Policy Documents

Research & Commentary: School Funding that Follows the Child

January 31, 2012

The idea of education funding following the child has several names, such as weighted student funding, backpack funding, fair-student funding, student-based budgeting, and results-based budgeting. But the meaning is the same: Education dollars attach to individual students instead of staff positions or programs. The funding is portable, and the amounts may be weighted based on students’ individual needs such as non-native English speaker, family poverty, special needs, etc.

Dominant among supporters of the status quo, program-based budgeting are those who benefit from current funding arrangements, including teachers and bus driver unions and public school administrators. They claim student-based budgeting would disrupt systems and programs and even say these failed systems need much higher funding to achieve success.

School choice advocates encourage attaching education monies to individual children because it focuses education on the child, stymies special interests, and increases the likelihood education providers will have to compete and excel to earn money instead of receiving it automatically. Choice saves states and taxpayers money because families have strong incentives to use the money wisely, compare options, and demand more for less. It also allows for flexible, customized education if the child’s family is allowed to divide the money among several different providers and programs according to the child’s interests and needs.

Funding following the child has been implemented in countries such as the Netherlands and Sweden and U.S. locations including Baltimore, Cincinnati, Denver, Hawaii, Houston, and San Francisco. Reformers say disrupting the public education system is a long-term good because the current system is widely recognized as poor.

The following documents offer more information about funding individual students.

 

Suit Shows What’s Wrong with California Schools
The way to achieve an excellent, equitable, and affordable system of education in California is not to capitulate to lawsuits demanding massive funding increases to support bureaucracy, write Ben Boychuk and Bruno Behrend in the San Francisco Chronicle, but to fund all children equally by letting money follow the child. The education establishment views the situation as a bureaucracy preservation problem, considering students only as a pretext for increasing spending. Funding the child transforms this chaos into a system of spontaneous order, they write.

Models for Ohio School Funding: Comparing the Evidence-Based Approach with Weighted Student Funding
This report for the Knowledge Works Foundation compares evidence-based and weighted student funding models. The evidence-based model aims to determine what educational approaches should be funded and price those approaches. Weighted student funding sets out how money should be allocated first. The report favors weighted student funding, arguing it offers better equity, autonomy, and portability.

Students Without Borders: Funding Online Education in Virginia
Because Virginia funds online schools using an outdated model based on funding bricks and mortar schools closest to student homes, online education and education choice are unlikely to expand in the Commonwealth without change, writes Christian Braunlich of the Thomas Jefferson Institute. He proposes funding “students without borders” based on statewide spending averages, saying policymakers must recognize old funding models are ineffective, raise costs, and hinder Virginia’s students from learning in a tech-enabled world.

School Finance in the Digital-Learning Era
The policy area most needing reform if digital learning is to succeed is funding, writes Paul Hill for the Fordham Institute. “Our system doesn’t fund schools, and certainly doesn’t fund students,” he says. By consolidating education funding into a “backpack” model and creating education debit cards parents can use, the system Hill outlines would ensure families can choose from a diverse range of robust schooling options.

A Custom Education for Every Child: The Promise of Online Learning and Education Savings Accounts
The growth of online learning changes the school choice discussion from choosing a school to choosing individual services that specifically meet a student’s needs, notes Dan Lips in a policy brief for the Goldwater Institute. This requires changing school funding models to attach money to the individual child, which is working particularly well in Arizona’s new education savings accounts for disabled children.

Education Savings Accounts: A Promising Way Forward on School Choice
Education savings accounts redirect a portion of state education funds into a restricted account, similar to the popular health savings accounts, from which parents can pay for private-school tuition and a variety of other education options such as tutoring and college savings, writes Lindsey Burke in a Heritage Foundation report. ESAs would provide broad school choice options for families, save states money, allow greater education customization, and promote education excellence through competition.

Weighted Student Funding in the Netherlands: A Model for the U.S.?
The Netherlands has a long history of employing weighted student funding, a model that could be customized for the United States, write Helen Ladd and Edward Fiske in a Duke University working paper. The lessons the Dutch have learned from this decades-long practice could guide U.S. policymakers seeking to implement such policies, particularly if concerned about parental choice and disadvantaged students.

The Student-Centered Funding Act
This model legislation from the American Legislative Exchange Council, the Student-Centered Funding Act, would create a finance model based on a weighted student formula in which education money is assigned to children instead of particular schools. “Integral to meaningful accountability,” it says, “is: (1) empowering principals to act as leaders of their schools over these matters; and (2) empowering parents to pick the public schools they believe best meet their children’s unique, individual needs.”

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the School Reform News Web site at http://news.heartland.org/education, The Heartland Institute’s Web site at http://www.heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org.

If you have any questions about this issue or The Heartland Institute, contact Heartland education policy research fellow Joy Pullmann, at 312/377-4000 or jpullmann@heartland.org.