Research & Commentary: Time Is Right for Education Savings Accounts in Pennsylvania

Published March 15, 2018

A proposal in Pennsylvania would establish an education savings account (ESA) program for students attending the lowest-performing 15 percent of public schools in the Keystone State.

With an ESA, state education funds allocated for a child are placed in a parent-controlled savings account. In the proposed program in Pennsylvania, parents would then be able to use a state-provided, restricted-use debit card to access the funds to pay for the resources chosen for their child’s unique educational program. The ESAs could be used to pay for tuition and fees at private and parochial schools, as well as textbooks, tutoring services, and educational therapies. They could also be used to cover the fees required to take national standardized achievement tests, such as the SAT and ACT.

The maximum scholarship amount for an eligible student would be $5,700, which is the average per-pupil funding provided by the commonwealth. All leftover funds could be rolled over for use in the following school year and used to pay tuition costs for higher education. For special-needs students, the ESA amount will be based “on the category of disability by which the resident school district is required to categorize the student.”

“Too many Pennsylvania children are relegated to persistently underperforming schools based on nothing more than a home address,” wrote three of the bill’s sponsors in a memorandum made public at the time of the bill’s introduction. “Pennsylvania’s existing school choice programs—charter schools and scholarship tax credits—are vital lifelines for many of these children. But demand for these options greatly outpaces supply, as evidenced by heartbreaking stories of charter lotteries and scholarship organizations forced to turn away thousands of deserving applicants every year. Chronic low performance and abysmal graduation rates fail to prepare our students for college or careers. Clearly, there is an urgency to serve families who do not have the means or the good fortune to enroll in a high-quality school.”

In January 2018, a survey published by the American Federation for Children, which was conducted by Democratic polling firm Beck Research, questioned 1,100 likely voters in the 2018 midterm elections. Seventy-five percent of respondents said they are in favor of ESAs, including 73 percent of blacks, 87 percent of Hispanics, 77 percent of Millennials, 78 percent of independent voters, and 70 percent of Democrats.

ESAs are broadly popular because they allow parents to exercise their fundamental right to direct the education of their children. Not only are school choice programs like ESAs popular, they are also effective. In May 2016, EdChoice released a report in which it examines 100 empirical studies of school choice programs. Eighteen of these studies used random assignment to measure outcomes, referred to in academia as the “gold standard.” The overwhelming majority of the available empirical evidence makes it clear educational choice offers families improved access to high-quality schools that meet their widely diverse needs and desires, and it does so at a lower cost while simultaneously benefitting public school students and taxpayers, decreasing segregation, and improving civic values and practices.

Pennsylvania already has two tax-credit scholarship programs, the Educational Improvement Tax Credit Program and the smaller Opportunity Scholarship Tax Credit Program, so establishing this limited ESA program would not be out of step for the Keystone State. ESA programs are not a silver-bullet solution, but they certainly allow families much greater opportunities to meet each child’s particular education needs. The goal of public education in Pennsylvania 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.

The following documents provide more information about ESAs and school choice.

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.

Ten State Solutions to Emerging Issues
This Heartland Institute booklet explores solutions to the top public policy issues facing the states in 2018 and beyond in the areas of budget and taxes, education, energy and environment, health care, and constitutional reform. The solutions identified are proven reform ideas that have garnered significant support among the states and with legislators.

2017 Schooling in America: Public Opinion on K–12 Education, Parent Experiences, School Choice, and the Role of the Federal Government
This annual EdChoice survey, 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.

The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
This Policy Analysis from the Cato Institute examined the effect that increased access to private schooling has on international student test scores in 52 countries around the world, finding that a 1 percentage point increase in the private share of total primary schooling enrollment would lead to moderate increases in student math, reading, and science achievement within nations.

Personalizing Education: How Florida Families Use Education Savings Accounts
This report by Jason Bedrick of EdChoice and Lindsey Burke of The Heritage Foundation examines how parents in Florida used their education savings account funds during the first two school years of the Gardiner Scholarship Program, which is now utilized by more than 10,000 students with special needs. Bedrick and Burke found more than 42 percent of families used their ESA to customize their child’s education in 2015–16, and 55 percent of these customizers did so without using a brick-and-mortar private school.

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.

Recalibrating Accountability: Education Savings Accounts as Vehicles of Choice and Innovation
This Special Report from The Heritage Foundation and the Texas Public Policy Foundation explores how education savings accounts expand educational opportunities and hold education providers directly accountable to parents. The report also identifies several common types of regulations that can undermine the effectiveness of the program and how they can be avoided.


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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