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"Education is the most powerful weapon which you can use to change the world." - Nelson Mandela

The Challenges of ESA Programs

By Carole Hornsby Haynes, Ph.D. |   October 1, 2015  National Center for Policy Analysis

America must think beyond the current system of government run schools to find market driven solutions for education. As parents continue to demand school choice, these policies will face increasingly difficult challenges:  administrative, constitutional, and regulatory.

While a traditional voucher can be used only in a lump sum, ESAs offer a different approach – funds are unbundled to allow access to a variety of private school options as well as options outside of traditional or private schools.

There are two ways that an ESA differs from a traditional voucher:  parents can totally customize their child’s education choices and they can save unused funds for later use.

Administrative Challenges

In 2011, Arizona passed a law to implement the nation’s first ESA program.  The Arizona Department of Education manages the program and deposits funds quarterly into a student’s privately managed ESA bank account.  Parents access the funds via a restricted-use debit card to pay for any number of education-related products or services of their own choice.

In 2014, Florida created an ESA program that is publicly funded but privately managed by non-profit scholarship organizations that participate in Florida’s scholarship tax-credit programs.

Given the differing administrative experiences of Arizona and Florida in ESA management, it seems that privately managed programs will be more efficient and effective than those managed by government.  Here are three points to consider.

  • Non-profit scholarship organizations are less likely than government agencies to be infiltrated by opponents.
  • Awarding scholarships is the primary focus of private scholarship organizations but not of a government education agency.
  • Scholarship organizations are more flexible and incentivized to address family needs than is a government entity.

Constitutional Challenges

The federal Establishment Clause of the First Amendment has been used by opponents to attack school choice.  However, in 2002 they were defeated in the school voucher lawsuit, Zelman v. Simmons-Harris.  The Supreme Court ruled that tuition support can be given to parents for use at private schools, including those run by religious orders.

Since then school choice opponents have been targeting states and state constitutions’ religious clauses as their primary legal means to discourage states from passing school choice legislation and challenging those states that have.  Government funded voucher programs are a mixed bag in state courts, but so far the courts have ruled in favor of programs with tax credit funding.

Regulatory Challenges

Empirical research indicates that privately funded educational choice programs are less likely to be over-regulated.

CATO’s Andrew Coulson published a 2011 study in the Journal of School Choice, reporting that individual tax credit or tax-credit scholarship programs have five times fewer regulations than voucher programs.

A 2010 study by CATO, “Do Vouchers and Tax Credits Increase Private School Regulation,” concluded that vouchers, but not tax credits, impose a substantial additional regulatory burden on private schools.  Policy makers are less inclined to attach regulations to tax credits than to public expenditures since the tax credit does not go to the treasury.

More states will likely pass ESA laws.  With private funding and management to avoid the over-regulation found in government schools, ESAs offer great potential for an education system that better fits the individual needs of children.

Copyright 2015 Carole Hornsby Haynes, Ph.D. All rights reserved

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