NCPA - National Center for Policy Analysis


March 6, 2006

Education Savings Accounts (ESAs) would boost parents' control over their children's education, says Dan Lips of the Goldwater Institute.

ESAs begin with the idea that a successful primary education is the foundation of the American dream, and that parents are the best stewards of their children's education, says Lips. Here's how they work:

  • Instead of channeling children's education funding through the public education system, the government would deposit those funds directly into each child's ESA.
  • Parents could then choose a private-, charter- or public-school education for their child or pay for other qualified education expenses such as tutoring.
  • Unspent money would accumulate and parents could eventually use those savings for college or job-training programs, and parents can also contribute to the accounts.

Arizona policymakers could create the nation's first statewide system of ESAs, since its decade-old charter school system provides a practical model for designing ESAs, says Lips. Furthermore:

  • Arizona could allow parents the option to use their child's portion of state equalized based funding -- between $4,200 and $4,600 per traditional public-school student -- to pay tuition at a school of their choice.
  • Currently, an average of $4,900 in state equalized base funding follows each of nearly 82,000 Arizona students attending more than 500 charter schools.
  • Federal policymakers could likewise use ESAs to give parents ownership of the approximately $57 billion currently spent on K-12 education programs.

Since unspent savings could be held in the accounts, parents would have an incentive to shop for the best schools, which would reduce inflationary pressure more effectively than traditional scholarship programs and would help foster an "ownership society" by putting parents, not bureaucrats, in control of education resources, says Lips.

Source: Dan Lips, "Education Savings Accounts: A Vehicle for School Choice," Goldwater Institute, November 15, 2005.


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