Wednesday, February 16, 2005

School Vouchers - A Step Toward Privatization of Education?

Your textbook has a brief discussion about school vouchers and, on Assignment 1 for the ECN 201 class and Homework 3 for the ECN 200 class, I have asked a question concerning school vouchers. I used this question in another class in a previous semester and many people had trouble with it either because they did not understand what a voucher was or, they were aware of school vouchers and were opposed to them. In both cases students focused on perceived negative effects of the vouchers on children's education and and answered accordingly. Their answers were wrong because they failed to read the question and answer what was being asked. The question is not about the educational effects of a voucher program (which is how most people answered it) but, rather, it is about who wins and who loses FINANCIALLY (hint, it isn't the students).

A voucher is a financial instrument, like a check, which can be exchanged by the recipient for a good or a service. Unlike a check which can be exchanged for cash and the cash used to purchase anything, a voucher can only be exchanged for a good or service stipulated by the issuer of the voucher. For instance, when an airline has to cancel a flight due to weather it will often direct stranded passengers to a nearby hotel and give them vouchers to pay for their rooms and meals at that hotel while waiting for the weather to clear and flights to resume.

The concept of school vouchers for K-12 education was first proposed by economist Milton Friedman about 30 years ago. As he explained in his popular TV series, declining educational achievement was due to the fact that schools, being public monopolies, had no incentive to use resources efficiently or to provide quality service. Public schools are supported by tax dollars which means that their funding is based upon political considerations and not by consumers. Further, the law not only requires that parents send their children to school but dictates which school to send them. With funds and students guaranteed, there is no incentive for schools to complete for students like private businesses compete for customers. Friedman's solution was to propose that instead of the government paying schools directly according to the number of students enrolled in the district, they instead divide the amount they would pay a district by the number of students to calculate the amount per student and give parents a voucher for that amount for each of their school-age children. Parents could then enroll their children in any school and pay for it with the voucher.

Contrary to what some critics of vouchers portray, vouchers can be used at any school, public or private. If parents do not like the school their child is assigned to under the present system, they can, under a voucher system, move the child to another school. This might be another public school in the same district, it might be another public school in another district or it might be a private school. Under this system, schools that are underperforming lose students and funding while schools that are providing a good education gain students and funding. Poorly run schools, both public and private, would go broke and cease to exist. Schools and their staffs (teachers, administrators, etc.) would be accountable to parents for their performance and would see their funding and jobs disappear if the quality of education delivered did not meet the expectations of parents (consumers). Special interest groups would also lose as projects and programs they wanted taught would disappear if parents were not interested in these programs (for example if parents felt phonics was the best way to teach children to read then schools that used phonics to teach reading would gain students (and the money they bring to the school) while schools that used other methods to teach reading would lose students and this would result in a sharp decline in the use of other methods.

School vouchers are one proposal to reform education in the U.S. They are not the answer to the problems of education in the U.S. but are merely one approach toward reform. (NOTE: Arizona is one of many states that does not have a voucher system). There are many critics of vouchers both from a free market perspective and from the perspective of defending the status quo. But what vouchers have accomplished is to move the debate over education from one of how much should we increase funding for public education and what reforms can we make to improve public education? to is public education the answer?. A half a century ago public education was a political sacred cow whose position in society was guaranteed. Today it is still the major provider of K-12 education but it is losing market share and is being hurt by competition on many sides for students and funding. This competition includes the growing use of unsubsidized (i.e., parents pay the full cost of private education with no help from the government) private schools (secular, religious and home schooling); programs that subsidize private schooling such as vouchers (when they can and are used to pay for private schools); tax programs like Arizona's tuition tax credit program (where taxpayers can contribute to scholarship programs that pay tuition for children (not their own) at private schools and receive a credit for this on their Arizona state income tax – i.e., if they donate $100 and their tax due is $900 they can subtract the $100 donation from the tax due and pay only $800 in state income tax – the state makes up for the loss of $100 in taxes by reducing spending for public education by $100); charter schools (Arizona is a leader in this area) which are publicly funded schools that can be operated by for profit, non-profit or public entities, have greater flexibility (i.e., fewer regulations) in designing and delivering education and are funded out of the same pool of funds as public schools; new accountability standards such as the federal No Child Left Behind Law and the state's AIMS testing program which are putting pressure on pubic schools to improve results noticeably or face additional sanctions and scrutiny by federal and state officials who control funding; finally, there is the growing reluctance by taxpayers to keep increasing funding for public schools as evidenced by school bond elections in which the proposed bonds are usually voted down and increasing voter support for legislative candidates who are beginning to challenge proposed increases in school funding.

Milton Friedman's voucher proposal, while bitterly opposed by many and not widely used, has succeeded in igniting a debate and unleashing forces which are transforming the K-12 education system in the U.S. At this point it is hard to predict what the end result will be. However, one can safely say that the free market dream of a totally private system in which parents have full control over their child's education and pay the full cost (possibly with private help) and no government funding or control of any kind will probably not be realized. However, it is also safe to say that when this process has played out, whatever role government will play in the new system will be greatly reduced (in terms of both funding and regulations) and the resulting public school part of the system will not be anything like the public education system your parents knew.

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