Reality Check: What Vouchers Can — And Can’t — Do

Reality Check: What Vouchers Can — And Can’t — Do

Tuesday, March 14, 2017

This commentary by Paul Hill was originally published in The Huffington Post:

Betsy DeVos’ most fervent supporters and opponents agree on one thing: that she would like to divert federal funds from existing public schools and cause a mass migration into private schools. But simple arithmetic tells us that these expectations about what she can accomplish—or destroy, depending on your point of view—are wildly inflated.

The federal government doesn’t spend nearly enough money in education to have such a big effect. Federal Title I funding to local education agencies, the main tool at the Department of Education’s disposal, totals $15 billion. If DeVos were able to turn all that money into private school vouchers for students currently receiving Title I services, each eligible family would get about $600. If the same money were spread among all public school students, a voucher would be worth less than $300.

That kind of money doesn’t cover private school tuition, which starts at about $10,000 a year. With a $600 voucher, a few families who were on the cusp of affording private education could decide that the little bit of extra money was enough to allow them either to stay in or transfer to private school. Those families might stabilize or even slightly increase enrollment in private schools. It’s unlikely that many families now attending free public schools would decide that a small discount—$600 represents about 6% of average tuition—justifies ponying up the remaining $9,600.

The Trump administration has floated a fallback proposal, tuition tax credits for anyone who contributes to a voucher program. Donors could reduce their taxes by a dollar for every dollar they give. This approach—correctly called a tax expenditure—would have exactly the same effect on the federal government’s bottom line as a government-operated voucher program would. Readers can judge whether a deficit-conscious Republican Congress is likely to approve a tax credit that adds more than $15 or $20 billion annually to the national debt.

Vouchers (whether funded directly or via tuition tax credits) could benefit communities that have struggling but high-quality private schools that might be preserved rather than being lost entirely. But whether a modest-sized program can do anything more than help fill up existing private schools depends on the answers to a few questions. Once existing private schools reached their current capacity, would they expand to take more students, or would new private schools emerge? Would entrepreneurs be willing to start schools knowing that even with their vouchers, families would have to pay almost full tuition? Would those schools be good enough to keep the families they attract and to grow to an economically sustainable size?

Unless the answers to the last two questions are strongly positive, vouchers of the size that the federal government can offer are extremely unlikely to stimulate a major supply-side response. Where a locality has no good private schools already, $600 vouchers are unlikely to cause any knowledgeable person to start a new school. The experience of charter schools shows how hard it is to build a new school that will work well from day one and that families who are willing to switch into a new school will leave it in a flash if it is disappointing or poorly organized. Entrepreneurs who are determined to open schools may find it more appealing to go the charter route—which comes with full public funding for every child who attends—rather than going into a voucher market.

So what could DeVos accomplish with the small vouchers she’d likely be able to fund? Vouchers can be used not just for school tuition but for other kinds of educational vendors. If families had $600 vouchers they could use to buy enrichment courses, entrepreneurs might compete for the money by offering innovative extracurricular or tutoring programs at all types of schools. Charter and traditional public schools might offer to use voucher funds for online courses, especially in subjects where qualified teachers are in short supply. They might be able to use some voucher money to have teachers proctor study halls while students take online courses, paid by vouchers, in subjects a school’s staff is not equipped to teach. These approaches could ultimately benefit all students, even in rural areas.

Of course, some level of regulation would be necessary to ensure quality. Schools would need to choose and point parents to programs with good track records. This isn’t a full-scale free-market experiment. The designs must be realistic and the improvements incremental. But with that sort of attention, the small voucher plan DeVos can establish is unlikely to do much harm, and has a chance of doing good for many students.

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