Arizona’s ESA program recognizes four distinct paths for leaving: withdrawal, non-renewal, exited contracts, and termination. Each has different requirements and implications.
Withdrawal occurs when a parent voluntarily removes their child from the ESA program mid-contract year by completing the Close Account Request Form. If you withdraw during a contract year or before the end of a quarter, any tuition payments must be prorated for the days your child actually attended, and additional funds should be refunded to your ESA debit card before your student returns to public or charter school. If you end your ESA contract at the end of a quarter, all expenses must be properly submitted before closure.
Non-renewal happens when families simply choose not to renew their annual ESA contract. Exited contracts apply specifically to graduating students—when your child graduates from high school or obtains a GED, you must notify ESA to receive an exited contract that allows you to use remaining funds for post-secondary education for up to four years. Termination occurs when the state ends your contract due to violations such as enrolling in public school without notification, misspending funds, or failing to submit required expense reports.
Step-by-Step: How to Properly Notify and Exit
The Arizona Department of Education provides a specific Close Account Request Form that parents must complete to formally withdraw. This form is available through the ESA online portal at the address provided in the ESA Parent Handbook. Simply stopping spending or deciding to re-enroll your child isn’t sufficient—the formal notification ensures your account is properly closed in state systems.
Before you submit your withdrawal notification, verify that all quarterly expense reports are up to date. Arizona requires parents to submit complete invoices and credentials quarterly, and any outstanding documentation must be resolved before account closure. If you’ve used the ClassWallet prepaid debit card, ensure all transaction receipts have been submitted by quarterly deadlines.
If your child is graduating or obtaining a GED, the process differs slightly. You’ll receive a notification from ESA asking you to confirm your child’s graduation status through the ESA Portal. Responding accurately is critical—providing false information about graduation can result in account suspension or termination. After graduation, notify ESA immediately to receive an exited contract, which allows you to use remaining funds for eligible post-secondary expenses.
What Happens to Your Remaining Funds
Understanding what happens to unused ESA funds depends on how and when you exit. If you withdraw mid-year to return to public school, any tuition already paid must be prorated, meaning you’ll need to return unused portions to your ESA account before re-enrolling. For graduating students with an existing contract, remaining funds stay available for up to four consecutive years for eligible post-secondary expenses, including community colleges, trade schools, and vocational programs.
However, if your account is terminated for violations or if you don’t use funds within the allowable timeframe, remaining funds return to the state general fund. This makes proper notification and compliance especially important—you don’t want to forfeit funds your family could have legitimately used.
What You Can Do Right Now
- Review your current contract status: Log into your ESA Portal and verify your contract end date, funding quarter, and any pending expense submissions that need attention.
- Determine your exit path: Decide whether you’re withdrawing mid-year, not renewing, or preparing for graduation. Each has specific forms and timelines.
- Gather documentation: Before notifying ESA, ensure all expense reports are current, all receipts are submitted, and any tuition payments are reconciled. Incomplete documentation can delay your account closure.
- Complete the formal notification: Use the Close Account Request Form available through your ESA Portal, or respond to graduation notifications promptly. Don’t assume stopping spending is sufficient—formal notification is required.
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