Study: Education Savings Accounts Would Create Robust School Choice Options

Study: Education Savings Accounts Would Create Robust School Choice Options
February 26, 2011

Establishing education savings accounts in Arizona and elsewhere could make school choice a viable option for more families, a new report by the Goldwater Institute argues.

The report from the Phoenix-based state policy organization makes the case that Arizona’s existing school choice provisions—including a popular but controversial corporate tax credit program—are insufficient to meet the demands of families throughout the Grand Canyon State.

To provide more options to Arizona children, the state should create individual education savings accounts providing 90 percent of current state per-pupil spending, suggest report writers Matthew Ladner, Goldwater’s vice president for research, and Nick Dranias, director of the organization’s Moller Institute for Constitutional Government.

Parents could use money deposited in their ESAs for private school tuition, online education, or even save the money to pay for their child’s college, Ladner and Dranias suggest in  “Education Savings Accounts: Giving Parents Control of their Children’s Education.”

‘Maximum Control to Parents’
Ladner says education savings accounts would maximize school choice options for families.

“A system of choice based upon ESAs gives the maximum possible level of control to parents,” he explained. “Parents can choose between a large array of education programs, including private schools, college courses, tutors, and online programs.

“Parents will have the incentive to choose academically and cost-effective programs, as they will have the ability to save money not spent [and use it] for college expenses,” Ladner added.

Ladner says such a plan would have a good chance of being passed by the state legislature. “An ESA bill was introduced into the Arizona Senate with a majority of Senators as cosponsors. Lawmakers have been developing bills in Arizona, Florida, Montana, and Ohio,” he noted.

Florida Weighs Accounts

Florida Gov. Rick Scott (R) has discussed education savings accounts, and a bill is pending in the state legislature. Jaryn Emhof, press secretary at the Foundation for Excellence in Education, says ESAs would help ensure children are no longer assigned to schools that fail to meet their needs. 

“We believe every child should have access to a quality education that best fits their learning style and needs. A child’s access to a customized, quality education should not be based on their ZIP code or parents’ financial status,” Emhof said.

Florida currently has an array of educational choices, including tax-credit scholarships for low-income families and vouchers for disabled children. Emhof says ESAs would build on the success of those earlier programs and expand choices to all Florida families.

Under the Florida proposal, the parents of every student who opted for an alternative to public school would deposit annual education grants—up to 85 percent of current per-student funding—into a special account.

Emhof says the funds could be used for a variety of educational purposes, not just K-12 tuition. “Under Florida’s ESA model, parents have the ability to invest in their child’s K-20 education, including private school, dual enrollment in college courses, full-time college enrollment after high school, or a combination,” Emhof explained.

Lindsey Burke (Lindsey.Burke@heritage.org) is an education policy analyst at The Heritage Foundation.

Internet Info:
Matthew Ladner, Ph.D., and Nick Dranias: “Education Savings Accounts: Giving Parents Control of their Children’s Education,” Goldwater Institute (January 2011): http://www.heartland.org/schoolreform-news.org/Article/29371/