This post was written by NCPA Research Associate John White.
The Educational Freedom Accounts Act (EFAA), introduced by Ted Cruz (R-TX) in the Senate and Mark Meadows (R-NC) in the House, would give parents in the District of Columbia the opportunity to take advantage of an education savings account (ESA). Similar to a program recently implemented in Nevada, EFAA would allow parents to receive a deposit into a specialized account to pay for their child’s education. This amount is based on income level and ranges from 80-90 percent of the expected cost to educate the child in the district’s schools. The money can be spent on private or alternative schooling options, and savings can be carried over from year to year.
This program would be highly beneficial to D.C.’s students, where the public school system has been consistently ranked below average and is saddled with overcrowding concerns. EFAA would further serve to increase access and affordability for students and families to private or alternative education. The bill also includes safeguards to prevent the government from influencing participating schools’ missions and admissions criteria, a common concern with school choice policies.
ESAs have a variety of benefits to students, educators, and the public school system. As far as the student and their family is concerned, ESAs provide the opportunity to select a school that best fits their educational needs. In other words, parents who have contributed into the tax pool for the public education system will not be “charged twice” for private school, since most of the money will be returned to them to be spent on their child’s education. Furthermore, the ability to roll over funds incentivizes cost savings when selecting a school so that some funds can be saved for high school or college. A problem with vouchers (which do not roll over from year to year) is private schools raising their tuition to the maximum voucher level, causing price inflation. Finally, as the program is implemented and demand increases, more and better private schools will emerge in the market, with the competition between schools driving better efficiency, lower prices, and higher education quality. It is also worth noting that increased parental involvement in choosing a school might lead to increased parental engagement in other aspects of their child’s education, clearly a key driver of learning.
The competition among private schools could also result in teacher salaries increasing, as schools will need to compete to hire the best teachers in order to attract students. These rising salaries may also attract working professionals or retirees from other fields who can share valuable professional knowledge with students. Furthermore, private schooling provides for better evaluation procedures: where more parental choice is involved, teachers will be evaluated based on their ability to satisfy the market’s (the children’s) need for an education, rather than their performance against arbitrary government benchmarks.
Public schools also stand to benefit from ESA programs. Overcrowding problems would be reduced as more parents choose to send their children to private schools, and new infrastructure costs would be borne by the private sector, rather than taxpayers directly. While public schools would suffer a loss of total funding through transfers to ESAs, per-student funding will actually increase for those who remain in public school, as the district receives 10-20 percent of the baseline cost to educate the student. Studies have also projected an increase in property values in neighborhoods that are currently stigmatized by having poor public schools; if private schools are a viable option, parents will weigh less heavily the schools a neighborhood is zoned for when buying a home, potentially increasing tax revenues and diversity in these neighborhoods.
Unfortunately, the current proposal only applies to students who currently attend public school and switch to private school, or students who are starting school for the first time. Families who already send their children to private school (or homeschool their children) would not be covered. One possible remedy for this issue would be to phase in accounts for these students over time on a percentage basis. It is worth noting, however, that after a generation the original proposal would cover everyone, given that no one will begin school without meeting the program’s qualifications.
Due to its potential positive impact on students and their families, educators, and the public school system, EFAA is a good first step towards providing access to a quality education to every student in the D.C. area, an opportunity that current policies have failed to provide them. This legislation has enormous potential to create competition in the D.C. education market, which drives higher efficiency, creates lower costs, and promotes higher quality in education.
John White is a Research Associate with the National Center for Policy Analysis.