Jason Riley: The Next Step is Education Savings Accounts

March 1, 2017

 

(Guest Post by Matthew Ladner)

Jason Riley weighs in on ESAs, federalism and parental choice in his Wall Street Journal column today:

After years of federal overreach through No Child Left Behind, Common Core and Obama administration “guidance” on lavatory usage, the states—where Republicans now occupy 33 of the 50 governors’ offices—are not only reasserting local control of K-12 education but reimagining it.

In addition to this charter progress, education reformers see prospects for more private school choice in the form of education savings accounts, or ESAs, which they describe as the next step in school choice. Under an ESA system, money that would otherwise go to funding a child’s public-school education is instead placed into a restricted-use bank account, from which the family can withdraw to spend on a variety of education-related services. Like vouchers, ESAs allow the money to follow the child. But ESAs don’t limit education options in the way that vouchers do. Instead, families can use money in the account for tuition, textbooks, tutoring, test preparation, transportation, Advanced Placement courses, online learning and even college savings accounts.

Jason Bedrick, a policy analyst at the research organization EdChoice, told me that along with allowing families to tailor spending to the education needs of their children, ESAs can control costs. “Moving from a coupon or voucher model to a bank-account model helps guard against tuition inflation like we’ve seen in Pell Grants,” he said. With ESAs, “there’s no price floor. If you’ve got a $5,000 voucher, no school is going to charge less than $5,000. With an ESA, there’s a lot more competition because private schools are not just competing against each other and against public schools but also competing against other sorts of education opportunities.” In other words, a parent with an ESA has the ability to hold both public and private schools accountable.



Parents to Technocrats-mind if I cut in?

February 9, 2017

(Guest Post by Matthew Ladner)

Mike Petrilli published a piece on charter school authorizing and oversight in response to Jason and Jay. Before the fun starts, let’s just note the following:

  1. State authorities are going to occasionally close charter schools whether I, Mike, Jay, Jason or anyone likes it or not. Let’s therefore not worry about whether or not we should close a charter school caught having students sacrifice goats to Baal out on the playground- it’s going to happen.
  2. Whether or not this is going to happen or even should happen is not terribly relevant. Mike cites a 3% estimate for charters closed by authorities over academics. I’m personally comfortable with a far higher closure rate. So long as parents take the lead, I’m not going to sweat some authority jumping in front of the parade to close the Baal school.
  3. Ultimately therefore the debate should be about how to get to a policy environment where parents are taking the lead on quality control.

The reasons for this are ultimately very practical. Technocrats make mistakes and many do not develop the close relationships and sweat the details behind test scores the way Mike describes. More to the point all of these schools have access to the legal system, can lawyer up, engage in delaying tactics, get their parents riled up to resist closure etc. It is genuinely worth asking whether the juice is worth the squeeze in many cases.

Meanwhile, when parents close a school there is no resistance, no lawsuits, no delaying tactics. This is the most potent and brutally efficient form of accountability by a very wide margin. Now…breather deeply…

…close your eyes…

…channel your inner Rick Hess and think broadly about what sorts of policies and practices can get you there…

…do you see it?…yes….

Now…you are back on the green…nicely done….yes and now you are doing it again…

Good…very good…yes both of those states scored a 9/33 on NACSA’s ratings but rocked the 2015 NAEP like an 80s hair band trashing a hotel room suite that had it coming. Breathe even deeper…do you see a role for an all-powerful command and control technocrat in this vision?

No? Good-me neither. Light touch stuff inevitable, heavy-handed stuff risky and counterproductive, parent lead highly desirable. I don’t think there is a whole lot to argue about.

Okay open your eyes now. I think we have this all sorted out!


The Three Bees release New Study on Tax Credit Funded ESAs

January 21, 2016

(Guest Post by Matthew Ladner)

Jason may have not yet developed the shameless self-promotion bug that afflict the rest of us here at JGPB, so I’ll mention for him that he has a new study out along with Jonathan Butcher and Justice Bolick (ah….I just love the sound of that…) on tax-credit ESAs.

The Three Bs make a strong case on the desirability of converting existing tax credit programs over to multiple uses, and also correctly note possible constitutional advantages under some state constitutions for a tax credit approach. The technology for allowing multiple uses for funds looks to be better and cheaper than one might expect (account management/oversight technology is fairly advanced) which may allow for oversight within the admin fees typically allowed by scholarship tax credit programs.

The Three Bs did not directly address the topic of scale. The mighty Florida tax credit program currently looks likely to reach the practical limits of its ability to scholarship children somewhere below 100,000 out of Florida’s 2,500,000 students. This might change if new taxes can be added to credit, but the mechanics of creating a credit against some taxes seems somewhere on the speculative to work-in-progress spectrum at present.

Thus I enthusiastically support conversion of existing tax credit programs to multiple uses, and under some state constitutions, it might be a very good idea to choose this option over a state funded model. Outside of those circumstances, I’d recommend taking your chances with a state funded model if aiming for more than a pilot project.


I Love It when a (Decentralized) Plan Comes Together…

January 14, 2016

(Guest Post by Matthew Ladner)

Jason and John White have been having a public dispute over the interpretation of the NBER Louisiana study. I await Jason’s response, and given the importance of the subject I hope both sides of this debate will take pains to avoid vitriol as it unfolds. A reasoned examination of the evidence will best serve us, and everyone should acknowledge in advance that we bring a variety of assumptions to the table with us in this debate.

There is one point in John’s response that I would like to address presently. Early on the Superintendent says:

More important, however, is the larger implication I take from Mr. Bedrick’s thesis: that private school choice advocates in America, Mr. Bedrick among them, have failed to establish a coherent, prevailing belief system about the role of private schools in providing an education of measured quality, at scale, for the nation’s most disadvantaged youth.

Towards the end he says:

Absent better systemic answers than those offered by ideologues, publicly funded private school choice for all children will continue to be more of a factor in legislative debates and scholarly conferences than in the homes and neighborhoods of America’s youth.

The use of the word “measured” in the first statement brings up the observer effect from physics: the act of observing can in itself change what you attempt to measure. People can have honest disagreements over how much private school participation we are willing to sacrifice for what type of measurement, but let’s not start with the premise that the answer is “whatever it takes no matter what.” For almost going on two decades now for instance the McKay Scholarship program has reigned as the largest voucher program in the country. Would I prefer having an evaluation component of some sort? Yes-I’m pretty confident that we would learn valuable information. Would I be willing to do it if a large portion of participating schools were likely to pass on participating? No- I would be content to let parents work out testing on an individual basis with their schools.

In other words I want to prioritize the needs of parents over my needs as an advocate.

On the issue of scale and having a plan, I think we could have a long debate about this, but ultimately I don’t think it is necessary. I think that the sort of effort that Superintendent White is referencing may relate to the sort of private philanthropic efforts we see going on in the New Orleans charter school space. An unexplored possibility to consider by the way, is that the Herculean private human capital efforts we see going on in the charter space may have eclipsed the private school sector. How many rational actors would open a private as opposed to a charter school in New Orleans given the totality of policy and private philanthropic efforts? But I digress…

The reason I don’t think we need to spend too much time debating the sort of genuinely heroic efforts we see going on in the New Orleans charter space: I don’t think we can afford to scale them. You don’t see it discussed often, but ah, well, the cost per teacher placement from sources like Teach for America has not been going down. Quite the opposite from what I understand. Don’t get me wrong- I love TFA kids and I fully support the efforts of philanthropists in rebuilding the New Orleans education system. I simply have my doubts that our collective philanthropic efforts could have handled a district the size of Houston had Katrina veered that way, much less the rest of the country.

This raises the question- can we achieve “an education of measured quality, at scale, for the nation’s most disadvantaged youth” without these sort of efforts? If you care about the disadvantaged, the answer had better be “yes” because otherwise they will be remain holding the short end of the stick in life. To answer the question, I decided to examine the NAEP results and trends for low-income kids in the relatively regulated and highly philanthropic supported charter sector in Louisiana with similar kids in the Wild West and (relatively) lightly supported Arizona charter sector.

To get as close to apples to apples as possible, I compared the results for Free and Reduced lunch eligible students in general education programs attending charter schools in both states. The general education focus is due to possible differences in participation among ELL and SPED students in the two states. Louisiana has a comprehensive effort to support charters and to shut them down when they under-perform. If you see race as a proxy for other unmeasured factors etc. the average low-income charter child in Arizona is likely to be Hispanic, whereas I’m guessing in Louisiana they are more likely to be Black. Every state has their story about how their poor kids are the toughest to educate in the world (here is AZ it is “they come up North and they don’t even read Spanish!”) but I view all such claims as suspect-poor kids are tough to educate everywhere.

In terms of charter sectors, Arizona has an almost entirely decentralized process of school creation, and the only people making plans are those opening schools and parents seeking places for their child- no common app, the state rarely shuts a school down. etc. We have some TFA kids but I met more of them in a visit to the French Quarter than in 13 years of living here in AZ. The West in short doesn’t get any wilder.

The NAEP will only provide data for this comparison between 2013 and 2015, and I make no claims regarding this being a definitive comparison, merely suggestive. So with those caveats: here is what the gains look like across all four NAEP exams for FRL general ed charter students:

AZLA

So both sectors did well in generating gains overall for low-income kids- so bully for them. Louisiana charters enjoyed larger gains in 4th grade gains, but Arizona charters enjoyed a still larger advantage at the 8th grade level. If we look at the overall scores for these students rather than the gains, we see no decisive advantage for either state.

AZLA2

Those who care about the interests of poor children should celebrate the ability of Arizona charter schools to deliver big gains for low-income kids. They did it without direction from the state and without massive support from philanthropists. This is to be celebrated in large part because we don’t have enough philanthropy to do New Orleans everywhere even if we wanted to.

So- as one of the school choice Jeffersonian types, I’ll address Superintendent White’s point about a plan squarely. What is my plan? On charter schools, my plan is to let ‘er rip. It’s working out a splendid fashion and I love it when a plan comes together…

On private choice, I’d like to see a system that gives a meaningfully higher level of public subsidy to disadvantaged children (low-income, ELL, SPED) with some light touch academic transparency measures (NNR testing required by students rather than schools, academic studies, parent surveys) and then let that rip too. The great virtue of this plan in my view is that it doesn’t require me or anyone else to manage or direct it.

In other words, I think school choice technocrats should aspire to be in control of as little as possible. The NBER study reinforces my view of its desirability.

UPDATE: Jason’s response to Superintendent White is up at Ed Next


Heritage Foundation’s Burke recruits Arizona All-Stars to talk ESAs

August 11, 2015

(Guest Post by Matthew Ladner)

I finally got to watch this Uncle Milton birthday event at the Heritage Foundation on ESAs with Jason Bedrick, Jonathan Butcher and Tim Keller of Cato, Goldwater and IJ Arizona respectively.  Cactus patch represent! Spoiler alert but look for guest appearances by a famous spymaster and another by a very famous animated character.

 


Attack of the Wonks!

June 23, 2015

(Guest Post by Jason Bedrick)

As the Fordham Institute’s ESA Wonk-a-thon is coming to a close, I thought it would be useful to summarize the views of the participants to identify areas of consensus and contention. As JayBlog readers may recall, Fordham’s central question was:

As Nevada implements its groundbreaking education savings account program, what must it get right in order to provide positive outcomes for kids and taxpayers? Should state authorities stay out of the way? Or are there certain areas that demand oversight and regulation?

Inevitably, such summaries will lack the depth and nuance of the complete essays, but I will endeavor to faithfully record what I take to be the main recommendations from each wonk. (If an author thinks I missed or misconstrued something, please yell at me in the comments section.) The following summaries appear in the order that Fordham posted the originals:

Michael Goldstein (Match Education): Nevada needs an “individual, organization, or coalition of champions who take it upon themselves to ensure that their [state] provides excellent school options to all children and families.” This “harbormaster” would recruit high-quality providers to the state and provide parents with good information.

Seth Rau (Nevada Succeeds): Nevada should ensure all ESA students take NNR tests and track student outcomes. The state treasurer must ensure the application process is user friendly, distribute restricted-use debit cards, and conduct annual audits. Otherwise, providers should be free to innovate and parents should be free to choose among them.

Matthew Ladner (Foundation for Excellence in Education): The state should ensure financial accountability through restricted-use debit cards and the whitelisting of vendors and eventually of individual products. The market can foster quality through platforms where users rate providers (as happened informally in Arizona). The state should aggregate NNR test scores and hire an academic researcher to report on the data, but otherwise avoid trying to regulate quality.

Jonathan Butcher (Goldwater Institute): The state should ensure the ESA funds are being used for eligible educational purposes by reviewing receipts before issuing the next quarterly installment. Students should take NNR tests and the state should commission an academic researcher to report on the results. Otherwise, policymakers should rely on the market to ensure quality.

Tracey Weinstein (StudentsFirst): The state should “set a high bar for the quality of services offered by providers” and “eliminate providers who consistently fail to meet the mark.” The state should also provide ESA families with information about providers.

Andy Smarick (Fordham Institute): The state should “prioritize transparency, continuous and small-scale course corrections, and research” and “collect and publish information on providers, participation rates, student outcomes, and more.” In the long term, researchers should “study how the public’s interests are and are not being met by these increasingly private choices.”

Neerav Kingsland (New Schools for New Orleans): Nevada should increase public funding to $7,000 per student with more for low-income, ELL students, and special needs students, and that educational institutions should be prohibited from charging ESA families additional tuition beyond the amount the state deposits in the ESA. 

Lindsey Burke (Heritage Foundation): State regulators should stay out of the way of the market. The state should primarily concern itself with ensuring taxpayer dollars are used only for eligible expenses and making the application process transparent and user friendly. Responsibility for academic outcomes should lie primarily with parents, though the state’s NNR testing requirement is appropriate.

Jason Bedrick (Cato Institute): Policymakers should resist the urge to overregulate. Quality is best fostered through the market process: provider experimentation, parental evaluation, and organic evolution. A robust market ensures quality by channeling expert knowledge (e.g. – private certification and expert reviews) and user experience (e.g. – platforms for user ratings). The state should limit its role to ensuring that ESA funds are spent only on eligible expenses and serving as a repository for information. 

Adam Peshek (Foundation for Excellence in Education): The state should primarily concern itself with providing financial accountability (restricted-use debit cards, auditing), but responsibility for academic outcomes should rest with parents. We must “remain vigilant against death by a thousand regulatory cuts.”

Robin Lake (Center on Reinventing Public Education): Nevada must recruit a “new breed” of bureaucrat that will “learn how to regulate choice without squashing innovation,” “develop creative and better approaches to fiscal and performance accountability,” “coordinate with non-governmental agencies to develop a strong supply of high-quality providers,” ensure transparency, and “build a dashboard of indicators of a healthy market and government regulatory structure” (among other objectives).

Travis Pillow (redefinED): Regulators should give providers the freedom to experiment (even though some experiments will fail). However, the state should ensure the health and safety of students and prevent financial fraud. The results of NNR tests should be reported to parents and the public. The state should provide an online forum for parents that would help catch administrative problems and could serve as a Yelp-like provider rating system. The state should give more money to low- and middle-income families and students with special needs. 

Robert Tagorda (SoCal education reformer): To operate at scale from the outset, the state treasurer’s office and state department of education must collaborate effectively. The state must broker information to ensure the marketplace functions properly, but it can’t do it alone. The state must foster organic solutions and exchanges of information such as platforms for user reviews.

Rabbi A.D. Motzen (Agudath Israel): “Almost universal” eligibility isn’t good enough. The state should expand eligibility to all students, not just those who attended a district school for 100+ days in the previous year.

There appears to be some consensus around financial accountability. The state must ensure that ESA families are only using taxpayer funds for their intended educational purposes. To that end, most of the wonks who addressed the matter called for utilizing restricted-use debit cards and/or auditing.

The primary area of contention is the role of the state in guaranteeing educational quality. Some want the state to set standards, measure performance, and perhaps even “eliminate” providers who don’t meet those standards. Others (myself included) respond: “Get your regulatory paws off me, you dirty technocrats!” are concerned that such efforts would stifle the very diversity and innovation that the ESA is intended to foster.

It’s an important debate. I commend both the Fordham Institute for hosting it and the participants for offering their insightful analysis. Differences in means aside, we all share the same end: fostering an education system in which all children have access to high-quality providers that meet their individual needs.