NCPA - National Center for Policy Analysis

Education Savings Accounts for Every American Family

October 12, 2012

An education savings account gives parents the opportunity to use their children's education funding to choose among public and private schools, online education programs, certified private tutors, community colleges and even universities, says Matthew Ladner, the senior adviser of policy and research for the Foundation for Excellence in Education.

Despite increasing the funding for public schools, American students face high dropout rates and wide racial achievement gaps.

  • Twelfth grade black and Hispanic students score at middle school levels of achievement.
  • However, white American 15-year-old students score at internationally competitive levels.
  • Furthermore, despite producing the lowest test scores in the Organization for Economic Cooperation and Development, Mexico outperforms American schools that serve black and Hispanic students on points produced on a per-dollar basis.

These poor education numbers are the result of years of problems that have been swept under the rug by educators and policymakers. A poorly educated population also results in economic stagnation. Poor education has implications for the broader economy as students that leave school without proper literacy and math skills have a difficult time finding a productive job that can help spur economic growth. 

Arizona lawmakers sought a solution to the education crisis by establishing an Empowerment Scholarship Account.

  • This account essentially allows parents to remove their children from their district school.
  • The state deposits 90 percent of what it would have spent on the child in public schools in the account.
  • The parent is then allowed to use the account to purchase textbooks, pay for tuition at a private school, use it for fees on college exams, tuition at post-secondary institutions, etc.

Arizona has shown remarkable improvement and is a beacon of hope for the rest of the country's education system. The fact that students have a choice in which school they attend creates a competitive atmosphere for schools to provide the best service at the most affordable rate.

Furthermore, there is financial accountability to ensure that parents are using the funds for their students appropriately. A shift to this form of education funding would help eliminate racial gaps and falling education standards by allowing students in low-income communities to go to better schools.

Source: Matthew Ladner, "The Way of the Future Education Savings Accounts for Every American Family," Friedman Foundation for Educational Choice, October 2012.


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