We would like to share information about a new innovative idea in school choice, Education Savings Accounts (ESA).

We are going to begin by shamelessly sharing a “Quick Point” from the Cascade Policy Institute, “Education Savings Accounts Multiply Options for Kids” by Christina Martin.  It’s a great – to the point – introduction.

Kids do better when their parents have the freedom to choose the right kind of educational program for them, without regard to whether the program is public or private. Nine out of ten gold standard social science studies showed that vouchers improve student outcome, and 18 out of 19 showed that they positively impact regular public schools. The remaining studies showed no impact.

But vouchers still limit options. Sometimes home school or a combination of public or private school, tutoring, and home school may be the right fit. Additionally, if set too low or too high, vouchers can limit student options or artificially inflate the cost of education.

The solution? Education savings accounts, which are now available to special needs kids in Arizona. Under the new program, if a child with special needs leaves public school, a portion of the state per-pupil funding will go into a personal education savings account. The money can be used for private school tuition, online courses, tutoring, or home school curriculum. Any unspent money can be used for college within four years of high school graduation.

Such a program harnesses the benefits of vouchers, while tapping into the psychological and financial benefits of asset building. Of children who expect to one day graduate from a four-year college, those with savings accounts are six times more likely to attend college by the time they are 23.

Also seizing the ESA idea is Utah State Rep. John Dougall.  Via the Salt Lake Tribune, “Plan would shake up education” by Paul Rolly (9/16/11).  The full article with further details about Dougall’s plan available Here, but below are the highlights:

At its next general session, the Legislature will be considering a bold plan that would put a new face on public education in Utah and dramatically alter the relationships between school districts, individual schools and students.

Legislation proposed by Rep. John Dougall, would give each high school student in Utah an individual education savings account, sort of like a debit card, and that student could use that money any way he or she wanted toward earning a diploma.

He [Dougall] said the student would not be tied to one particular school. He or she could take, say, four classes at Highland, and pay Highland out of the student account for those four classes, then take two at Skyline, paying the money to Skyline from the account, then take a class at applied technology school and pay that school out of the account. The student could move between school districts while utilizing his or her schedule and could also use the money for charter schools or online instruction.

The plan would put into the student’s account nearly $6,000 a year under the assumption a typical high school class costs a school district about $700. The account would cover up to eight classes per year, with the ability of rolling the money over to the next year if the entire $6,000 was not spent.

The Goldwater Institute issued a policy brief, “A Custom Education for Every Child: ­The Promise of Online Learning and Education Savings Accounts” by Dan Lips (10/25/11).  It is available to read in full Here.  It’s only about 15 pages and easy to read.  We would like to share a few highlights discussing ESAs:

Education Savings Accounts can also be used as a vehicle to give families more control over how their children’s share of taxpayer-funded education dollars is spent.  Rather than providing funding to public schools to provide services for children, government funding for education could be provided directly to parents in the form of a state-managed education account.  Families would be required to use those funds to provide their children an education, and the state would require compliance with oversight rules and regulations to ensure that funds are spent appropriately.

State-funded ESAs give families control and real flexibility to provide their children with the best possible education. Unlike other traditional school choice policy vehicles, such as school vouchers or tax-credit funded scholarships, state-funded ESAs allow families the flexibility to shop for and customize an educational experience for their children by purchasing multiple types of education services.  In addition, state-funded ESAs give families an incentive to economize and shop for the highest-quality services at the lowest possible price, since funds that are not used remain in the child’s account and can be spent at a later time on education services.

They [ESA participants] could use their education account funding to purchase multiple types of educational services for their child, such  as  supplementary, home-based online learning courses, tuition costs for attending a full- or part-time blended learning  school, or tutoring or enrichment classes at a private school. Funds saved during the traditional school year could be used for other educational purposes, such as attending an academic camp or enrichment program during summer vacation, or to continue online or tutoring courses.  Additionally, unspent funds could be saved for future school years or to pay for college.

A state ESA program gives families the maximum flexibility to customize and choose the best learning environment for their children.  Since families are also allowed to save funds to pay for future education costs (including college tuition), a state-funded ESA program also gives families a strong incentive to shop for the best education possible at the lowest cost. Th­is incentive will encourage education providers to provide the best learning experience at the lowest cost, increasing efficiency within K-12 education.  Th­is will also encourage schools to innovate by harnessing new and emerging low-cost or free instructional resources like Khan Academy.  Th­e result of this process of authentic consumer choice and innovation will result in a more efficient K-12 education system for students, families, and taxpayers.

All children stand to benefit from a more customized education system.  For some students, the chance to participate in an online learning program may yield a modest but important benefit, such as the opportunity to take a class that is not available at the traditional public school. For others, a system of state-funded Education Savings Accounts could fundamentally change the way children experience education, creating a customized learning experience that includes a range of educational services, such as enrollment at a blended learning school, home-based instruction, and after-school or summer enrichment programs. Children of all academic, demographic, and socioeconomic backgrounds stand to benefit from online learning and a more customized educational experience.

The Heritage Foundation also put out a short WebMemo (if you would like to do a little more reading), “Education Savings Accounts: A Promising Way Forward on School Choice” by Lindsey M. Burke (10/4/11) and is available to read in full Here.

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