How do you lower costs while improving quality? Use the free market.
That is a straightforward, easy to understand concept. We’ve
seen it work with phones, computers, and other technologies. It’s true for
various services and products as well.
Combine that concept with this one we often say, about
government’s role and its interference:
Whenever
government attempts something beyond the proper role of government (protection
of life, liberty, and property), it causes unintended consequences—usually
exactly opposite to the stated goals of the interference.
Today we’ll apply the free market and getting government out of the way to education. If we can allow the free market to do its thing and innovate, we’ll get better quality education at lower cost—guaranteed better than government has been doing.
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| from the cover of Waiting for 'Superman' |
We need to let go of the fear that says, “We can’t trust the
free market with something so important to us.” No. We can’t trust government
interference with something so important to us.
Isn’t education, though, a basic responsibility of
government? Definitely not at the federal level; it isn’t an enumerated power in the Constitution and was never granted to the federal government. The fact that there is a
federal Department of Education is a usurpation—a seizure of power not granted.
At the state level, at least in Texas, for better or worse
it is written in the state constitution that the state will provide a free
education to all students up through high school. So that means it has to be
done.
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| How much did school closures due to COVID-19 set Texas student's back? Infographic from FamiliesEmpowered.org |
The Texas legislature is in session. That means (besides
that our freedoms are in jeopardy), if we’re going to do something about this—following
a year when public schools failed pretty spectacularly—this is the time.
My State Senator, Paul Bettencourt, filed bill SB 1968
last Friday, and later that day Representative Mayes Middleton filed the identical
House companion bill, HB 4537. It is called the Family Educational
Relief Program.
The bill looks to me to be similar to an Education Savings
Account (ESA), although there are some differences. Arizona is noted for doing
ESAs several years ago, limited to special education students. The parent would
have the option of taking 90% of the amount allotted for the child, to be used
in any combination of ways the parent sees fit. It’s similar to a medical
savings account in that way. Only approved expenses could come out of the
account. But the person manages their own funds.
The Texas bill isn’t aimed at special education students,
but at special needs; namely low income. While it could be expanded in future
years, as a pilot it is aimed at those whose incomes qualify them for federal free
or reduced-cost lunches. Lack of choice harms low-income families’ children
most.
There’s a
Need
Texas educates approximately 5.5 million K-12 students, roughly 10% of the children in the US’s 50
states.
A few years ago, we heard from Colleen Dippell, founder of
FamiliesEmpowered.org, which specialized in helping families get access to charter schools. She told
us in 2017 that there are 900,000 Texas students (almost 1 in 5) attending over
1,000 failing Texas schools—meaning the school didn’t meet the minimal yearly
progress (a pretty low bar) for three years in a row.
One approach to solving that deficiency has been charter
schools, which are growing ever more prevalent. But her estimate at that time
was that there were 130,000 students on wait lists for charter schools. Charter schools simply can’t meet the demand. You might also note that there are
multiple bills we have to oppose this session aimed at making it harder for a
charter school to start or expand.
Meanwhile there are 100,000 empty seats in private schools.
There’s a demand. And there’s a supply. But they aren’t
getting together.
Maybe it’s because the pent-up demand is coming primarily
from low-income families who can’t afford to pay private school tuition, and
the private schools can’t exactly provide education for free.
This bill uses money already being spent on those students
and allows them to use it for private school tuition. It could also be used for
online courses—of the parents’ choice, rather than what has been inflicted on
them by their school districts during closed schools this past year. It can be
used for curriculum, or therapies, or other materials as well.
What Are the Details?
If we use round numbers, we can say $10,000 is allotted per
student per school year. Of that $10,000, 90% means $9,000 put into a trust for
the student, with the parents as trustees, instead of the school district’s
board of trustees.
The remaining 10% stays with the school district to pay
maintenance and operations costs and loan interest. In other words, for every student
in the program, the school district gets $1000 for a student they don’t have to
educate. That means, the more students use the program, the higher per pupil
spending the school district has. There’s incentive to let the students go into
the program.
There are limitations. One is that the payments can’t
go to a household member or relative (within three degrees of consanguinity).
In short, homeschoolers can’t use it to pay one parent to teach, for example.
But a homeschooling family can use it for curriculum, online programs, therapies,
etc.
We homeschooled for ten years. Our total costs added up to much less than that for the entire decade, including field trips and camps. That was for
all three children. In other words, all our expenses, barring of course loss of
income from a second parent working, would be easily covered under this program.
If the account has money remaining at the end of the school
year, it rolls over in the child’s account for the following year. That means
there’s incentive for the parent to shop around and get a good deal—free market
at work.
The Arizona version was arranged to roll over yearly and could
eventually be used for college tuition. This Texas version also rolls over to each
next year but is only available as long as the child is eligible for public
school. That means it could be used for dual-credit courses at a community
college, as we did with our kids by age 15 or 16. Or it could be used for university
courses—in person or online. But, unlike the AZ plan, once the child graduates
and is no longer eligible, any funds remaining return to the program fund for
other students to use. That means there’s even incentive for the state to hope families
use the fund, because the state educates those students with a possible rebate
at the end.
What about parochial schools? Is that a problem? No,
it isn’t. The Supreme Court recently ruled in a Montana case that money used by
parents for the education type of their choice is not an establishment of
religion when it goes to a parochial school; in fact, it would be an
infringement on freedom of religion to bar that educational choice only for
religious reasons. So that is now settled law.
What
about Accountability?
Service providers and vendors must get pre-approval according
to rules set by the Comptroller to participate (i.e., to get paid by a parent out
of the child’s fund).
Private schools have to show notarized documentation
related to following the rules, including the number that can be accommodated,
safety measures at the location, etc., and would need to be accredited.
Actually most private schools in Texas are unaccredited, so this is a
limitation. Or it is incentive to get accredited. (Note: there is no correlation
between accreditation and education quality.)
Private tutors, therapists, or teaching services must
provide notarized documentation of their qualifications, licensing, current
employment (when applicable), and criminal history.
Online course or program providers must show
notarized documentation of their qualification to serve the students,
accreditation, etc. Services and vendor types not listed must also provide
evidence of qualification to serve.
In other words, it’s on the service providers to apply, and
the Comptroller’s office to verify their validity, so the parent doesn’t have
to.
Theoretically, if a parent wanted to use something not on
the list, they could let that service provider about the program and suggest
they apply. But otherwise the parents simply use those services already
verified by the Comptroller. The state’s agent would post a list of approved
service providers and vendors for parents to use.
While an education service provider may not charge a child
participating in the program an amount greater or less than the provider’s
standard amount charged for that service, a parent can choose to pay
out-of-pocket for anything either not on the list or any cost beyond the limits
of the student’s allotment. For example, in a market where this program is well
established, it is likely private schools would work to make costs fit within
the allotment; however, more expensive private schools can still be used, but
the parent would pay anything over and above the allotment. This is still
better than having to pay the full tuition over and above the taxes the parents
pay the state without receiving any educational service from the state.
Where
Does Funding Come From?
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| image found here |
About those grants, gifts, and donations: A company wishing
to donate could make a tax-deductible gift to the program. Even better, it
could apply for a tax credit—up to half the entity’s estimated tax payment
could be allotted to this program. (This comes under Chapter 230, Subsection B,
which is longer and more technical than I want to go into here.) This would
actually increase funds going to education without raising more tax revenue to
do so.
A small percentage of the student’s allotment (no more than
3% of any of four payments or a total of 5% annually) goes to the Comptroller’s
office for administering the program.
No Curriculum Interference: Another good feature is
that the Comptroller’s office has a hands-off approach to curriculum; it only
handles the funding. If the TEA or Commissioner of Education were handling the
fund, they would no doubt attempt to control what is taught and how, which kind
of defeats a main purpose of school choice.
There’s no federal money used, which means there’s no
federal control over what is taught or how, or anything else to do with the
program. That’s a definite plus. I think it also means, any education block
grant to the state is divided up among students still in public schools,
leaving more of any such funding to spread among fewer students—another incentive
for public schools to support this program.
Any
objections?
The people who have drafted this bill have decades of work
and experience behind them, working toward school choice. They have addressed
every objection opponents have voiced.
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It particularly helps low-income students.
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It does it without causing public schools to
lose funding; it even increases their per student amount.
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Vendors, service providers, and private schools
are all held accountable—as are the parents serving as trustees of their child’s
accounts.
It doesn’t address the opponents’ unvoiced objections—that they want to maintain control over what is taught, and that’s more important to them than actually providing an education to every student.
It
Introduces the Free Market
The most valuable thing about this program is that it
introduces the free market into this tiny corner of what has been a failing
government monopoly. Free market, once introduced, is likely to grow. That is
likely to lead to innovation, which means better education at lower cost,
something people have been saying couldn’t be done, even by adding obscene
amounts of money. It can’t be done by government. But when government gets out
of the way, and allows caring parents and the free market to see to education, the
possibilities are unlimited.
If you’re in Texas, let your state senator and
representative know you support the Family Educational Relief Program. If you’re
outside of Texas, let your representatives know about it and ask them to do
something similar in your state.
