Funding students rather than institutions would be a school choice victory

The following article, by Bob Luebke and Corey DeAngelis, appeared in the Washington Examiner on Monday, October 12, 2020. 

North Carolina families need educational options as much right now as ever, if not more. Ever-changing diets of virtual and in-person learning have disrupted the instruction of thousands of students and left many parents concerned about their children’s educational needs.

According to the latest data from Education Week, 60% of public school districts in North Carolina reopened without any in-person instruction at all, and public school remote learning has been a disaster for far too many families.

The problem is that families are essentially powerless when it comes to K-12 education. The public school system is a monopoly that lacks meaningful incentives to cater to the needs of families. The good news is that a solution exists: We could fund students instead of institutions, just like we already do with other taxpayer-funded initiatives, such as Pell Grants, the GI Bill for higher education, and pre-K programs.

While much of the education landscape is not a pretty picture, innovation is happening. Families are pooling resources together to form “pandemic pods” or “micro-schools” where parents help to supervise instruction and also may hire teachers or tutors to facilitate learning.

Private schools have been nimble in responding to a changing environment, but many public schools have not. Students lack access to these new solutions. The difference is clear: One of these sectors gets your money regardless of how well it meets the needs of individual families. The other is hampered by government regulations, making it difficult even for the most well-intentioned school leaders to adapt.
 
We need to change how North Carolina and other states finance schools. One step we can take is to allow families to take their children’s education dollars to wherever they wish to receive an education, whether it be a public school, private school, home school, or micro-school. Funding students directly through a statewide education savings account, or ESA, is the best way to make that happen.

Funding students directly can also improve equity in education. Advantaged families already have school choice because they can afford to live in neighborhoods that are assigned to the best public schools or can readily pay for private school tuition. Funding students directly would empower more families to choose how and where their children are educated. North Carolina already has an ESA program that helps parents of students with special needs pay for their educational expenses. All families should have that kind of opportunity.
A recent Civitas/Reason study evaluated the economic effects of funding students directly through a statewide ESA in North Carolina. The study estimated that a statewide ESA could produce $19 billion in economic benefits from higher lifetime earnings associated with increases in academic achievement, $790 million in economic benefits from additional high school graduates, and $12 million from reductions in social costs associated with crimes.

If the program’s enrollment were to expand by a conservative 1% per year, in 10 years, benefits would grow even more, producing $58 billion in economic benefits from higher lifetime earnings, $2.4 billion in economic benefits from additional high school graduates, and $35 million from reductions in the social costs associated with crime.

Economics, however, aren’t the only reason to seriously consider ESAs. Expanded choice via a statewide ESA can significantly improve outcomes for individuals and their communities. A large body of research suggests that access to educational choice also leads to improvements in safety, satisfaction, and civic outcomes.

Funding students directly through an ESA program could also theoretically help save taxpayer dollars if education funding were based on student enrollment. Because ESA funding would be pegged at 75% of public school spending, a program that enrolls 5% of students and assuming 10% of those families would have paid for private education absent the program, North Carolina taxpayers could save approximately $115 million in one year.

ESA programs are already working in states like North Carolina. For example, parents of special needs students are eligible for funding that helps them pay for educational expenses like tuition, tutoring, or medical therapies. A 2020 survey by EdChoice found over 80% of parents using ESAs were satisfied with their child’s education program. In addition, 73% of ESA parents are more satisfied with their child’s ESA school than their previous school.

By linking funding to the child, parents are empowered to access the best educational option for their child while generating significant economic benefits and boosting positive social and civic outcomes. The needs of students should come before the desire to protect a monopoly.

Corey DeAngelis is the director of school choice at Reason Foundation. Bob Luebke is director of policy at the Civitas Institute in Raleigh, North Carolina.