Arizona Governor Raises Questions About Data Breach That Exposed ESA Student Info

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A data breach exposed the personal information of thousands of Arizona students enrolled in the state’s school voucher program, according to Gov. Katie Hobbs, but the state’s top education official says it’s not a problem.

Earlier this month, ClassWallet, the online financial administration platform that handles payments for Arizona’s Empowerment Scholarship Account program, suffered a data breach that jeopardized the names and disability categories of thousands of Arizona students. The incident triggered an investigation by the Arizona Department of Homeland Security, according to a letter sent from Hobbs, a Democrat, to Superintendent of Public Instruction Tom Horne, a Republican, on Friday.

Over 60,000 Arizona students are currently enrolled in the ESA program, more than in the state’s largest public school district, Mesa Unified. A recent enrollment explosion was the result of a universal expansion passed last year by the GOP-controlled legislature. Previously, only public school students who met specific criteria, such as being a foster child, being part of a military family or having special education needs, qualified for a voucher that roughly equals the cost of teaching them in a public school. That voucher can then be used for homeschooling efforts or private school tuition.

The expansion has been widely denounced by Democrats and public school advocates as bankrolling the education of wealthy Arizona families at taxpayer cost. The initial wave of new applicants last year were found to be 75% private school students with no prior history of public school attendance and, as of June, those students continue to make up nearly half of ESA recipients.

Hobbs, a long-time critic of the expansion who earlier this year unsuccessfully attempted to repeal it, rebuked Horne in Friday’s letter about the data breach. She requested a detailed response by Aug. 3 explaining his administration’s actions regarding the breach, preventative measures in place for the future, how the department has notified parents, what laws may have been violated by the exposure of private educational information and whether or not the department has referred the problem to the state attorney general for investigation.

“It is my responsibility to ensure the safety and security of our state, our agencies, and our people,” Hobbs said, in a press release accompanying the letter. “Arizona students and families deserve to know that proper measures are in place to protect their personal information.”

In a letter released shortly after Hobbs’ request, Horne shot back that the incident was a nonissue and no cause for alarm. Once a breach was identified, Horne said, his office contacted ClassWallet. The company responded with assurances that the problem had been resolved internally and only one user had actually been affected.

“Parents were not notified because of the finding that it was a unique and isolated incident that affected no other users and was corrected right away,” Horne wrote.

Horne criticized Hobbs for not seeking answers to her questions about possible legal violations with the state department of homeland security.

“Since the department of homeland security is part of your office, we would have thought you would have checked with them before writing your letter that is full of wild exaggerations,” he wrote.

Data breach spat caps week of ESA scrutiny

The news of a data breach comes on the heels of a week of renewed criticism leveled against the ESA program and closely shadows the Aug. 1 deadline for the education department to select a vendor to oversee the program’s financial administration — which until now has been ClassWallet.

On Monday, Attorney General Kris Mayes, a Democrat, issued a consumer warning notification for parents considering taking advantage of school vouchers. She advised that leaving the public school system puts students in danger of losing critical non-discrimination protections.

“Families should know that when they accept an ESA, they lose protections from discrimination related to a child’s learning abilities, religion and sexual orientation,” Mayes wrote.

Under state law, schools that accept vouchers aren’t required to abide by the same policies or laws that public schools do. Public school advocates have warned the loophole allows institutions that accept vouchers to discriminate against LGBTQ Arizonans while receiving state funds without legal repercussions, as happened in the case of two fathers who were told they weren’t welcome on their daughter’s private school campus earlier this year.

Also on Monday, two high ranking program administrators, Director Christine Accurso and her assistant, Operations Director Linda Rizzo, suddenly resigned, raising eyebrows among critics of the program. In her letter, Hobbs questioned their departures so soon before the first school year when school vouchers will be widely available.

“As students and parents prepare for a new school year, the sudden and unexpected departures of Director Accurso and Linda Rizzo raise concerns and questions about the administration of the ESA voucher program and the protection of student data under your supervision,” she wrote to Horne.

The ballooning cost of ESA vouchers to the state, and ultimately, taxpayers, also received renewed attention this week, after Hobbs’ office released a funding analysis sounding the alarm over skyrocketing costs. In June, the department of education estimated the program is likely to grow to 100,000 students in the next year and cost $900 million — hundreds of millions of dollars more than the $500 million allocated to the program in this year’s state budget.

An early legislative analysis of the voucher program’s impact, released while the expansion was being considered, estimated that it would cost just $65 million in fiscal year 2024.

Hobbs’ new analysis outpaces even the education department’s whopping estimate, pinning the cost to Arizonans at more than $943 million and warning that the current funding level is set to fall short by more than $300 million in the upcoming year. The report notes that the rapidly increasing price tag of the voucher program means that more than 53% of new K-12 education spending in fiscal year 2024 will benefit ESA recipients, who represent just 8% of all Arizona students.

GOP leadership, however, remains skeptical of both financial reports and is working on its own in-depth review of the program.

Arizona Mirror is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Arizona Mirror maintains editorial independence. Contact Editor Jim Small for questions: info@azmirror.com. Follow Arizona Mirror on Facebook and Twitter.

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