The Future of Education Funding
October 8, 2015
In 2011, Arizona became the first state to create K-12 education savings accounts, currently allowing the families of 1,311 students to decide how best to use their state education funding. Florida, Mississippi, Tennessee and Nevada have subsequently enacted similar K-12 education savings account programs (ESAs). More than 5,000 children are anticipated to use education savings accounts during the 2015-16 school year. ESAs give parents the opportunity to create a challenging, customized education for their children.
A review of the inputs and outputs of the K-12 education system in the United States underscores the need to reconsider the learning options available to students and improve educational opportunities for children of all backgrounds.
- The typical public school in the United States spends approximately $12,000 per year for each child enrolled.
- A child who is enrolled in a public school from kindergarten through the end of high school will have as much as $150,000 spent on primary and secondary education.
- Yet various national measures of student outcomes suggests that many students are not receiving a high-quality education during their K-12 years, despite the significant resources devoted to their schooling.
Policymakers should improve families' ability to save and pay for their children's education services by expanding the allowable uses of federal 529 savings accounts. These accounts already let families save their own money tax-free for educational expenses -- but only postsecondary expenses.
The next step for federal policymakers is to augment 529 accounts into lifelong learning education savings accounts. The additional uses should include preschool and K-12 education expenses like tutoring and online classes, as well as post-college expenses such as job training or other educational programs. This would give families and beneficiaries greater flexibility to purchase needed services throughout their lives to succeed in elementary and secondary school or even improve skills after college.
Source: Dan Lips et al., "Education Savings Accounts: The Next Frontier in Education," Goldwater Institute, August 31, 2015.
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