Research & Commentary: Study Shows Education Savings Account Program Could Save Empire State Up to $301 Million

Published December 1, 2021

A new report released in October 2021 by the Manhattan Institute for Policy Research details how adopting an education savings account (ESA) program in New York could save the Empire State over $300 million annually, depending on the monetary size of the ESA.

According to the report, if just one percent of New York public school students took advantage of an ESA program funded at $6,500 per-ESA (90 percent of the state’s marginal average per-pupil cost), savings of between $158-$301 million would accrue. This works out to between $5,900-$11,200 in savings per each ESA student.

With one percent of New York public school students taking advantage of an ESA program funded at 100 percent of the state’s marginal average per-pupil cost, $9,900 per-ESA, savings of between $94-$236 million would accrue, or between $3,500-$8,800 in savings per each ESA student.

“The fiscal effects will depend on program design, which will reflect desired goals and values for the state’s K–12 education system,” the report concludes. “A program with broader eligibility and higher ESA value will promote greater educational opportunity and invite more innovation, while a program with limited eligibility and lower ESA value will likely generate greater short-run savings for the state. Furthermore, because an ESA would generate fiscal benefits for taxpayers, students who remain in public schools may end up with more resources on a per-pupil basis.”

Copious empirical research on school choice programs such as education savings accounts find they offer families improved access to high-quality schools that meet their children’s unique needs and circumstances, and that these programs improve academic performance and attainment and deliver a quality education at lower cost than traditional public schools. Additionally, these programs benefit public school students and taxpayers by increasing competition, decreasing segregation, and improving civic values and practices.

Research also shows students at private schools are 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 improve the mental health of participating students.

It is probably for these reasons, and also because teacher unions have repeatedly played politics with school closings during the COVID-19 pandemic in direct conflict with students’ best interests, that ESAs are more popular with parents than ever before. Polling by EdChoice released in December 2020 found 81 percent support for ESAs, for example, among the general public and 86 percent among current school parents, the highest level of support the program has received in the organization’s eight years of polling on the issue. This represents a 4-percentage point increase over 2019. These findings are mirrored in the American Federation for Children’s seventh-annual National School Choice Poll, released in January 2021, which saw 78 percent support for ESA programs. 

Enacting an ESA program would be of monumental benefit to New York children. The goal of public education in the Empire State today and in the years to come should be to allow all parents to choose which schools their children attend, require every school to compete for every student who walks through its doors, and make sure every child has the opportunity to attend a quality school. There has not been a time when providing these opportunities has been more urgent and more needed than right now. Legislators should recognize that and allow families as many options as possible to get their children the education they need and deserve.

The following documents provide more information about education savings accounts and education choice.

Education Savings Accounts: How ESAs Can Promote Educational Freedom for New York Families and Improve State and Local Finances
This report from the Manhattan Institute for Policy Research details how adopting an education savings account (ESA) program in New York could save the Empire State over $300 million annually, depending on the monetary size of the ESA.

The 123s of School Choice (2020 Edition)
This report from EdChoice is an in-depth review of the available research on private school choice programs in America. Areas of study include: private school choice program participant test scores, program participant attainment, parent satisfaction, public school students’ test scores, civic values and practices, racial/ethnic integration and fiscal effects.

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.

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.

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.

Child Safety Accounts: Protecting Our Children through Parental Freedom
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.


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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