Research & Commentary: Low-Income Tennessee Children Deserve Education Savings Accounts

Published March 29, 2019

A proposal in the Tennessee House of Representatives would establish an education savings account (ESA) program for low-income students zoned to school districts with at least three schools in the lowest-performing 10 percent of the state’s public schools.

With an ESA, state education funds allocated for a child are placed in a parent-controlled savings account. Parents are able to use a state-provided, restricted-use debit card to access education funds to pay for resources for their child’s unique educational program. Under the House’s proposed program, ESAs could be used to pay for tuition and fees at private and parochial schools, textbooks and curriculum materials, online learning programs, tutoring services, transportation costs, computer hardware, and educational therapies. They could also be used to cover fees required to take national standardized achievement tests, such as the SAT or ACT.

The program would begin no later than the 2021–22 school year with an enrollment cap of 5,000 students and each ESA worth $7,300. This cap would increase annually by 2,500 students until the ultimate cap of 15,000 students is reached. The total budget for the program would be $125 million. Leftover funds could be carried over to the next school year and any remaining funds left after the student graduates high school could be used toward their postsecondary education.

A January 2019 report from the Beacon Center found a statewide, universal ESA program could provide the Volunteer State $4.26 billion in economic benefits through 2038 due to increasing high school graduation rates and a decrease in criminal activity. The report conservatively projects adoption of a universal ESA would increase the number of high school graduates by 13,480 through 2038 and add $2.9 billion in economic benefits for these students, including a $683 million increase in personal income, over the course of their lifetimes due to the higher earning potential that comes with having a high school diploma. Furthermore, the report estimates the ESA program will help reduce the number of felons in Tennessee by more than 15,000 and the number of misdemeanants by more than 21,000 through 2038, which would produce a $685 million reduction in social costs.

“These numbers represent expected additional dollars in the pockets of Tennesseans as well as additional taxpayer revenue for the state itself that could be used for other meaningful reforms,” the report notes. “But even more importantly, the numbers serve as stand-ins for the meaningful improvements to quality of life brought about by a better education.”

Copious other empirical research on ESAs and other school choice programs finds these programs offer families improved access to high-quality schools that meet their children’s unique needs and circumstances. Moreover, these programs improve access to schools that deliver quality education inexpensively. Additionally, these programs benefit public school students and taxpayers by increasing competition, decreasing segregation, and improving civic values and practices. 

Students at private schools are also less likely than their public school peers to experience problems such as alcohol abuse, bullying, drug use, fighting, gang activity, racial tension, theft, vandalism, and weapon-based threats. There is also a strong causal link suggesting private school choice programs such as ESAs improve the mental health of participating students.

It is probably for these reasons that ESAs are more popular with parents than ever before. The results of EdChoice’s sixth annual Schooling in America survey, released in December 2018, found 74 percent of respondents favor ESAs, up 3 percentage points from 2017. According to the survey, support for ESAs is 76 percent among millennials, 72 percent for those with incomes less than $40,000 a year, 79 percent for blacks, 70 percent for Hispanics, 72 percent among self-identified Democrats, and 77 percent among independents.

In the Volunteer State, an American Federation for Children survey of 625 registered Tennessee voters conducted in February 2019 found 78 percent support for ESAs, including 75 percent support from independents and 68 percent from Democrats. Support for ESAs is also high and fairly uniform by region, as 79 percent from East Tennessee, 78 percent from Middle Tennessee, and 75 percent from West Tennessee support ESAs, respectively.  

The school a child attends should not be determined solely by his or her ZIP code. However, this is currently the case for most Tennessee children. The goal of public education in the Volunteer State should be to enable all parents, no matter their income level, to choose which schools their children attend. Public schools should not hold a monopoly on education. By implementing a universal ESA program, we can make sure every child has the opportunity to attend a quality school.

The following documents provide more information on ESAs and parental choice in education.

Counting Dollars and Cents: The Economic Impact of a Statewide Education Savings Account Program in Tennessee
This report from the Beacon Center argues that giving families at all income levels true education choice leads to better education outcomes, as well as higher financial, economic and societal benefits. For Tennessee, a universal ESA program could lead to $.26 billion in economic benefits through 2038.

Education Savings Accounts: The Future of School Choice Has Arrived
In this Heartland Policy Brief, Policy Analyst Tim Benson discusses how universal ESA programs offer the most comprehensive range of educational choices to parents; describes the six ESA programs currently in operation; and reviews possible state-level constitutional challenges to ESA programs.

A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
This paper by EdChoice details how a vast body of research shows educational choice programs improve academic outcomes for students and schools, saves taxpayers money, reduces segregation in schools, and improves students’ civic values. This edition brings together a total of 100 empirical studies examining these essential questions in one comprehensive report.

2018 Schooling in America Survey: Public Opinion on K–12 Education, Parent and Teacher Experiences, Accountability, and School Choice
This annual survey from EdChoice, conducted in partnership with Braun Research, Inc., measures public opinion and awareness on a range of K–12 education topics, including parents’ schooling preferences, educational choice policies, and the federal government’s role in education. The survey also records response levels, differences, and intensities for citizens located across the country and in a variety of demographic groups.

Protecting Students with Child Safety Accounts
In this Heartland Policy Brief, Vicki Alger, senior fellow at the Independent Women’s Forum and research fellow at the Independent Institute, and Heartland Policy Analyst Tim Benson detail the prevalence of bullying, harassment, and assault taking place in America’s public schools and the difficulties for parents in having their child moved from a school that is unsafe for them. Alger and Benson propose a Child Safety Account program, which would allow parents to immediately have their child moved to a safe school – private, parochial, or pub­lic – as soon as parents feel the public school their child is currently attending is too dangerous to their child’s physical or emotion­al health.

The Effects of School Choice on Mental Health
This study from Corey DeAngelis at the Cato Institute and Angela K. Dills of Western Carolina University empirically examines the relationship between school choice and mental health. It finds that states adopting broad-based voucher programs and charter schools witness declines in adolescent suicides and suggests that private schooling reduces the number of times individuals are seen for mental health issues.

Competition: For the Children
This study from the Texas Public Policy Foundation claims universal school choice results in higher test scores for students remaining in traditional public schools and improved high school graduation rates.

The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
This Policy Analysis from the Cato Institute examines the effect increased access to private schooling has had on international student test scores in 52 countries. The Cato researchers found that a 1 percentage point increase in the share of private school enrollment would lead to moderate increases in students’ math, reading, and science achievement.

Fiscal Effects of School Vouchers: Examining the Savings and Costs of America’s Private School Voucher Programs
In this EdChoice study, Director of Fiscal Policy and Analysis Martin F. Lueken examined the fiscal impact of voucher programs across America—from their inception through fiscal year 2015—to determine whether they generated costs or savings for state and local taxpayers. Lueken found these programs generated cumulative net savings to state and local budgets of $3.2 billion. This represents a $3,400 savings per voucher recipient.


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 subject, visit School Reform News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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