It's October. Three families haven't paid their co-pay. But you only figured that out because you went looking.
The ESA portion for all three arrived on time. ClassWallet disbursed cleanly, no issues. But there's a co-pay on top of the ESA award for each of these families, and nothing came in for it. When you pull out the enrollment agreement to figure out what to say to them, you realize the problem isn't the families. The problem is the document.
The total tuition is listed. The ESA program is mentioned. But the co-pay amount isn't a specific number. There's no due date. There's no clause explaining what happens if the co-pay doesn't arrive. Your records show all tuition payments in one bucket, so you can't quickly see which families are short and by how much. The ESA portion and the co-pay were never tracked as separate things.
This is a structural gap, not a character flaw in the families. And it's a common one. According to the 74 Million's 2026 microschool survey, about 18% of microschool students use ESA funds for only a portion of tuition. That's not a rare edge case. It's a common enrollment pattern that most billing setups weren't designed around. This post is about closing that structural gap before August, not discovering it in October.
Why the enrollment agreement is where this breaks down¶
Most microschool billing systems developed in one of two directions: either the school serves primarily private-pay families and processes tuition like a small private school, or it enrolled primarily ESA-funded students and built around ClassWallet disbursements or state reimbursement cycles.
The hybrid situation, where a family's ESA award covers part of tuition and they owe the school a co-pay for the rest, sits between those two setups. It often gets handled informally, with a line in the enrollment agreement referencing the ESA program and an expectation that families know what they owe. That works until it doesn't.
The root of the problem is that when an enrollment agreement defines a single "tuition" figure with no distinction between the ESA-covered portion and the family-owed portion, the co-pay has no contractual definition. There's no stated dollar amount, no due date, no payment method, and no stated consequence if it doesn't arrive. The school has no written basis for following up.
Consider the specific scenario: a family's ESA award is $7,200 and the school's tuition is $9,000. The enrollment agreement says "$9,000 per year." It doesn't say the family owes $1,800, when it's due, or how they should pay it. The ESA invoice goes to ClassWallet for $7,200. The $1,800 is a verbal understanding.
This creates two problems. First, if an ESA program auditor reviews the account, a single-line invoice for $9,000 doesn't match the ESA payment of $7,200 without some explanation of the split. Second, the school has no written obligation to point to when the co-pay is overdue. You're left negotiating from goodwill in October.
In a school of 40 students, 18% means roughly 7 families in this situation. That's enough to affect cash flow, and enough to create real administrative work if the structure isn't clear from the start.
The enrollment agreement clause: separating the two obligations¶
The fix happens in the enrollment agreement, before the school year begins. When both payment streams are defined clearly in the agreement, each one has a standing obligation behind it.
A well-drafted clause includes six elements: the total annual tuition as an explicit figure, the ESA-covered portion identified separately and tied to a specific program, the family co-pay defined as a fixed dollar amount (not "the remainder," which floats if the ESA award changes mid-year), the co-pay payment schedule and method, a provision for delayed or reduced ESA disbursement, and a provision for full ESA contract lapse.
The co-pay obligation should not be conditional on the ESA disbursement arriving. The two obligations are parallel, not sequential.
Here is sample language that covers those elements:
ESA Partial Tuition and Family Co-Pay
Total annual tuition for the 2026-2027 enrollment period is $[TOTAL AMOUNT].
ESA-covered portion: Up to $[ESA AMOUNT] is expected to be paid directly to the school by [Program Name, e.g., Arizona Department of Education Empowerment Scholarship Account / Step Up for Students Personalized Education Program] via [Portal, e.g., ClassWallet / Step Up portal]. Receipt of this amount is subject to the student's active ESA contract and program disbursement schedules.
Family co-pay: The family is responsible for $[CO-PAY AMOUNT] per [month/quarter/year], due on the [date] of each [month/quarter], payable directly to [School Name] by [accepted payment method].
The family co-pay obligation is independent of ESA disbursement timing. A delay, reduction, or suspension of ESA disbursement does not modify or defer the family's co-pay obligation.
If the student's ESA contract lapses, is revoked, or is not renewed, the family becomes responsible for the full outstanding tuition balance, including the previously ESA-covered portion, subject to [30/60] days written notice from the school.
Label this as a starting point. Have a local attorney adapt the language to your state's contract requirements. The structure matters most. Phrasing can be refined.
Why defining the co-pay as a fixed dollar amount matters: if the ESA award is reduced mid-year due to a processing adjustment, the family's co-pay stays constant. You're not automatically absorbing the difference. If a significant mid-year change genuinely needs to be renegotiated, handle it through a written addendum. Don't let it be absorbed informally without documentation.
The two-invoice workflow: keeping the paper trails separate¶
The invoice structure follows directly from the enrollment agreement structure. One invoice goes to the ESA program. A separate invoice goes to the family. They should never be combined on a single document sent to the program.
Here is the practical difference between the two:
| ESA Program Invoice | Family Co-Pay Invoice | |
|---|---|---|
| Addressed to | Program portal (ClassWallet, Step Up) | Family name |
| Amount | ESA-covered portion only ($7,200) | Co-pay only ($1,800) |
| Reference | Student ESA ID / award number | Enrollment agreement date and section |
| Line item label | Tuition services, ESA-covered portion | Tuition co-pay, per Section [X] of enrollment agreement |
| Payment method | Program portal / direct deposit | ACH, check, or school billing system |
| Submitted to | ESA portal | Family email only |
The dual-billing risk lives in one specific mistake: submitting an invoice to the ESA portal for the full tuition when the ESA covers only part of it. The program sees a $9,000 invoice for a student whose award is $7,200. That looks like overbilling and triggers a review. Keeping the ESA invoice strictly limited to the ESA-covered amount removes that risk entirely. The family invoice, covering the co-pay, is a document between the school and the family. It never gets submitted to the ESA program.
The line item label on the family invoice matters. "Tuition co-pay, per Section 3 of enrollment agreement" points back to the defined split. It makes clear this is a separately defined family obligation, not a new or additional charge. For more on what makes an ESA invoice compliant at the line-item level, the ESA reimbursement and rejected expenses guide covers that in detail.
Following up on unpaid co-pays¶
The follow-up sequence should reference the enrollment agreement, not the ESA disbursement. "Your co-pay of $1,800 was due on [date] per Section 3 of your enrollment agreement" is cleaner than "we received your ESA payment but the balance is still owed." The second framing blurs the two payment streams, can confuse families about what they actually owe, and in some program interpretations creates the appearance that the school is tracking ESA payments as receivables.
A straightforward follow-up cadence:
- Send the co-pay invoice on the date defined in the enrollment agreement, not after the ESA disbursement arrives. The family's obligation starts at enrollment, not at program payment.
- On day 10 overdue: a reminder that cites the enrollment agreement clause by section and the original due date.
- On day 20 overdue: ask if the family needs a payment plan for the co-pay. Offer to document it in a written addendum.
- On day 30 overdue: a direct conversation about whether continued enrollment is possible, referencing the enrollment agreement's consequence clause.
The ESA relationship does not factor into co-pay follow-up. The co-pay is a family obligation, defined in the enrollment agreement, owed to the school. Following up on it is not threatening the ESA relationship; it's enforcing a separate contract.
Arizona and Florida: one practical note each¶
Arizona¶
Arizona's Empowerment Scholarship Account (AzEIP) pays roughly $7,000 to $8,000 per student annually. The exact figure depends on the per-pupil funding of the district the student would otherwise attend, so it varies by district. Microschool tuition in metro Phoenix and Scottsdale commonly runs $10,000 to $14,000. The co-pay gap is real and common for families in those markets.
Arizona does not restrict families from paying the tuition difference directly to the school. The co-pay is a private arrangement between the family and the school. The ESA program has no standing to regulate the amount or existence of a family co-pay.
One important restriction worth naming explicitly in enrollment conversations: a single student cannot simultaneously hold an Arizona ESA contract and receive an Arizona School Tuition Organization (STO) tax credit scholarship in the same enrollment period. These are separate school choice programs. A student cannot use both at once. If a family mentions STO funds as part of how they plan to cover the co-pay, that conversation needs to happen before enrollment agreements are signed. The restriction is on concurrent dual program participation, not on families paying the co-pay out of pocket. A family paying $2,000 out of pocket on top of a $7,000 ESA award is not in violation of anything.
Verify current ARS language before publication. Program rules do change.
Florida¶
Florida's Personalized Education Program (PEP), operated by Step Up for Students, commonly runs on a reimbursement model for microschool providers rather than Direct Pay. In practice, many families pay the school up front and submit receipts to Step Up for reimbursement. Reimbursement cycles often run 30 to 60 days.
If a family carries both a PEP reimbursement timeline and a co-pay obligation, they may be net-negative cash for a month or two while waiting for the reimbursement to arrive. The enrollment agreement doesn't need to solve this, but naming it during onboarding helps. Families who understand the reimbursement sequence are less likely to fall behind on the co-pay while waiting for PEP funds.
For the billing workflow, this matters specifically: the co-pay invoice should go out at enrollment, not after the PEP reimbursement posts. If you wait for the ESA disbursement to arrive before invoicing the co-pay, you're creating a timing gap that doesn't need to exist. The two payment obligations start at the same moment: enrollment.
Florida does not restrict or cap direct family co-pays alongside PEP participation. Families can pay whatever the school charges above the scholarship-covered amount, and Florida does not regulate that arrangement.
For a broader overview of state ESA program rules, the state-by-state ESA guide covers program structures and eligibility in more detail.
A simple co-pay tracking setup¶
The enrollment agreement and invoicing structure work at the front end. They break down at the back end if both payment streams land in the same record category.
If ESA disbursements and family co-pays both post to "tuition received," you're back to October. You can see that money came in. You can't quickly tell which families are short on the co-pay, because the two streams were never separated.
The fix is straightforward: name the categories explicitly in your records from day one of the school year.
Co-pay tracking checklist
- [ ] Enrollment agreement has a separate clause naming the co-pay amount, due date, and payment method
- [ ] Co-pay is tracked as a separate receivable from the ESA invoice (not as a credit against a single tuition line)
- [ ] Each family with a partial ESA award has two payment records: one for the ESA portion (paid by the program), one for the co-pay (paid by the family)
- [ ] Co-pay invoices go out on the date specified in the enrollment agreement, not after ESA disbursement arrives
- [ ] Follow-up references the enrollment agreement section, not the ESA disbursement schedule
- [ ] Co-pay aging reviewed at the end of each quarter, not at year-end
- [ ] At the start of each academic year: confirm the ESA award amount for the new year and update the co-pay in the enrollment agreement before signing
- [ ] If the ESA award changes mid-year: document the revised co-pay in a written addendum signed by both parties
NavEd tracks both payment streams natively, so a co-pay aging report shows you exactly which families are behind on the family-direct portion without sorting through the full tuition ledger.
Before next enrollment opens¶
Pull out your current enrollment agreement and look for three things: Is the co-pay defined as a specific dollar amount with a due date and a payment method? Is there a clause for what happens if the ESA award is delayed or lapses? And are the two payment streams tracked in separate categories in your records?
If any of those are missing, that's the fix for this fall. A clause, a split invoice, and a separate record category. None of it requires new software or a bookkeeper. It requires deciding in August what the agreement will say, and building the invoice structure to match.
If you're ready to set up the billing and tracking side, NavEd handles both payment streams natively, including the co-pay aging reports that separate family-direct balances from ESA disbursements. Take a look at how it works.
Common questions¶
Can I charge families the full tuition and let them submit the ESA portion for reimbursement themselves?¶
Yes, and Florida PEP is the clearest example where this is operationally common. When the family submits for reimbursement directly, you're dealing with one invoice to one party: the family. That simplifies your invoicing considerably.
The enrollment agreement still needs to define the family's full obligation clearly in this model. You need a document that establishes what the family owes and when it's due, even if they recover part of it through the ESA program on their own timeline. The definition of what the family owes doesn't change. How they fund it on their end is their business.
What if the ESA award amount changes mid-year?¶
This is exactly why the co-pay clause should define a fixed dollar amount rather than "whatever ESA doesn't cover." If the disbursement changes due to a mid-year adjustment or a processing hold, the family's co-pay obligation in the signed enrollment agreement stays constant. You're not required to absorb a reduced ESA award.
If a significant change genuinely needs to be renegotiated, handle it through a written addendum with both parties signing. Don't let it be absorbed informally without documentation.
Is there a cap on how much a family can pay out of pocket alongside an ESA award in Arizona or Florida?¶
Neither state caps the family co-pay. The restriction in Arizona is specific: a single student cannot simultaneously hold an ESA contract and receive an STO scholarship in the same enrollment period. That's a restriction on dual program participation, not on direct family-to-school payments above the ESA amount. A family paying $3,000 out of pocket on top of a $7,000 ESA award is not in violation of anything. Florida has no co-pay restriction at all alongside PEP participation.