Vouchers, ESAs, tax-credits: Is school choice the right choice?
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May 12, 2025
School choice programs have expanded across the country, but are they working? Straight Arrow News takes a look in this two-part series.
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More states are expanding school choice policies, including Alabama
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Education savings accounts. The significant expansion to the school choice voucher program
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The plan to give every student in Ohio the option to go to private school
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Often called private school vouchers. It's one of the most popular yet divisive debates in education today
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School choice. From vouchers to tax credits. What do they mean and who really benefits
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On May 3rd, Texas joined the growing list of states switching to school choice
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launching its own program into law. School choice! Gone are the days that families are limited to only the school assigned by
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government. The day has arrived that empowers parents to choose the school that is best for
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their child. The Texas bill creates a private school voucher system that allocates $1 billion
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in public education funding the next two years. The program allows Texas families to use public taxpayer dollars
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to pay for private school, homeschooling, or virtual education. Families can receive up to $10,000 per child annually
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For children with disabilities, it's up to $32,000. Before Texas, Tennessee passed its Universal School Choice Program in February
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a little less than a year before. Alabama passed its Universal School Choice Program, the CHOOSE Act
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Our plan will not only work for Alabama families, it will work for our state and will be effective and sustainable for generations to come
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Advocates say demand for school choice has never been higher as parents grow dissatisfied with their children's education, especially after COVID-19
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However, critics warn these initiatives can shift critical funding away from public schools to private ones
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For students who are in public schools who are leaving to take up these vouchers, it can have pretty severe effects on the public schools
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Public schools rely on enrollment to determine their funding. When a policy shock happens, like voucher programs, this essentially leads to a shock in potential enrollment decline
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That means they're getting a shock in their funding that they did not anticipate
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What that means essentially for the public school is now they have fewer funds available to educate the students that remain in public school
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Hillary Webbing is a economist with the Economic Policy Institute, which receives some funding from teacher unions
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She says changing funding has lasting effects. Webbing tells us schools count on the funds for fixed costs like electricity, heating and food
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As a result, they have less money to spend on costs like salaries
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But not all school choice programs are created equally. School voucher programs are state-run
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systems that allow parents to use public funding for private school tuition. These programs usually
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come in the form of a coupon of credit to parents In states with tax credit scholarship programs companies or individuals are encouraged to donate to a scholarship organization Those organizations then give money to eligible students to use toward tuition at a private school And then there are states with education
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savings accounts, or ESAs. They set aside funds and individual accounts for participating students
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Parents can withdraw that money to spend on approved educational expenses. These funds can
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be used for private school tuition or other educational purposes like tutoring, online
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courses, or transportation. These programs originally targeted students with disabilities, but many states have started expanding them to allow most families to participate. Families on
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these programs will not get the entire amount the state spends on a student on average. Most programs
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give families around 60 to 90 percent of what the state spends on a student. What's left, typically
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the federal and local funding, remain with the public school system or get retained by the state
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Now, not every state runs its program the same way. Take Florida, for example. It offers a
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universal ESA program. Florida gives each K-12 student more than $8,000 for private school
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homeschool materials, online courses, tutoring, and more. Indiana, on the other hand, uses a
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voucher system. It gives most K-12 students in the state up to 90% of what their public school
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would have spent on them, about $6,300 on average, according to EdChoice. The public school system
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and the state get to keep what's left of the funding. A major difference. Indiana has limits
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on who qualifies. Florida has no limits. In 2022, Arizona lawmakers passed a school ESA bill
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ProPublica reports the plan originally was set to cost the state just under $65 million
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Instead, it ballooned to more than $320 million, causing a state budget crisis
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That claim, which originated from a teacher union, is often refuted by pointing to school choice programs' effects on education budgets
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Despite the ESA program being bigger than expected, Arizona ended fiscal year 2024 with educational spending at more than $4 million under projections
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Nathan Sanders, a policy and advocacy director for EdChoice, an organization that backs voucher and ESA efforts, says parents use these programs to better exercise their options for their children's education
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Okay, well, let's give parents options. And that's what these educational choice programs do is they give parents the opportunity to
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have those options and say, I'm not satisfied with this school. I'm going to go and homeschool my kid and use these resources for homeschooling, or
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I'm going to go use these resources for a micro school or private school down the road
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I think we always try to remind people that that's where the focus is
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It's about the families and it's about what's best for them. And I think we put a lot of emphasis on trusting parents and letting parents make the decisions
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for their kids. While many lawmakers voters and parents groups support these types of programs there are groups pushing back among them the National Education Association The NEA is the largest labor union in the U that represents public school teachers and faculty The NEA which backs
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Webbing's EPI, believes these school choice programs could put too much financial pressure
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on public schools. Webbing notes when families use vouchers or ESAs, that means enrollment at
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their public schools drop, which leads to less funding since public schools funding allocations
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are based on the number of students enrolled. What that means for the public school essentially
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is they're left with less funding to provide the same quality of education
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for students that didn't make the choice to take up the voucher program
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There's inherently this cost into public schools just by being kind of the collateral damage
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of these voucher programs. A 2024 report by the American Federation of Teachers
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a teachers union affiliated with the AFL-CIO found that most states have devoted a smaller share of their economies to public schools than
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they did in 2006. The same report also found that 60 percent of students in chronically
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underfunded districts live in only 10 states. Nearly all of those states have opted for some
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sort of school choice program. However, the total dollar amount spent on public education has
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increased during that same time. A report by the Education Data Initiative also shows the U.S. is
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spending more per student than most other developed nations. School choice opponents say
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some schools are forced to cut student services due to funding decreases from these programs
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I've seen services like guidance counselors, sharing nurses among a few schools, reducing the
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amount of pupil support services or instructional support, particularly students that might have some
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learning disabilities or higher needs. All of those get cut by a bigger percentage point than
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And they should because schools now have to pay on their fixed costs and they have fewer funds overall because of this decline in enrollment due to a policy shock that they couldn't plan for
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School choice advocates counter that claim, saying the cost of these programs is a small fraction of a state's total education budget
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Sanders says most programs only use about one percent of the state's total K-12 budget, though some states spend more
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Educational choice programs, as it relates to education funding as a whole for every state on average, education choice programs were only about 1% of education funding
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So you're talking like, you know, you hear all these claims and these worries that this ESA funding will bankrupt states and will bankrupt public school system
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And that can't be further from the truth. I mean, these programs are literally pennies on the dollar for what education funding is usually in different states
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Straight Arrow News research shows most states on average use about 1.74% of their total K-12 budget on school choice programs
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Florida spends more than 10 of its K funding on private school choice more than any other state Arizona came in second with just over 8 However research from EPI puts Florida school choice budget allocation much higher at more than 25 percent And some of
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these programs become more expensive than they were initially estimated to be. There's also
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concern private schools in states with vouchers and ESAs will raise costs. For example, a study
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from Princeton University found when Iowa passed its ESA plan in 2023, private schools raised
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tuition by as much as 25 percent. When the state limited eligibility to students in certain grades
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private schools raised rates again, but up to 16 percent. Meanwhile, over the same period
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private schools left rates tuition for pre-K and kindergarten who weren't eligible for the program
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untouched. Oftentimes we've seen that these voucher programs, the schools that will take
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vouchers for students will raise their tuition prices as the voucher funding goes in, making it
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still unattainable for low-income students to even take these vouchers. However, Sanders claims
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private schools will sometimes operate at a loss or cut parts of their budget to teach at a lower
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cost. He said as more families participate in school choice programs, the market will change
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to allow more competitive private school costs. The more families you have participating in the education market
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market conditions will eventually work that out, right? After a year or two, the program has passed, things will be, you know
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new schools will start to sign up for the program, new families will start to sign up for the program
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but ultimately you'll see a competitive market, and what that also means is competitive tuition and competitive education costs
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Sanders and Ed Choice said the ESA that Iowa provides to students
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still covers the average cost of private school. So even with the tuition hike, the program still covered the average cost of private school tuition
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Still, critics say many of these programs don't cover the full cost of private school tuition
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And even if they do, families may have extra costs associated with private schooling
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According to data S.A.N. compiled from EdChoice state websites and the Education Data Initiative
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only four states, Arkansas, Iowa, Oklahoma and Wisconsin, had voucher averages that paid the full cost of the average private school tuition in the state
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Sanders says even though some states don't cover the full amount of private school
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families are still happy to sacrifice for their kids' education. Let's say the ESA is $6,000, which is probably a good average for most states that are passing these programs
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You know, a lot of parents are able to still sacrifice, because the parents have been sacrificing before
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They're able to sacrifice maybe another, you know, a little bit of that and have this ESA to cover the rest
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And that's still a huge relief to families. So even if an ESA amount seems a little bit smaller
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that doesn't discount the ability for families to sacrifice and still send their kids to a better school
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One thing many advocates bring up is how school choice improves students' grades
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We'll take a look at the impact the programs have made so far, plus reactions from parents in Part 2
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School choice, is it the right choice
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