The economics of state school choice across the Atlantic
While the UK education debate focuses on grammar schools, education reformers should not lose sight of exciting ideas for expanding school choice by building on the success of the free schools revolution. Across the ocean, states in the US are already innovating with reforms to increase school choice. Here we shall look at the most prominent and promising of such policies.
Among the oldest is Florida’s Tax-Credit Scholarship Scheme, a dollar-for-dollar tax credit for donations to non-profit scholarship organizations that enable low-income families to send their children to the school of their choice. Their largest such organization, Step Up For Students, responsible for almost 99% of tax-credit scholarships in 2015, issued over 92,000 scholarships in 2016, averaging around $5,300 each. While the average Floridian private elementary school costs $6,681 and the average private high school costs $8,926, these schools often give discounts for low-income families. The beneficiaries, as intended, are among the most disadvantaged Floridians, with an average household income of just $24,135, 5% above the poverty line. 53% live in single-parent homes, 30% are black and 38% are Hispanic; it’s no coincidence that Martin Luther King III is among its greatest proponents.
For these people, and for the education in Florida at large, this programme has been a spectacular success. Contrary to early allegations of brain-drain, the evidence is that it is low-performing students at state schools who tend to be enrolled on the scheme, and proceed to see their average grades surge to a level on par with the national average. Research by Figlio and Hart found that not only do beneficiaries perform better, but the competition driven by the programme saw modest but statistically significant improvements in state schools, with those under the greatest competitive pressure making the greatest improvements.
The taxpayer also benefits; the Florida Office of Program Policy Analysis and Government Accountability found in 2008 that the state saved $1.49 for every $1 spent. With around 115,000 beneficiaries receiving almost $559 million, state government is saving almost $273 million this year, while improving education in the state at large and for its poorest in particular; a spectacular success. As the Save Our Scholarships Coalition will attest, it is also a deeply popular success.
While these reforms do great good improving the prospects of poorer children, there are limits to what they can do for rural children, whose options are restricted by geography, and wealthy children, who usually attend good schools already. There are those who would say these represent a limit on the logic of choice; luckily, certain states have confounded that notion in one of two ways.
The first, practiced prominently in Utah, among others, is Course Choice. This is an umbrella term for policies in which the state allows students to use its funds to access courses not available at their schools, from a variety of alternative providers. These providers can be Charter Schools, other districts, or a variety of off-campus providers. This means if a student wants to take a language not being offered, if they desire to study calculus but attend one of around half of American schools that don’t provide it, if they want to take any number of more esoteric subjects that they are passionate about, they can.
Course Choice has led to state schools innovating in response to the programmes, like Canyons School District in Utah, which went from having no students enrolled in online courses in 2011 to teaching 1,900 students via online courses in 2015. It’s also worth noting that it can save states and schools money; a credit hour with an online course costs on average $216 less than a face-to-face course. By making schools innovate, creating educators more accountable to parents and students, and empowering students to access specialist providers, Course Choice is an extremely promising policy.
Nevada, meanwhile, has gone a step further and established Education Savings Accounts. In essence, the state contributes to an individual student’s account and empowers families to purchase educational services as they see fit. This allows parents to opt out of state schools in different degrees, giving their children a customized education through tutors, private schools, online courses, textbooks and dual enrolment college credit, in which the student is enrolled at multiple schools. Over 4,000 students are already enrolled in ESAs, and thousands more are set to start them. As their benefits will prospectively expand to every child in the state, it is no exaggeration to call them the most inclusive school choice innovation in the USA. It is little wonder that attempts to destroy them by narrow sectional interests have aroused substantial grassroots opposition.
Clearly, then, great leaps are being made in the laboratories of democracy. Reformers on our side of the Atlantic should observe them with interest.
Alexander Fiuza is a University of Southampton graduate and currently works for a European political Party
As with all IEA publications, the views expressed are those of the authors and not those of the Institute (which has no corporate view), its managing trustees, Academic Advisory Council or senior staff