Education Savings Accounts (ESAs) are “the way of the future,” writes Matthew Ladner in a new report released this month.
While vouchers give parents the ability to choose private schools for their children, ESAs allow parents to receive the state education dollars designated for their school-age children in savings accounts that they can then access with debit cards to use for a variety of education options: private school tuition, online courses, private tutoring, community college classes, etc. Remaining funds can be rolled into college savings accounts (e.g., 529 accounts).
Besides giving parents maximum flexibility, ESAs have the potential to improve the quality and efficiency of education. Unlike today’s education system, ESAs put pressure on schools to offer the best education at the most reasonable price in order to attract students.
Over the last four decades, per-pupil costs have gone up dramatically while student outcomes have flatlined. Taxpayers paid $4,060 per child for public education in 1970, but more than double that amount in 2006—$9,391 (adjusted for inflation)—with no academic improvement to show for it. ESAs have the potential to break this ever-growing inefficiency.
“People often assume that education quality cannot improve while its costs are lowered, but such an exchange occurs on a regular basis in the private sector,” says Ladner. For example, over the past 60 years, personal expenditures of total income on food, cars, clothing, and household furnishings have dropped by nearly 30 percent just as the quality of these items has increased. “Progress in terms of cost and quality represents a defining characteristic of modern life,” Ladner notes.
ESAs can also inspire innovation in the way students are taught. With the modern world of technology and the growth of online education, knowledge is no longer a scarce resource. ESAs serve to foster competition, encouraging schools to use new and innovative structures to increase the quality of education and knowledge available to students.
A comprehensive system of ESAs would allow more children the opportunity to receive not only higher quality education but an education uniquely suited to their needs. Evaluations of voucher programs indicate success, and parents who are part of these programs highly favor them over their previous experiences with public schools. Expanding upon school choice, ESAs offer maximum flexibility and open wider the gates of educational opportunity for all American students.
Amanda Lucas is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit http://www.heritage.org/about/departments/ylp.cfm.