Education

ESAs: A Blueprint for 21st Century Parental Choice

January 6, 2016

Vicki Alger

Part one in a multi-part series about education savings accounts.

Sixty years ago the late Nobel Prize-winning economist Milton Friedman published a radical idea: just because we fund schools through government doesn’t mean politicians know how to run schools or what education is best for other people’s children.

To improve American education for all students, Friedman argued that parents should decide what schools are best for their children, schools and teachers should be free to innovate, and public funding should follow students to schools of their parents’ choice.¹ “Education spending will be most effective,” Friedman explained, “if it relies on parental choice and private initiative—the building blocks of success throughout our society.”²

Similar to Adam Smith, Thomas Paine, and John Stuart Mill, Friedman advocated a system of publicly funded vouchers because it would free parents to choose the schools they thought were best for their children, and schools would have to compete for students and their associated funding.

Today, parental choice in education not only includes publicly funded voucher scholarship programs but also privately funded tax-credit scholarship programs—as well as personal-use tax credits and deductions to help offset out-of-pocket costs of private schooling and other education expenses. Altogether these programs are helping more than 1.2 million students.³

Education savings accounts (ESAs) are the latest advance in educational choice, fostering an unprecedented level of personalized learning opportunities for students customized by those who know and love them best: their parents.

Unfortunately, Oklahoma failed to enact its own ESA program during the 2015 legislative session, a failure The Oklahoman’s editorial board decried as “one of the major black marks of this year’s legislative session.”⁴ Rather than halting parental choice progress, the state should add to its five-year-old momentum (starting with the Lindsey Nicole Henry Scholarship Program and the Equal Opportunity Education Scholarship Program) by implementing ESAs.

The concept behind ESAs is simple. Parents who do not prefer a public school for their child simply withdraw him or her, and the state deposits most or all of what it would have spent into that child’s ESA. Parents receive a type of dedicated-use debit card to pay for authorized expenses including private school tuition, online courses, testing fees, tutoring, and special education therapies. Any leftover funds remain in the child’s ESA for future education expenses, including college.

ESAs are also fiscally responsible. ESA funds are disbursed quarterly, but only after parents submit expense reports with receipts for verification. Regular audits also help prevent misspending. If parents misuse funds they forfeit their child’s ESA and must repay misused funds or face legal prosecution.

Today ESAs are helping nearly 3,000 Arizona and Florida students, and so far this year ESA programs have been enacted in Mississippi, Tennessee, and Nevada. Operational and recently enacted ESA programs offer important lessons for state policymakers, including:

1. Make ESAs universal
2. Fully fund ESAs
3. Blow the lid off program caps
4. Beware of pilots
5. Let all education providers compete
6. Private administration is best

ESAs empower parents to customize their children’s learning to degrees no one-size-fits-all system could ever match—no matter how lavishly funded. Rather than debating the future of parental choice through ESAs, Oklahoma policymakers should be enacting them.

Read the entire article here.

Vicki Alger (Ph.D., University of Dallas) is a research fellow at the Independent Institute in Oakland, California, with a forthcoming book on the history of the U.S. Department of Education. Alger holds senior fellowships at the Fraser Institute in Vancouver, British Columbia, and the Independent Women’s Forum in Washington, D.C.