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Education Savings Accounts Should Be in Oregon’s School Choice Future

School choice is widespread in America, including in Oregon—unless you are poor. Affluent families have choice because they can move to different neighborhoods or communities, send their children to private schools, or supplement schooling with tutors, online courses, and enrichment programs. Lower- and middle-income families, meanwhile, too often are trapped with one option: a school in need of improvement assigned to them based on their zip code.

Some states such as Arizona, Wisconsin, and Florida have made significant progress toward providing more Kindergarten through 12th grade options for many children. Public charter schools (including online charters) and private school attendance made possible by state funded vouchers or tax credits are increasing families’ opportunities to find the right fit for their children. But these options are constantly under attack by those who represent the status quo: those who want the public school system to stay just the way it is, so it continues to provide virtually guaranteed jobs and benefits for certain teachers and administrators―regardless of the results achieved by the children they are supposed to serve.

Nobel Prize winning economist Milton Friedman first popularized the school choice voucher concept in his 1962 book, Capitalism and Freedom. Now, a new concept is capturing the imaginations of a new generation of parents and policy makers: Education Savings Accounts (ESAs). Going beyond the voucher or tax credit idea for school choice, ESAs introduce market concepts that help parents become active shoppers for educational services, thus improving their quality while reducing costs.

As Matthew Ladner, Ph.D. wrote in a major study for the Friedman Foundation for Educational Choice:

Education savings accounts are the way of the future. Under such accounts—managed by parents with state supervision to ensure accountability—parents can use their children’s education funding to choose among public and private schools, online education programs, certified private tutors, community colleges, and even universities. Education savings accounts bring Milton Friedman’s original school voucher idea into the 21st century.

ESAs differ from state-funded vouchers. Typically, parents can redeem vouchers only at state-approved public and private schools. In contrast, ESAs allow parents to choose among public schools, private schools, private tutors, community colleges, online education programs, and universities. In addition, ESAs allow parents to put unused funds into college savings plans, thus changing the “use it or lose it” mentality in the current public school funding system. ESAs promote user-based subsidies (like the food stamp program) rather than supplier-based subsidies that represent the current public school funding model.

Conceived of by the Goldwater Institute of Arizona, Education Savings Accounts were first passed by that state’s legislature in 2011 for special-needs children. Known as Empowerment Scholarship Accounts there, the program was expanded in 2012 to children adopted out of the state foster system, children of active-duty military parents, and children in “D” and “F” failing schools. Children entering Kindergarten were added in 2013 and funding for the accounts was increased. Arizona parents can get all the information they need about these accounts from the state’s Department of Education.

Nationally, school choice is becoming a more bipartisan issue as many Republicans are being joined by leading Democrats, such as former Clinton White House Press Secretary Mike McCurry. McCurry is now chair of the national Children’s Scholarship Fund, which provides privately funded tuition scholarships to low-income elementary school kids. He describes the school choice movement as a rare example of centrism in our increasingly polarized American politics.

And, U.S. Senator Cory Booker of New Jersey (D) has long been a school choice advocate. Speaking in 2001 for Cascade Policy Institute, Booker told Black students at Portland’s Self-Enhancement, Inc. how important school choice is for his fellow African Americans.

It is time for Oregon to move further toward school choice for every child, and ESAs offer an attractive way to start the journey. Already, our state has over 120 public charter schools made possible by passage of a 1999 bill in a Republican-controlled legislature that was signed into law by a Democratic governor (John Kitzhaber).

In the 2015 state legislative session, Oregonians will have an opportunity to start down the ESA road with passage of House Bill 2770, the Education Equity Emergency Act (E3). It will create Empowerment Scholarship Accounts modeled after the highly successful Arizona program. These scholarships will help level the educational playing field for kids with special educational needs, in foster care, or in low-income families. Scholarship recipients can use ninety percent of their state education funding for approved educational expenses like private schools, tutoring, education therapy, textbooks, online education programs, community colleges, universities, or college savings plans.

One sponsor of the 2014 version of the bill, SB 1576, noted, “These students have had unique challenges in their lives and require enhanced educational flexibility to ensure successful degree attainment.”*

The Act is designed to impose no financial burden on the state or on the school districts that scholarship students currently attend. Scholarship participation will be capped at 0.5% of students in a school district unless a district chooses to allow additional participation.

Oregon has a history of bold experimentation in other policy areas. Now is the time to experiment with expanding the role of parents choosing―and the market delivering―better education for Oregon’s children. Education Savings Accounts will empower families to find better educational options, leave the “use it or lose it” funding mechanism behind, and save toward their children’s higher education. Altogether, ESAs will provide winning solutions for children, their parents, and Oregon’s future.

* From a letter by State Senator Tim Knopp to then Chair of the Senate Education and Workforce Development Committee Mark Hass requesting a hearing on SB 1576 during the January 2014 interim legislative hearing days. The hearing took place on January 16, 2014. Archived video is here.

(January 25-31, 2015 is National School Choice Week, an annual public awareness effort in support of effective education options for all children. An earlier version of this Commentary was published in January 2014.)

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