Blog: The Educated Reporter

New Flavor of School Choice Policy Gains Ground in States

The trophy case at the highly regarded Bishop Gorman High School in Las Vegas. A new Nevada law will allow parents to access state funds to pay for educational expenses, including tuition at private or parochial schools. (Flickr/David Syzdek)

The sweeping new school choice law in Nevada — or more precisely, educational choice law — has attracted significant national media coverage and analysis. Nevada public school families can apply to spend more than $5,000 in state aid per child on private school tuition or other educational expenses each year, including tutoring, online courses, textbooks, and even home-schooling.

Although the GOP measure appears to be unprecedented in scope, it builds on a small but growing trend of states creating publicly funded “education savings accounts” for families. ESAs are akin in some respects to vouchers, but broader in their use. (See the recent Educated Reporter blog post, “Ten Questions to Ask on Nevada’s New School Choice Law.”)

Both Tennessee and Mississippi also passed new ESA laws this spring, though those programs are intended only for students with disabilities. In all three states, Republicans control the legislature and the governor’s mansion.

Nationwide, five states now have education savings accounts, including Florida and Arizona, which in 2011 was the first state to adopt such a program.

What sets Nevada’s program apart is its potential scope. Other ESA initiatives, as well as voucher programs, typically target a specific population, such as students with disabilities or those from low-income families. (Arizona’s was initially focused solely on students with disabilities, but now allows some other categories of students.)

In Nevada, any family with a child in public school (for at least 100 days) can opt to leave that school and instead spend state aid on private school tuition or other educational expenses. The amount is $5,700 annually for children with disabilities and those from low-income families, equivalent to the state’s general per pupil allotment for public schools. For other families, it’s $5,100.

Nevada Takes Spotlight

Not surprisingly, the Silver State law has sparked strong reactions pro and con, from those who see it as a “huge victory” for school choice to others who fear it will undermine public education and exacerbate academic gaps between rich and poor. The Thomas B. Fordham Institute, a conservative-leaning think tank in Washington, recently hosted a “wonkathon” on the topic. (Most of the blog posts are generally supportive of the idea, though they do raise a lot of questions about how to effectively implement it.)

At the Education Writers Association’s National Seminar in Chicago earlier this spring, analysts took a close look at ESAs and tax-credit scholarship programs, another flavor of school choice policy that is becoming more widespread. In fact, Nevada Gov. Brian Sandoval this spring also signed legislation authorizing $10.5 million for a tax-credit voucher program.

Key issues discussed during the April 21 EWA panel included the growth of ESA and tax-credit programs and what’s driving the expansion, what level of accountability is necessary, the extent to which these programs are creating a segment of voucher-dependent schools, and the impact on state budgets.

With tax-credit programs, individuals or corporations can receive a full or partial tax credit for contributions to a nonprofit scholarship granting organization. That nonprofit then distributes scholarships to pay for private school tuition. Typically, to qualify, a student must meet certain criteria, such as coming from a low-income family, attending a low-performing school, or having special needs.

(For a closer look at the distinctions between traditional voucher programs, tax-credit scholarships and education savings accounts, check out this analysis by Education Week’s Arianna Prothero over at the Charters and Choice blog. Also, in February she wrote a larger piece about education savings accounts.)

Following the Money

On the issue of accountability, EWA panelist David Figlio of Northwestern University said an open marketplace with lots of choices on its own isn’t sufficient to ensure quality options. Good information is key, a point echoed by others.

“It’s very easy for us to talk about the power of the market, but the grease that lubricates the free market is full information. That’s the very first necessary condition,” he said.

Figlio, who has studied Florida’s tax-credit scholarship program, noted that some of the state’s “very best” private schools participate in the program. But Figlio also said that “it’s unquestionable that some of the very worst schools in the state of Florida are also there, and they’re managing to get students to come. … So, they’re passing a market test in that regard, but it might not be the right market test.”

Moderator Lauren Roth, who recently wrote a story about the Florida tax-credit program for the Orlando Sentinel (but has since left the newspaper) suggested the Florida program is lacking sufficient accountability.

“In Florida, even if you’re one of these very worst schools, you don’t have to close, you don’t have to leave the program. There is very little accountability,” she said.

Florida private schools participating in the tax-credit program must give students a standardized test, but they have the freedom to use different tests than the public schools, making it difficult to compare their performance to public schools, Roth noted.

Nevada’s education savings account law has a similar testing requirement. All participating schools must take a nationally norm-referenced test each year in math and English and report the results to the state department of education, according to a detailed analysis by the Friedman Foundation for Educational Choice. The state agency will aggregate the data based on grade level, gender, race, and family income. Also, after three years the state will report ESA student graduation rates.

National Perspective

Robert Enlow, the president and CEO of the Friedman Foundation, offered an overview of private-school choice programs in the nation during the EWA panel in Chicago. (Here are Enlow’s slides.) He counted 55 programs in 26 states plus the District of Columbia, as of April, including traditional vouchers, tax credits, and ESAs. About half of those are ESA or tax-credit programs, he said.

Enlow noted that student participation varies widely across programs, depending on their design, as do the value of the vouchers. He is seeing growth in participation among programs, but said “they’re not growing systemically.” In Florida, about 60,000 students receive the tax-credit scholarships, he said, “so only one or two percent” of the student population.

Across the nation, total participation in private school choice programs remains very small compared with the roughly 50 million students in public elementary and secondary schools. Enrollment was about 314,000 in 2014, based on a recent Friedman Foundation fact sheet that includes traditional voucher programs, education savings accounts, and tax-credit scholarships, with ESAs representing just a tiny sliver.

One slide Enlow presented on tax-credit programs showed the value of the vouchers also was all over the map, but averaged out at about $2,600 per participant.

One reason for the growth in ESA and tax-credit policies, experts say, is that they have a better chance of withstanding legal challenges than traditional voucher programs.

Moderator Lauren Roth said that in her recent investigative piece on the Florida tax-credit program, she found that some private schools were dependent on the scholarship money, sometimes having up to 90 percent of their students receiving it. That raised a question among panelists about how such programs might actually alter the private schools sector. Overall, Roth encouraged reporters to examine what types of schools are getting the voucher dollars, with a special eye on the quality of those offerings.

“You get a mix [in Florida],” she said. “Some crummy, broken-down schools warehousing kids, and some incredible programs,” citing as one example a school explicitly for students with autism.

Another issue tackled during the EWA panel was the financial implications for states of adopting these new choice policies.

In Florida, Figlio believes there may currently be a moderate savings to the state, but he expects that to change as the state raises the income threshold for participating families. He suggests the state may hit a breaking point at which the program further drains state coffers.

It’s worth noting here that the new Nevada law only requires a participating family to have enrolled their child in a public school for the 100 days prior. So, it’s conceivable that a family might plan to temporarily enroll in a public school with the goal of getting a free private school education.

Worth the Price?

Kevin Welner, a professor and director of the National Education Policy Center at the University of Colorado Boulder, suggested during the EWA panel that reporters seek ranges or specifics on the conditions that might allow a state to save money, and the breaking point at which it would no longer save the state dollars.

Welner said that in order to calculate whether a program saves the state money, it requires knowing the average amount of the vouchers given out, how many students were initially going to go to private school anyway and then got a scholarship, and how many were enticed to move from public to private school because of the scholarship. (Welner’s slides for EWA are here.)

“The truth is no one really knows,” Welner said. “Partly because of the transparency and accountability in reporting elements are very weak and partly because it involves real speculation. When Bobby is enrolled in private school receiving his ‘neovoucher,’ how do we know what Bobby would have done without that neovoucher?”

Neovouchers is a term Welner has used to describe vouchers that come from tax mechanisms. He describes the fiscal implications in greater detail in this policy memo. For another look at the same issue, check out this report by Josh Cunningham of the National Conference of State Legislatures, who spoke at EWA’s Charters and Choice seminar in Denver earlier this year.