Ep. 189: Big Ideas - Failure of Vouchers with Anna Egalite - EdChoice

Ep. 189: Big Ideas – Failure of Vouchers with Anna Egalite

June 18, 2020

Anna Egalite discusses her chapter in the book, Failure Up Close: What Happens, Why it Happens and What We Can Learn From It. She addresses the ways in which private school vouchers and tax-credit scholarships have failed.

Jason Bedrick: Hello, and welcome back to EdChoice chats. I’m your host, Jason Bedrick Bedrick, director of policy at EdChoice. And this is another edition of our Big Ideas Series. Today, I’m delighted to be joined by Dr. Anna Egalite, assistant professor in the department of educational leadership policy and human development in the College of Education at North Carolina State University. She is the author of a book chapter, “The Failure of Private School Vouchers and Tax Credit Scholarships,” which is chapter seven in Failure Up Close: What Happens, Why it Happens and What We Can Learn From It, edited by Dr. Jay Greene and Mike McShane of EdChoice. And we had a podcast that was up recently with Dr. Jay Green on the entire book, but thought it would make sense to focus on just this one chapter with Dr. Egalite. So Anna, thank you so much for joining the podcast.

Anna Egalite: Thanks, Jason. It’s great to be here.

Jason Bedrick: So, as I mentioned, we recently recorded the podcast on the whole book, but your provocatively-titled chapter merited an entire episode itself. So when you say that vouchers and tax-credit scholarships have failed, what do you mean?

Anna Egalite: So, I know that I maybe made some enemies with that title, but the project was something that was really exciting to be a part of. And the editors, Jay and Mike, said you have total freedom to pick any ed reform that you think has been a failure. And it was just so easy to pick obvious ones that haven’t worked out that I thought, “I’m really going to challenge myself and think about why vouchers and tax-credit scholarships haven’t delivered on these transformative promises and the hopes that people pinned on them.” And really it’s just a result of the legislative process, the compromises that have to put in place to get these programs passed. And then once they’re in place to scale them. Legislators are always looking toward the next election. And so they want to scale a program quickly to make sure that it’s a permanent fixture in a state. And I think that that has resulted in some missteps that has hamstrung these policies and held them up and made sure that they haven’t spurred the major innovation that they potentially could have.

Jason Bedrick: But in terms of failure, I mean, there are people who are using the programs that say, “Hey, well, this is working really well for my child.” Or, “We’ve got some randomized controlled trials or random assignment trials that have positive findings.” There have also been some with some negative findings, but what do you mean when you’re saying that they failed? They failed to live up to their hype? They failed to deliver major innovation? What exactly do you mean?

Anna Egalite: So I agree with you that there are, no doubt, many families out there who would say, “Hey, it hasn’t been a failure for me,” but the big picture, if you work in policy, you have a responsibility to think about the big picture. And there’s 55 million school-aged children in the United States, and their education is at best for many of them. I think that the major changes that are needed to the education system are game changing innovations. There are persistent and stubborn problems that haven’t been alleviated over decades of reform efforts. And yes, a small number, less than 1 percent, of all of those kids, those 55 million kids, have been able to use a voucher or a tax-credit scholarship to exit their assigned public school or their charter, if they wanted to exit that, and attend a private school at state of expense.

So when I say that failure, I’m talking about access that very few of the school-aged children in the United States are actually utilizing choice, particularly private school choice. And then when you talk about you alluded to the test score impacts. Yeah. I agree that there have been randomized control trials that have sort of modestly positive to mixed findings. Some of the more recent ones have been a little disappointing. As a body collectively, I would say it inspires cautious optimism, but it really hasn’t been transformative.

Jason Bedrick: So it hasn’t lived up to the hype of in 1990 when John Chubb and Terry Moe famously wrote, “Reformers would do well to entertain the notion that choice is a panacea.” Well, it’s not a panacea, at least not in its current form. So your article identifies a number of possible explanations for why traditional school choice programs, new vouchers, and tax-credit scholarships, have failed to deliver significant improvements in test scores or to spur major innovation. But you argue that education savings accounts have the potential to achieve what they couldn’t. So before we dive into the shortcomings of the traditional choice programs, let’s just cover quickly: How do ESAs work?

Anna Egalite: Sure thing. So ESAs have been around since 2011. I think they have flown under the radar a little bit. A lot of people aren’t aware of what they are. It’s essentially a debit card for education expenses that are approved. It’s government authorized and it’s restricted use. You can’t take it to Walmart or take it to a liquor store and scan it. It’s not going to be accepted. The purchase will be declined. So in the same way that if you think of a school being publicly funded, but privately managed, like a charter school, for example, that’s how the debit card operates. It’s publicly funded, but the parents are actually privately managing how it should be used. And it can only be spent on approved educational expenses. And it depends on the particular program what is approved, but that includes things like private school tuition.

So you could use it like a voucher, or you could purchase individual tutoring. You can use it to buy instructional materials. So very small purchases, less than $10, or large purchases like a community college course or an advanced placement course, an online course, exam fees. Or if your student has special needs and has an IEP or some other way to verify that, then there’s also ESAs that allow you to purchase therapists, or specialized services, or approved software that can help with their educational needs. And then also the last part of it, depending on the state. So I’m located in North Carolina and unfortunately our ESA doesn’t allow for this, but many of the others do, which is that the unused funds roll over into the next year and actually could even be saved all the way for college expenses.

Jason Bedrick: So then the main differences between traditional vouchers and tax credit scholarships and the ESA is that, whereas a traditional voucher, you have to use in one place at one time, the ESA, you can divide it up and use it on a wide variety of different vendors. And like you said, in most cases, save it. So one issue you discuss is the obstacles to accessing school choice. So what sort of obstacles do families face and exercising school choice? And then we can talk about how ESS might actually address these issues.

Anna Egalite: Sure. So in some cases, it’s an access problem. Families might live in a rural area where there aren’t a lot of school options or to get to one would be very expensive in terms of working out the transportation and who’s going to get them there. Also, for many of the families in North Carolina, we have had an ongoing evaluation here for several years. We have a growing program, but for many of the families that apply for an award or deemed eligible, but then never accepted, they explain that some of the reasons are these hidden costs that they incur once they get to the school and they realize, “Oh, wow, the voucher only covered 90 percent of my tuition. So I’m responsible for the remainder. And I have to buy uniforms, textbooks, testing fees, afterschool care, activity fees,” and all of these hidden expenses that they didn’t anticipate.

So there’s financial barriers, there’s transportation barriers. And then there’s simple geographic barriers. If you live in a rural area and there aren’t a lot of private school options, well, you’re kind of stuck. With an ESA, you could still purchase educational goods and services, perhaps online, for example, but with a voucher, you can take it to a school or bust, so that’s it.

Jason Bedrick: All right. So with the ESA, you could cover a lot of these other fees for transportation, uniforms, textbooks, and so on. And even if you’re in an area that doesn’t have a lot of private schools, it still expands your access to things like online schools or a variety of different things that you could purchase to use for homeschooling. It’s still expanding educational opportunity for people in those areas. But of course, we want to make sure that the resources that are put into these ESAs are on roughly the same level as what they would otherwise be spending at the public schools. Otherwise, there’s still going to be that access problem.

Anna Egalite: Right. And just thinking about that issue of resources and equity and who owns the resources. I think a really important philosophical point that became clear to me as I was writing this chapter is a certain amount of money is allocated for the education of the student, but in a voucher context, any savings, they accrue to the state. So even though we might have allocated you about your for say $6,000, you choose a private school that only charges $5000, the state pockets that $1,000. Whereas I think with the ESA, it is a much more equitable lens where it says says, “No, really. Your child is entitled to $6,000 this year for their education. Yes, the private school tuition is $5000, but you still get this $1000.” And families will absolutely welcome that with open arms because of the hidden expenses that I mentioned.

Jason Bedrick: Now, just before we go too far into this, is a part of the problem here, really, that the school choice programs are too small? So in other words, we’ve had small school choice programs that produce small positive results. And they tend to just fill empty seats at existing schools. But perhaps if we had much larger programs, meaning more eligibility, more students participating. If more people are able to access choice, we would see that supply side response more schools would be opening. There would be greater competition. And perhaps we would see more robust results.

Anna Egalite: Perhaps, but we do have a lot of private schools that could be participating in these programs. The money is there. The student interest is often there, and yet the programs at the schools aren’t signing up. And so I don’t think it’s sufficient to say we should just expand the programs that we have, because there’s something about the design of the programs that’s not spurring innovation. It’s not just that we need new schools to be created. It’s new thinking about how you teach and how students learn. And when instructional expenses are counted in whole units and very inflexible in that way, there’s just no incentive for entrepreneurs to move into the education space. Any kind of an innovation that’s going to be targeting a family with a niche need, a very targeted, specialized need or want, there’s just no financial incentive to put the resources into developing that type of service or curriculum or a specialist.

Jason Bedrick: So, the size of the program might contribute, but even more important in some ways is the way that the program is designed. And your article identifies a number of ways in which government regulations on the school choice programs have stymied their effectiveness. So which sort of regulations are the most problematic and why?

Anna Egalite: So, I think it varies by state. And I’m not saying that regulation in general is problematic. Regulation is, of course, necessary. And I tried to set that aside in the article to say, “Oh, wow, this concept of ESA sounds like it’s ripe for abuse. And here’s all the ways it could go wrong.” But there are procedural solutions, I think, to many of those. The broader question of regulation is around goals. And if you regulate the private schools or the private school service providers, educational service providers, to the extent that they start to look like the public schools, you’re back where you started.

There’s a reason the families wanted to exit that sector in the first place. It wasn’t effective. This is the real contribution of the book you mentioned at the start of our conversation is that they explained how, from a political science perspective, the public schools over time accumulate regulations, the bureaucracy grows, and it slows innovation. And it prevents personalization at the point of service delivery, which is how education is most effective. And so I’m not suggesting that particular regulations should not ever be applied, because I think it varies by the local context. But I think that ESAs get us away from thinking about, “Which body of regulations are safe and which are going to put off the supply,” to thinking more so about, “Well, what’s going to spur innovation?”

Jason Bedrick: And so how do ESAs get us around that? Let’s talk a little bit more about that. I mean, so if the concern is that there are too many regulations, and like you point out, any one regulation in and of itself might not be such a big deal, but when you put all of them together, it’s a problem. Although there are in some cases, when you have nationally norm reference tests, most private schools are already offering those or having their students take those. But some of them get very concerned when you mandate the state test, because then they feel like instead of choosing a test that aligns with their own curriculum, now they’ve got to change their curriculum to meet the state test. Otherwise, their students are going to be penalized because if they’re not aligned, they’re going to look like they’re not doing as well as these other schools.

So then they’re making decisions about curriculum, not based on what they think is best for the students, but what this test requires. So you’ll have a whole bunch of schools that will just say, “Well, no, thank you. We won’t take the voucher if it means the state test.” Or, “We won’t take the voucher if it means that we have no control over our admissions requirements anymore, or if we’re subject to price controls.” I mean, so I think there are some regulations that more than others will force schools out of the choice program. But I think the point generally that it’s hard to talk about regulation. Overall, we have to talk about specific regulations and then the overall regulatory burden, but how do ESAs actually get us around this issue?

Anna Egalite: Well, so I will echo what you said about the schools. A lot of them have voiced their concerns about testing that you’ve raised, but from a research perspective, if you don’t have a common measure, then you have no idea how students are performing. So many of the programs are written in a way that mandates an evaluation. And so that really is saying, “Well, there has to be some kind of a common measure.” There’s shades of gray there. You don’t have to release school light scores. You can have collective factor students as a whole performed in this way and so on. But how do ESAs get around some of these flaws? The biggest thing is that they’re a family-centered reform as opposed to being centered on a particular institution, like a particular school or a particular sector. So I think that’s really empowering for families.

It gives them the power of the purse and it makes their voices elevated a little bit. Because the way that power is dispersed is something that we need to consider about how we are going to address inequality. And school board elections are very ineffective tools for elevating the voices of the marginalized. Their voices just aren’t heard at the same level. And in many cases, they may have a preference for a particular candidate, and if that goes against the interests of some of these special interest groups, then they’re sort of at a loss because in many cases, those with the most to gain from a particular candidate are the best well-equipped to organize and get out to vote. And it’s going to be on an unusual day to get their preferred school board member elected. So ESAs are a way to put more power to families that otherwise wouldn’t have it by giving them financial resources. So one way to exercise more power over their lives.

Other ways that they solve some of these problems is the access problem. So very simply, like we mentioned, parents in rural areas, there might not be a lot of private schools for them to choose among, but if they have the power to purchase educational goods and services at the individual level of the service, then that’s still a way for them to have more freedom to engage with a tutor, or online services, or other goods that they know for their particular child that they would benefit from.

Jason Bedrick: And can you speak a little bit more about this idea of the school boards? Because you hear a lot about, “Well, we want local control and subsidiarity. So we want to push these decisions down to the most local level possible.” And there’s a lot of talk about how, while the most local level is your local school board election, but really you’re making the case that the most local level is actually the families themselves. And that if we truly care about the most disadvantaged families, well, if they don’t have a voice in the school board, I mean, they’re minority voice. So they aren’t likely to win the school board election. Then the real way to empower them is actually to give them the ability to make decisions for their own family, as opposed to trying to persuade a majority of people in their area to go along with whatever they want, right?

Anna Egalite: Right. You were trying to persuade a majority of people in their area to go to an off cycle election and go up against the coordinated power of another interest group that’s going to be well organized and a far better resource. So yeah, I think it is a way to just better disperse power. And it sort of builds on the logic of parents being the primary educators, because it gives them the direct decision making authority to choose, “Well for your individual kid, what is the educational experience that’s going to be good for them?” Parents are closest to their children. So, they’re the ones who know, “What are the skills and habits that my kid needs for his success or for her success? My child has diverse strengths and needs. I am best positioned to see what those are.” And to identify the school or the schooling environment or the tools that are going to bring them the success that they need.

Jason Bedrick: Now, we briefly touched on the idea of price controls. And you have a voucher system and you say, “OK, the vouchers are worth $5,000.” Well, you’ve therefore created a price floor of $5,000. And in many cases, like in Louisiana, for example, when they say, “In private schools, if you take this, you have to take this as the full value of tuition.” Well, now you’ve also created a price ceiling. And so we know how that works as well. Economically, it means that you’re going to have shortages. With the ESA, there is no price floor and no price ceiling, because they can spend it in multiple places. And you argue that it also exerts downward pressure on price. Can you explain how that works?

Anna Egalite: Sure. So I think one of the biggest goals, or at least contributions that ESAs have the potential, and I don’t know that they will live up to this potential, but this is dreaming big if they do. One of the things that they could change is to help us actually identify the true cost of certain educational goods and services, because you said certain states have a voucher for $5,000. Where does that number come from? It’s a best estimate. It’s a best guess, but it’s based on all kinds of assumptions. When actually in a marketplace where parents are purchasing individual services and pair that information, you could think of like a Yelp service for reviewing, or programs submitting themselves for voluntary review or accreditation by outside bodies, you can start to see that in light of certain considerations, yes, this is worth X dollars.

In a way that the market would figure out that we haven’t been able to figure out today. So that’s, I think, one of the benefits. And the reason I pointed out in the article is not that overall cost savings should be the goal. And for some who come to the school choice literature, that is their goal. But I argue that that’s a way to better utilize the existing resources, which are always scarce and in demand, but to target them where they’re going to have the most impact for the kids who need them the most. So you’re promoting efficiency and also equity at the same time.

Jason Bedrick: So, we’ve discussed already the potential for ESAs to elevate low-income parents’ voices. But traditional school choice programs were also intended to directly empower low-income families. So how do ESAs do a better job of elevating the voices of low income families than their traditional counterparts?

Anna Egalite: Well, I think that they’re not for everybody, but if there are parents who have the inclination and the desire to be in the driver’s seat and to be in control, then I think that they have a lot to gain from this. Because they are able to make use of the financial clout that comes with being the decision maker and how these dollars will be spent in the market. And so it allows them to make more flexible choices for their students. This is huge for low-income families.

It might not sound like a big deal if you’re not used to thinking about having to go up against institutions or being limited, but it’s like the difference between when you receive a gift card, versus when you receive cash. Rather than being told, “You can take this gift card to best buy and hopefully they have what you want. And sorry, if you needed new shoes, they don’t sell those.” Where it’s the having the power of the cash is just so much more empowering for families and give them the respect in the marketplace from the various vendors who know, “Oh wow, they really do have the decision making authority here.”

Jason Bedrick: Is there anything that policymakers can do to improve equity when they’re designing an ESA program?

Anna Egalite: Oh, definitely. I mean, one of the big things is how they think about waving the value of the debit card. Should it be the same for everybody or should low-income students get more? I mean, that is extensively how the public school system is set up through Title I is to give greater disbursements, at least to intend to give graders disbursements to low income students and ESA could mirror that. So an ESA could have higher value amounts for students with the greatest needs, who are considered hard to serve. So students with disabilities and some of them do that. Like Florida’s Gardener Scholarship, they do vary the amount of funding depending on the student’s specific disability. That’s certainly one way to redirect attention to the students who need it the most.

Other ways that ESAs could promote equity is thinking about the list of approved expenses. And again, that’s a state by state list. That’s going to vary by context. But one thing that would be helpful would be to allow families to use some of the funds for transportation, because that’s something that comes up over and over again in the voucher context where families say, “We found a great school, we have the voucher, but I can’t get my students there because of my work schedule or other things.” Another thing to keep in mind that we observed in the voucher context in North Carolina was the issue of family eligibility. Because it’s a means tested program, your income has to fall under a certain number to qualify. But there’s no room for growth there. So if you receive a promotion, then you may be at risk of losing your scholarship. So you can scale those thresholds. And that allows families to seek out opportunities to improve their own economic conditions without immediately losing the scholarship or the ESA.

Jason Bedrick: Right. And so on that question of transportation, though, can you talk a little bit about some of the innovations in the area of transportation that you discuss in your article?

Anna Egalite: Yeah. It’s been is really interesting to learn more about. There are services that are analogous to Uber or Lyft, but they’re particularly designed to get kids to and from school or to an afterschool activity, for example. And they have extra safety precautions for the drivers. So fingerprinting, criminal background check, reference checks, in person interview. And then one of the companies that drivers wear a very bright orange t-shirt, and the driver and the child have a key word. So they have to share the secret code word to make sure that it’s the right person being picked up by somebody that’s trustworthy. And with the development in our cell phones, then from the parent’s perspective, they can track to see where the driver is. And if they’re ending up where exactly they were supposed to be. So there’s all of these safety considerations that can be added to existing services that we’re already familiar with, but to make them child appropriate.

Jason Bedrick: And what other sorts of factors should policymakers be thinking about when they’re designing an education savings account program, particularly around areas of, let’s say, administration and accountability?

Anna Egalite: Yeah. I mean, it’s unenviable in some ways, because so much is unknown. So they have to be written flexibly. Because yes, problems will arise as they roll out and as more people enroll in the program. And so you just want for the state to be nimble in how they… For example, if your legislation lists the approved expenses, that’s very narrowing because it might be that there’s a new innovation that is only rolled out a year later and suddenly it’s not listed in your legislation. So it’s not going to be an approved expense.

So things like that, being flexible about determining what is approved expenses, what’s not, who qualifies, who doesn’t. One of the things, a specific expense that I mentioned in the paper, is this idea of parents will probably need an advocate. So the idea of a school counselor or a college counselor, but for an ESA context. And that’s obviously a job that doesn’t exist today, but somebody who could help parents become aware of the list of services that would be in their area and help them choose among them. And so for the ESA, could it be spent on purchasing the services of a navigator, a person like that. Obviously, a career that doesn’t yet exist.

Jason Bedrick: It sort of exists. So I know that it doesn’t at any of the state departments of education or treasurer’s offices that are running these programs yet, but there are some nonprofits that are… So first of all, Step Up For Students runs the program in Florida. And so far as I know, they actually do have some people on hand to help folks navigate the program. Maybe not exactly in the way that you mean, navigating all of the different options, but certainly how to navigate the program itself. There’s also a group in Arizona called Love Your School that is trying to be that resource to families so that when ESA families have questions either about how the program works, or about the different options, they can go to that.

It’s also been interesting to me to see how communities form themselves. So for example, in Arizona, there was a Yahoo! group that formed back when the program was implemented in, what was it—2011, I believe. And at the time, it was only for families with students with special needs. They were able to create this Yahoo! group and grow it up to hundreds of families and share information with each other, not just about the program, but about the different ways that they were using the program. That has morphed into some Facebook groups that are for the families. And now that program has expanded, it’s not just students with special needs, but still about 60 percent of the students that are participating have special needs. And so these families are actually sort of crowd sourcing. They’re helping each other find access to different vendors or different programs or tools and whatnot. It’s very interesting to watch how this just sort of spontaneous order emerges.

Anna Egalite: Yeah, it sounds very organic.

Jason Bedrick: Yeah. What else should policymakers be thinking of when they’re designing an educational choice program like this? Do you have any other suggestions?

Anna Egalite: Well, I just think that it’s helpful. And this was a goal of the book and something I really appreciated about being invited to be a part of it, was the idea of humility. And policymakers are going to be very proud of the policies in the school choice realm that they’ve already passed, but to think about the flaws in the existing policies and how they can do better. And I think that’s what the goal in the entire volume here was, to say, “Failure is not wrong. It’s an opportunity to learn and grow.”

And so if we can look at the existing policies we have, it helps us to figure out how the next set of policies can alleviate the worries and the concerns and the hidden expenses and barriers that existed in what we already passed. So I think that’s sort of the overall message, is that the goal here is improving education more broadly, reconceptualizing it in many regards, putting students and families at the center of policy efforts, and looking at the work that has been done to date. In what ways has it been effective? And let’s be honest about it in what ways has it failed and be done better?

Jason Bedrick: Yeah. Listeners who want to read the full chapter and all the other chapters can find it in Failure Up Close: What Happens, Why It Happens, and What We Can Learn From It, edited by Jay Greene and Michael Q. McShane. Our guest today has been Anna Egalite, assistant professor in the department of educational leadership policy and human development in the College of Education at North Carolina State University. Anna, it’s been a pleasure having you.

Anna Egalite: Thanks, Jason. I really enjoyed it.

Jason Bedrick: Thank you. This has been another edition of EdChoice Chats. If you have any ideas for authors you’d like us to interview for the Big Ideas series, please send them to media@edchoice.org, and be sure to subscribe to our podcast, follow us on social media, @edchoice. And don’t forget to sign up for our emails on our website, edchoice.org. Thank you. We’ll catch you next time.

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