The Indiana Department of Education (IDOE) reported that 39.3 percent of voucher recipients
(7,779 students) were never previously enrolled in public schools in Indiana, implying that these vouchers are an additional fiscal cost to the state because, as many are interpreting it, “those kids would have paid their way to a private school with or without a voucher.” This is simply inaccurate, and here’s why.
Buried in the 7,779 students reported by the IDOE as “never attending a public school in Indiana” are voucher students in the following four groups:
- Kindergarten Eligible Tax Credit Scholarship Students – Students who first enrolled in kindergarten at a private school using the School Scholarship Tax Credit program, then shifted to the voucher program. This group is a very large portion of the total “Previous SGO Award” pathway voucher students. The rest of the “Previous SGO Award” pathway voucher students (all other grades) had to first attend a public school to be eligible to receive their original tax credit before shifting to a voucher.
- Kindergarten (and some first grade) “Failing School” Pathway Students – Incoming students who were never previously enrolled in public school in Indiana, but were zoned to a failing one. A portion of these first-grade students did not attend kindergarten at all (not mandatory) or were previously enrolled at a subsidized daycare center serving children of pre-K and kindergarten ages, but no further.
- Kindergarten (and some first grade) “Sibling” Pathway Students – Incoming students who were never previously enrolled in public school, but whose sibling is already part of the voucher program. A portion of these first-grade students did not attend kindergarten at all (not mandatory) or were previously enrolled at a subsidized daycare center serving children of pre-K and kindergarten ages, but no further.
- Grades 2-12 “Failing School” Pathway Students New to Indiana – Some incoming students in grades 2-12 have moved to Indiana from other states and were never enrolled in public school in Indiana, but were zoned for a failing one.
In all of these cases, some portion of these students would now be enrolled in the public school system if not for the voucher they are now receiving to attend a private school.
Furthermore, it is fair to presume most of the students in all four groups have been diverted from the public school system, whether it can be documented or not. Remember, the Choice Scholarship Program is means-tested, with vouchers awarded only to students from low- and some middle-income families.
Here’s why that 39.3 percent figure (7,779 kids) is actually more like 19.1 percent (3,779 kids)—and even that is an overestimate.
Calculations in Seven Steps
Kindergarten Eligible Tax Credit Scholarship Students (group 1 from above) is the largest, by far, of the four groups included in calculations to reach 39.3 percent, or 7,779 students. Based on data presented in the IDOE report, the number in this group is only about 3,700, and around 3,300 of them would now be enrolled in a public school if they did not have their voucher.
Our calculation of this estimate is laid out in substantial detail via STEPS 1-7 below:
Over the past three years, a total of 4,927 students first qualified for a Choice Scholarship (voucher) using the “Previous SGO Award” pathway. Table 10 in the IDOE report shows that 532 students followed this path in 2011-12, and 1,972 more in 2012-13. Table 11 shows 2,423 more students used this path in 2013-14. So, using those three years, the arithmetic looks like this:
STEP 1: 532 + 1,972 + 2,423 = 4,927 “Previous SGO Award” pathway students (original count)
Applying the 77 percent retention rate (see IDOE’s Table 17) to the 2,504 students using this path in the first two years, we can estimate that 4,351 of the current Choice Scholarship recipients initially entered the system via the “Previous SGO Award” pathway. Here’s the math:
STEP 2: 2,504 x 77 percent = 1,928 → 1,928 + 2,423 (year three count) = 4,351 “Previous SGO Award” pathway students (retention count)
Of that total, the IDOE report already excludes 640 students from its 39.3 percent “No Prior Public School” share (see Table 14). Thus:
STEP 3: 4,351 - 640 = 3,711 “Previous SGO Award” pathway students counted in IDOE 39.3 percent “No Prior Public School” share
Now, to be cautious, we must estimate how many of those 3,711 students might have attended a private school without Choice Scholarships. To derive that estimate, we must isolate the count of “Previous SGO Award” pathway students who entered the tax-credit scholarship program initially as kindergarten students. It is reasonable to expect some of these students might have still enrolled in a private school even without their tax-credit scholarship, then subsequently continued on in a private school without their Choice Scholarship (voucher).
Since the IDOE reported that 640 of the “Previous SGO Award” pathway students in 2013-14 were previously enrolled in a public school, we can then reasonably conclude the other 1,783 “Previous SGO Award” students reported on Table 14 received their first tax-credit scholarship award in kindergarten.1 This assumption is possible because, through 2012-13, the only eligibility paths for the School Scholarship Tax Credit program were: 1) switching from a public school, 2) entering kindergarten, and 3) switching from a private scholarship program. Thus, the remaining 1,783 students must have come through one of the other two paths.2
Based on another Friedman Foundation analysis, about 60 percent of the “Previous SGO Award” pathway students, during 2010-11 and 2011-12, were initially kindergarten-eligible students. Applying this ratio, we can estimate that 2,939 of all current “Previous SGO Award” pathway students were initially kindergarten-eligible tax-credit scholarship students.
STEP 4: 1,928 “Previous SGO Award” pathway students retained from Year 1 and Year 2 cohorts (from STEP 2) x 60 percent = 1,156 “Previous SGO Award” pathway students, retained from Year 1 and Year 2 cohorts, entering system in kindergarten
STEP 5: 1,156 (from STEP 4) + 1,783 “Previous SGO Award” pathway students from Year 3 entering system in kindergarten (from IDOE Table 14) = 2,939 “Previous SGO Award” pathway students entering system in kindergarten
Historically, about 7 percent to 8 percent of Indiana’s K-12 students have enrolled in private schools. Recognizing that existing private school options are more heavily concentrated in the areas where voucher-eligible students tend to be clustered (i.e., urban centers), I use a 15 percent baseline private school enrollment rate for this analysis. In other words, I am cautiously assuming Choice Scholarship (voucher) recipients are twice as likely to attend a private school, without financial assistance, as the statewide average, despite being from low-income families. Applying that 15 percent baseline private school enrollment rate:
STEP 6: 2,939 (from STEP 5) x 15 percent = 440 “Previous SGO Award” pathway students assumed to continue in private school without their voucher
STEP 7: 3,711“Previous SGO Award” pathway students (from STEPS 1-3) - 440 (from STEPS 4-6) = 3,271“Previous SGO Award” pathway students assumed to return to public school without their voucher
Making this final adjustment, I estimate that 3,271 Choice Scholarship students included in the IDOE count of 7,779 recipients that “never attended public school in Indiana” would now be enrolled in a public school if they did not have their Choice Scholarship.
For the other three groups, we simply do not have sufficient data to drill down and derive an estimate of students fitting each of these descriptions. Certainly, there are students in each of these groups, who were never enrolled in public school in Indiana, but would now be enrolled in public school if not for their Choice Scholarship. The IDOE should have the data detail to identify the number of students fitting the descriptions of group 2 and group 3, and may also be able to do the same for group 4. At the very least, it would be reasonable for the media and policymakers to request that the IDOE examine its database to determine if count data for those other groups can be isolated.
If IDOE’s Table 13 were reconstructed to differentiate between: a) voucher students diverted from public school and b) voucher students not diverted, using our estimates above (plus 729 as a count estimate for groups 2, 3, and 4 combined),3 then the breakdown would look like this:
|Revised Table 13: Impact of Choice Scholarships on Public School Enrollment
||2013 - 2014
| Students Diverted from Public School
| Students Not Diverted
| Total Choice Students
1. The only possible exceptions would be students who received their first tax-credit scholarship award at an older age because that had previously be using financial assistance from a private scholarship program.
2. The number of tax-credit scholarship recipients who were eligible by switching from a private scholarship program is de minimis. Furthermore, it is also reasonable to conclude the profile of this small group is very similar to the entering kindergarten group with regard to its propensity to enroll in a private school with any financial assistance.
3. 729 is about 16 percent of the 4,525 students reported as voucher-eligible via either the “Failing School” pathway or the “Sibling” pathway, as reported on Table 11 of the IDOE report. This is a very cautious estimate of the share of those students that fit the description for either group 2, group 3, or group 4. In fact, because the Choice Scholarship program is means-tested, it is logical to presume that most of these voucher students are at a high risk of returning to the public school system without continued tuition assistance.
ABOUT THE AUTHOR
serves as the Director of Fiscal Policy and Analysis at the Friedman Foundation for Educational Choice. The purpose of this fiscal analysis work is to clarify and elevate the understanding of the financial impacts of school choice initiatives on state and local governments, public school corporations, taxpayers, and families of school-age children. Prior to joining the Foundation, Spalding served as Controller/Chief Financial Officer (CFO) for the City of Indianapolis.