NCPA - National Center for Policy Analysis

Private Schools: Playing Catch-up

October 13, 2015

The recent past has seen tremendous growth in the number of states creating voucher, tuition tax credit, and Education Savings Account programs. More and more students are using state support to help defray the cost of a private education.

But these programs are starting to run into a constraint: space. If we want choice programs to truly transform the educational landscape across the country, they have to be able to spur high-quality schools to scale up and create new seats for students, and they have to be able to spark the creation of new high-quality schools.

From bond financing to venture capital investments, private school choice programs and the institutions and organizations that support them could do a much better job deferring the capital, infrastructure, and other fixed costs of participating private schools.

  • In 2014, the Friedman Foundation released a study of Indiana private schools that found about 41,000 private school seats available to voucher students across the state.
  • In the 2015-16 school year, more than 30,000 students will participate in the program and, if trends continue, will overwhelm the supply of private school seats in the very near future.

Unless new schools can open, the sector risks quickly hitting a point of saturation with no possibility of market expansion. School choice will be nice for the handful of kids that fill empty seats, but it will not drive change anywhere near to the effect that its proponents hoped. Put plainly, if supporters hope to see private school enrollment numbers reach the level of charter school enrollment numbers, they are going to have to get serious about covering the costs of building new schools.

Source: Michael Q. McShane, "Funding Growth, Expanding Opportunity: Novel funding mechanisms for school choice," American Enterprise Institute, October 5, 2015.

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