The new Federal Scholarship Tax Credit and the explosive growth of educational choice have raised big questions about how to provide parents with flexibility while minimizing concerns about waste and fraud. Jamie Rosenberg has a lot of thoughts on the subject. Rosenberg is the founder of ClassWallet, a financial technology platform that helps government agencies distribute public funds directly to parents and teachers. Before ClassWallet, Rosenberg founded AdoptAClassroom.org, one of the country’s largest education philanthropy platforms. A lawyer by training, Rosenberg has been featured in Time, Parade, and on CBS. I reached out to talk dollars, cents, and choice. Here’s what Rosenberg had to say.
—Rick
Rick: Jamie, so what is ClassWallet?
Jamie: ClassWallet is a digital platform that enables public agencies to distribute money directly to end users, create rules to track and govern how those funds are spent, and ultimately get better program outcomes, all without any paperwork. Typical use cases include distributing funds to parents from a state education savings account or a tax-credit scholarship, supporting individuals using a vocational rehabilitation or career-workforce stipend, and enabling teachers to use a classroom-supplies stipend. It’s about using powerful digital tools that originated in the fintech space to bypass administrative gridlock and empower stakeholders like parents and educators who are closest to the needs of students. Currently, ClassWallet is used in 37 states and has helped distribute more than $6 billion in government funds to support K-12, early childcare, and workforce initiatives. Our customers are students, individual learners, educators, and schools. Our clients are government agencies, school districts, and schools. We are most proud of the fact that over 8 million students have benefited from our innovation.
Rick: Where’d the idea for ClassWallet come from?
Jamie: Back in 1998, when I was still practicing law, I began to get involved in supporting my local school district in Miami. During this time, I learned that a local foundation had been trying to donate $15,000 to the district but was unable to do so because the district simply couldn’t figure out how to cut through the red tape in order to accept the funds. That opened my eyes to how well-intentioned bureaucratic rules made it almost impossible to donate directly to classroom teachers. I became so obsessed with the challenge that I wound up quitting my law job and building a crowdfunding platform called AdoptAClassroom.org. Today, that nonprofit still exists and actually supports teachers and students in 30% of U.S. public schools. During my AdoptAClassroom.org years, I got to know a lot of state and local education leaders and began to understand that while many of them wanted to unbundle funding and put resources directly into the hands of teachers, they struggled to do so in a secure, rules-based fashion without paper-heavy, manual reimbursement systems that were inefficient and lacked transparency. In 2014, I turned AdoptAClassroom.org over to new leadership with the goal of creating ClassWallet. I wanted to help ensure the compliant distribution of funding within the school system, while alleviating the sort of friction that was undermining the goals of state and local education leaders at a much larger scale. This was, of course, long before Education Savings Accounts (ESAs) really gained in popularity and adoption. So, when states began to experiment with more parent-directed approaches to funding education, we were very well-positioned to support their efforts.
Rick: So, how does ClassWallet actually work?
Jamie: When a client—like a state agency or scholarship-granting organization—sets up a program on ClassWallet, they define the rules upfront: approved categories, spending limits, and eligibility criteria. Those rules are encoded directly into the digital wallet platform. That ensures that only approved vendors and service providers are permitted to participate. Those vendors then curate their catalogs of items to comply with program guidelines, and end users can access a curated marketplace of approved vendors. This rule-based architecture is reinforced by a combination of automated compliance controls and human review to evaluate transactions and confirm they meet program requirements. Transactions, reimbursements, and service provider payments all process securely within the platform, with no paperwork.
Rick: What are the advantages of this approach?
Jamie: The primary benefit is that we replace the bureaucracy often associated with the education system with user-friendly technology. In the old model, a parent or educator had to submit mountains of paperwork and wait days, weeks, or even months for an audit determination, which is a huge burden for all parties involved. With our approach, the funds actually sit in a digital account, allowing for immediate access and, most importantly, maximum agency. What we’ve created is not dissimilar from the way an FSA card works at CVS or the technology that many of us use to process expenses on the fly at work. Every major retailer serving the education market, from Amazon to Scholastic to Lakeshore to Best Buy, and tens of thousands more, accepts ClassWallet as a form of payment. From a policy standpoint, our platform gives agencies 100% transparency and automated compliance because spending rules are directly built into the user experience. As a result, ClassWallet eliminates the need for manual receipt collection and labor-intensive audits, making parents’ lives easier. This shifts the focus from paperwork to empowerment and better student outcomes, while significantly reducing the administrative cost of running large-scale public programs.
Rick: What are some of the challenges you can help address that might not be immediately obvious to observers?
Jamie: A big one is the inherent tension between strict government compliance and the need for user accessibility and flexibility. That tension can result in a patchwork of state and local rules that is challenging for parents to navigate. With clear-cut rules and policies, the technology can do a really effective job of empowering parents and mitigating waste, fraud, and abuse. But the public sector is only beginning to understand and craft policy around that potential. Balancing the need for accountability with a seamless, intuitive experience for beneficiaries is an ongoing challenge that requires continuous technological innovation and advocacy.
Rick: There’s been explosive growth in state school programs, while more than two dozen states have opted into the new Federal Scholarship Tax Credit. What have you learned that can help inform these programs?
Jamie: One vital lesson is that if a program isn’t “parent-friendly,” it won’t be successful regardless of how much money is allocated. These programs have to be built from the ground up with the parent experience in mind, to ensure the application and spending processes are as intuitive as the consumer apps that we use every day. In addition, we’ve seen that these programs can’t just be about tuition; they are most effective when they enable parents to customize learning experiences and access supplemental services like tutoring or specialized therapy.
Rick: Any lessons that inform efforts to minimize the potential for waste, fraud, or abuse?
Jamie: The key is to move from a “reactive” audit to a “proactive” control environment. Traditional systems like purchasing cards and reimbursement are highly vulnerable to the misuse of funds or intentional fraud because you only see the purchase after the money is gone. Our “digital wallet” approach, in contrast, establishes spending guidelines before any transaction occurs. In short, parents can shop with confidence knowing that what they are buying is an allowable purchase. By routing spending through a platform of vetted vendors with the program rules preloaded and fully integrated, we give parents a seamless experience and help ensure the funds are only used for approved educational purposes. We also provide an automated digital footprint for every penny, which provides transparency for all stakeholders.
Rick: What’s one piece of advice for leaders seeking to empower parents while minimizing concerns about misspent funds?
Jamie: In the public sector, we often get stuck in a “gatekeeper” mindset, where compliance creates barriers. This mentality is often well-intentioned and predicated on concerns about waste, rationing, or protecting the interests of taxpayers. All valid concerns. But in many ways, this is the inverse of how the private sector thinks about the user experience. End users know the difference, and it hurts adoption of public-sector programs. To maximize program outcomes, leaders must shift their perspective toward using technology to clear compliance barriers and create a path to maximize the impact of funding. When you focus on empowering the end user, you naturally build systems that are intuitive and user-friendly, rather than bogged down by traditional bureaucracy. By providing users with the right tools, like a digital wallet with preloaded rules, you empower them to make decisions with maximum choice and full confidence while automatically capturing the transparency the agencies need. Removing the friction of red tape allows every dollar to reach the beneficiary as intended, maximizing the opportunity for the best student outcomes.
This conversation has been edited for length and clarity.
