Arizona families using an ESA have a new payment option designed to eliminate upfront costs and simplify the paperwork required for educational purchases.
Pathfinder, a financial technology company focused on Arizona’s ESA program, has launched a charge card and mobile app that allows participating families to pay for eligible educational expenses without first using their own money. The Pathfinder Education Visa charge card is issued by Column, N.A., an FDIC-insured national bank, under a license from Visa.
Under the traditional reimbursement process, parents may pay for an item themselves, collect supporting documents and submit a claim through ClassWallet, the state’s ESA financial management platform.
Depending on the purchase, families may also need to provide a curriculum, attestation form or vendor credentials.
“ESA represents tremendous progress for educational choice, but using it comes at a high cost of time and energy," Harmony Lerley, an ESA parent. "The current ESA tools leave questions and confusion – what is approved, are there price limits on items, what policies aren't covered in the handbook."
Pathfinder co-founder and CEO Amaan Ahmad said that process can create uncertainty for families, particularly when they are unsure whether an item qualifies under ESA rules.
"Some parents just share on Facebook groups or ask their friends, ‘Is this going to be OK for me to purchase on ESA?'" Ahmad said. "Or they just kind of guesstimate based off what they understand from the rules."
The Pathfinder app allows parents to photograph an item, scan its barcode, paste a link or search for it before making a purchase. The company’s preapproval tool determines whether the item appears to qualify under Arizona’s ESA guidelines.
"When they make the purchase, we give them a card and we preload the card with funds," Ahmad said. "This way, they don’t have to pay out of pocket."
Pathfinder is not replacing the state reimbursement system or receiving ESA funds directly from the Arizona Department of Education. Instead, the company advances money through the card. After a family submits its documentation and receives reimbursement through ClassWallet, the reimbursement is used to pay the card balance.
"If, for whatever reason, ADE is delayed with processing reimbursement, we wait with the parent," Ahmad said. "There’s no interest or fees associated with that if the parent is just waiting on the state."
Prepares the required documents for ESA approval
Parents must still submit their purchases for state review. Pathfinder helps prepare the required documents, including curricula for supplemental educational materials.
Ahmad said the company developed an artificial intelligence tool specifically for creating those curricula, with input from experienced ESA parents. The resulting document can be edited to reflect the student’s age, ability and educational needs.
"It’s not just like ChatGPT spewing out something random," he said. "It’s actually something that a parent would use for a kid of that age, and then also we make it really easy for the reviewer at ADE to be able to see this curriculum."
Pathfinder also offers what the company calls a "no clawback guarantee." Ahmad said if Pathfinder approves a purchase and the state later determines it was not allowable, the company will cover the amount rather than requiring the family to repay it.
"If we said that it was allowed with the preapproval tool and for whatever reason we were wrong, we would cover any kind of clawback that could ever happen," he said.
The guarantee applies to purchases Pathfinder has approved, rather than every transaction made by a cardholder.
No fees
The card and app are free for parents. Ahmad said Pathfinder earns revenue through interchange fees, the transaction fees card issuers receive when customers use their cards.
Arizona families with an active ESA contract may apply, although approval and spending limits are based partly on the family’s ESA award and a soft credit check. Ahmad said the check does not affect the applicant’s credit score. The company is also working to establish credit reporting so responsible use could eventually help parents build credit.
To operate the program, Pathfinder collects information including the student’s name, ESA identification number, award amount and, when applicable, special-needs eligibility. Ahmad said the information is used to establish card limits, evaluate eligible expenses and prepare required documents.
"Data is never sold," he said, adding the company uses U.S.-based servers and undergoes security audits and penetration testing.
Pathfinder is currently limited to Arizona, although a growing number of states have introduced ESA or similar education-choice programs.
Ahmad said the company’s immediate focus is working with parents rather than attempting to replace or redesign the state’s payment system.
"We collaborate with the state and we operate within the state’s rules," he said. “But in terms of actually offering this as a solution to the state, that’s not something we’re focused on right now. We’re purely focused on building for the parent.”
The company operates a 24-hour support line staffed by Arizona parents with experience using ESAs. Families may contact the support team even if they do not have a Pathfinder card.
"Anytime that a parent has questions, whether they’re a cardholder or not, about ESA, they can contact our parent support line 24/7,” Ahmad said. "It’s a real ESA parent who uses the product."
"By removing the administrative burden, Pathfinder allows me to focus on what matters most and that is finding what my kids love and building their education around those passions," said Cindy Mendenhall, a Pathfinder user.
Editor’s note: A grant from the Arizona Local News Foundation made this story possible. The foundation awarded 15 newsrooms to pay for solutions-focused education reporters for two years. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.
Meet Stacy Stacy Mantle is joining the team at Independent Newsmedia, Inc. as an Education Solutions journalist, thanks to a grant from the Arizona Community Collaborative. She has a long history in education that ranges from teaching junior high and middle school to developing curriculum and standards-based assessments.
Community: A longtime advocate for animal welfare, Stacy is deeply involved in rescue efforts and volunteers with several nonprofit organizations.
Random Fact: Once upon a time, she shared her home with a pet coyote and two wolf hybrids. The experiences were wild enough to become the subject of her first book!
Education: She holds a BA in English with a minor in Political Science, a Post-baccalaureate in Secondary Education, and an MBA with a emphasis on Marketing.
Hobbies: In her spare time, Stacy writes fast-paced urban fantasy novels, crafts small-batch artisan soap, and is always up for hiking or off-roading through the Arizona wilderness with her husband of 23 years.
By 
Comments
No comments on this item Please log in to comment by clicking here