America's Opportunity Scholarships for Kids: School Choice for Students in Underperforming Public Schools

Report Education

America's Opportunity Scholarships for Kids: School Choice for Students in Underperforming Public Schools

May 30, 2006 15 min read Download Report
Dan Lips
Senior Policy Analyst

Millions of students across the United States are enrolled in persistently failing public schools. During the 2004-2005 school year, 2,112 Title I public schools were identified as having failed to make ade­quate yearly progress for five or more years. This rep­resents 23 percent of all Title I-eligible schools.

In addition, failing schools serve a disproportion­ately high number of low-income children.[1] In the large school districts of New York City and Los Ange­les, for example, as many as 300,000 children are attending the most persistently underperforming public schools.[2]

In 2006, President Bush proposed the America's Opportunity Scholarships for Kids initiative in his budget request for the Department of Education.[3] The plan would make $100 million available in com­petitive grant awards to provide scholarships to low-income students in persistently failing public schools.

Only low-income students attending public schools that are in the "restructuring" phase of No Child Left Behind (NCLB) would be eligible to participate. Restructuring occurs when schools fail to meet ade­quate yearly progress (AYP) for six consecutive years. The America's Opportunity Scholarships for Kids initiative would provide better opportunities to an estimated 23,000 students and demonstrate the pos­itive benefits of student-centered education reform.

The Need for Opportunity Scholarships

The No Child Left Behind Act of 2002 was intended to give children in underperforming public schools the opportunity to transfer to better performing schools. Under NCLB, children in Title I public schools that fail to make adequate yearly progress on state exams for two years are eligible to transfer to a higher performing public school. After three years of missing AYP, students are eligi­ble to receive supplemental educational services (SES) or after-school tutoring from a public or pri­vate provider.

These limited parental choice provisions, how­ever, are not widely used. According to a Depart­ment of Education assessment, less than 1 percent of the 3.9 million eligible students used the public school choice option during the 2003-2004 school year.[4] Less than 17 percent of eligible stu­dents participated in the after-school tutoring program.[5]

One explanation for the lack of participation in these parental choice programs is poor implemen­tation by school districts. For example, the Depart­ment of Education reports that half of all school districts notified parents of the public school choice options after the school year had already begun. In these school districts, "notification occurred, on average, five weeks after the start of the school year."[6]

There is evidence of similar problems in the after-school tutoring program. Department of Edu­cation interviews with parents of students in schools eligible for supplemental educational ser­vices found that nearly half were unaware of the program, which points to a failure of the school systems to inform parents adequately.[7] Former U.S. Under Secretary of Education Gene Hickok recently highlighted this problem: "Thousands, if not millions, of our nation's most at-risk students are routinely and systematically being denied access to the promise of educational opportunity by local public education officials who would like to see SES go away."[8]

The America's Opportunity Scholarships for Kids Initiative

The Opportunity Scholarship for Kids initia­tive would ensure that thousands of needy stu­dents have access to real school choice. The plan would provide $100 million in competitive grants to states, local school systems, and non­profit organizations that agree to provide scholar­ships to low-income children. Groups that would be eligible to distribute the scholarships could include local school boards and nonprofit organi­zations like the Washington Scholarship Fund, which manages the federal D.C. Opportunity Scholarship program.

Under the Opportunity Scholarships for Kids program, participating children would receive either a $4,000 scholarship for private school tuition or $3,000 for supplemental educational ser­vices or after-school tutoring. Eligibility would be limited to children with the greatest need. Only economically disadvantaged children enrolled in public schools in the restructuring phase of No Child Left Behind would be eligible to receive a scholarship.[9]

The $100 million provided under the initiative could fund roughly 23,750 school choice scholar­ships worth $4,000 each, assuming administrative costs of 5 percent. If this amount were awarded to 10 cities ($10 million each), opportunity scholar­ships could be awarded to 2,735 low-income chil­dren in each of 10 underperforming school systems across the nation.

Millions of Children Trapped in Underperforming Public Schools

Many local communities could benefit from an opportunity scholarship program. According to the Department of Education, 2,112 public schools were in the corrective action or restruc­turing phases of No Child Left Behind during the past school year. (See Table 1.) Data are not yet available for the 2005-2006 school year. The Department of Education has estimated that approximately 1,700 public schools may soon be in the restructuring phase of NCLB. Therefore, many low-income students enrolled in these schools would be eligible to participate in the America's Opportunity Scholarships for Kids ini­tiative next year.[10]

The number of corrective action and restructur­ing schools in each state is only a crude measure of how many children are being left behind in Amer­ica's public schools. Table 2 provides state-by-state data on student performance on the National Assessment of Educational Progress (NAEP) exam and an estimate of the percentage of students who qualify as economically disadvantaged. According to the NAEP exam, 32 percent of 8th graders scored "below basic" on math in 2005, and 29 per­cent scored "below basic" on reading.[11] The Cen­sus Bureau reports that approximately 34 percent of American children live at or below 185 percent of the poverty line.[12]

Examples of School Districts That Could Benefit

The America's Opportunity Schol­arships for Kids program would award funds through a competitive grant process. Table 3 provides esti­mates of the number of schools and enrolled students in nine large school districts that could benefit from the Opportunity Scholarships program. This information was com­piled from state lists of public schools in the restructuring phase of NCLB and student enrollment fig­ures estimated using data from Stan­dard & Poor's.[13]

Strong Demand for School Choice Among Low-Income Families

If opportunity scholarships were made available to children in persistently failing public schools, it is likely that many students would apply. Evidence suggests that low-income families with children in failing public schools eagerly seek school choice scholarships.

In 1999, the nonprofit Children's Scholarship Fund offered 40,000 private school scholarships to low-income children across the nation, and 1.25 million applied-more than 30 applicants for each scholarship.[14] In major cities including New York, Newark, New Orleans, Philadelphia, and Washing­ton, approximately one in three eligible students applied. These families applied for scholarships despite a requirement that they pay a matching tuition co-payment averaging $1,000 per stu­dent.[15] This is a considerable investment, consid­ering the income of the average scholarship recipient's family was below $27,000.[16]

The Children's Scholarship Fund is not the only example of families craving school choice scholar­ships. In 2003, according to the Goldwater Insti­tute, an estimated 2,000 children were on a waiting list for scholarships from the Arizona School Choice Trust, a nonprofit group that provides tuition scholarships to low-income families.[17] When the Washington Scholarship Fund offered private school scholarships to low-income families for the federally funded D.C. Opportunity Scholar­ship program, nearly two applicants applied for each available scholarship.[18]

The Benefits for Students

School choice scholarships' popularity with fam­ilies should not be a surprise given the poor perfor­mance of many public schools across the nation. Research evidence suggests that school choice pro­grams increase parents' satisfaction with their chil­dren's schools. For example, a U.S. Department of Education report released in 2003 found that:

Parents whose children attend either public, chosen schools or private schools were more likely to say they were very satisfied with their children's schools, teachers, academic standards, and order and discipline than were parents whose children attended public, assigned schools.[19]


Millions of American children are not receiving a quality education in their current public schools. If roughly 30 percent of the nation's 8th graders in public schools are scoring "below basic" in math and reading, the current public school system is leaving behind approximately 14 million stu­dents.[20] Many of these students could benefit from the opportunity to attend schools of their parents' choice.

Congress should provide families with greater ability to choose their children's schools. The Bush Administration's America's Opportunity Scholarships for Kids initiative would provide real school choice to American parents. In addition to helping these children, the Opportunity Scholar­ship initiative would provide a model for how fed­eral, state, and local policymakers can provide better educational opportunities for America's dis­advantaged students through student-centered reforms.

Dan Lips is Education Analyst in Domestic Policy Studies at The Heritage Foundation. Heritage Founda­tion intern Jessica Brien also contributed research to this paper.

[1]U.S. Department of Education, Institute of Education Sciences, Implementation, Vol. I of National Assessment of Title I: Interim Report, February 2006, NCEE 2006-4001, pp. 42-43, at (May 18, 2006).

[2]New York State Education Department, "School in Need of Improvement List," May 1, 2006, (May 19, 2006); California State Department of Educa­tion, "AYP County List of Schools Reports," at (May 19, 2006); and Standard & Poor's, "SchoolMatters," Web site, at (May 16, 2006).

[3]U.S. Department of Education, "Choices for Parents: America's Opportunity Scholarships for Kids," February 2006, at (May 16, 2006).

[4]U.S. Department of Education, Implementation, p. xiii.


[6]Ibid., p. xiv.

[7]Ibid., p. 68.

[8]Education Industry Association, "School Districts Deny Students Access to Tutoring," February 21, 2006, at (April 12, 2006).

[9]A school must have failed to meet "adequate yearly progress" for six or more years to be in the "restructuring" phase of NCLB. It is likely that low-income status would be defined as eligibility for participation in the federal free and reduced-price school lunch program.

[10]Press release, "Secretary Spellings Delivers Remarks on School Choice," U.S. Department of Education, April 5, 2006, at (May 16, 2006).

[11]U.S. Department of Education, Institute of Education Sciences, "National Assessment of Educational Progress: The Nation's Report Card, Reading 2005," NCES 2006-451, October 2005, at (May 16, 2006), and "National Assessment of Educational Progress: The Nation's Report Card, Math 2005," NCES 2006- 453, October 2005, at (May 16, 2006).

[12]Bureau of Labor Statistics and U.S. Census Bureau, "Annual Demographic Survey," revised June 30, 2005, at (April 14, 2006).

[13]Standard & Poor's, "SchoolMatters."

[14]Ron Scherer, "Kids Across U.S. Line Up for Private Vouchers," The Christian Science Monitor, April 22, 1999.

[15]Anemona Hartocollis, "Private School Choice Plan Draws a Million Aid-Seekers," The New York Times, April 21, 1999, p. A1.

[16]Children's Scholarship Fund, "About CSF," at (May 16, 2006).

[17]Dan Lips, "The Impact of Tuition Scholarships on Low-Income Families: A Survey of Arizona School Choice Trust Parents," Goldwater Institute, December 11, 2003.

[18]V. Dion Haynes, "2nd D.C. Voucher Lottery Gets Stronger Response," The Washington Post, April 16, 2005, p. B2.

[19]U.S. Department of Education, National Center for Education Statistics, Trends in the Use of School Choice: 1993 to 1999, NCES 2003-031, May 2003, p. 25, at (May 16, 2006).

[20]There are an estimated 48.2 million students in public schools in the United States. U.S. Department of Education, National Center for Education Statistics, "Digest of Education Statistics," Table 37, at (April 14, 2006).


Dan Lips

Senior Policy Analyst