A growing number of American students are benefiting from
school choice policies. Twenty years ago, few states and
communities offered parents the opportunity to choose their
children's school. Today, millions of American students are
benefiting from policies that enable parental choice in
This year, 13 states and the District of Columbia are supporting
private school choice. Approximately 150,000 children are using
publicly funded scholarships to attend private school.
Millions more are benefiting from other choice options ranging from
charter schools and public school choice to home schooling and
virtual education. Still, an estimated 74 percent of students
remain in government-assigned public schools.
If given the opportunity, many more children could benefit from
school choice options. To improve education in America, Congress
and state policymakers should reform public education laws to
allow greater parental choice.
School Choice in America
As of November 2007:
Eight states -- Arizona, Florida, Georgia, Maine, Ohio, Vermont,
Utah, and Wisconsin -- and the District of Columbia have policies
that provide taxpayer-funded scholarships to help students
attend private elementary or secondary schools of choice;
Seven states -- Arizona, Florida, Illinois, Iowa, Minnesota,
Pennsylvania, and Rhode Island -- offer incentives for contributions
to scholarship programs or allow tax credits or deductions for
education expenses, including private school tuition;
- Forty states and the District of Columbia have charter school
- All but four states and District of Columbia have some form of
public school choice policy;
- Home schooling is legal in every state; and
- Millions of children are utilizing new virtual education
and distance learning options.
Private School Choice. The strongest form of school
choice is private school choice, which enables parents to choose to
enroll their children in either a public or private school. In
2007, 13 states and the District of Columbia provided public
support for private school choice. The District of Columbia and
eight of the 13 states have tuition scholarship or school voucher
programs. Seven states offer tax credits or deductions for
education costs (including private school tuition) or for
donations to nonprofit organizations that provide tuition
scholarships to children.
The following is a state-by-state overview of private school
choice programs that are available.
Arizona. The Grand Canyon state has four
private school choice programs. Since 1997, the state has
offered taxpayers a dollar-for-dollar tax credit for donations to
nonprofit organizations that fund tuition scholarships. Tax credit
donations are currently capped at $500 per individual and
$1,000 for joint filers. In 2006, 24,678 students received
scholarships totaling $40.6 million through the program, and
Arizona taxpayers made 73,621 donations totaling $51
million. The funds raised in 2006 for scholarships
represent a 21 percent increase over 2005 contributions, making it
likely that thousands of additional students are receiving
scholarships this year.
In 2006, Arizona enacted three new private school choice
programs. The first was a corporate scholarship tax credit, which
allows businesses a dollar-for-dollar tax credit for donations to
fund tuition scholarships. The scholarships are for students
who meet family income guidelines (below $68,450 for a family of
four in 2006) and who were previously enrolled in public school or
are entering kindergarten. Corporate tax credits were capped at a
total of $10 million for 2006. The cap will increase by 20 percent
annually until 2012, when the program sunsets. In 2006, 87
corporations donated $7.3 million for scholarships. An estimated 1,200
students are receiving scholarships through this program during the
2007-2008 school year.
Arizona also enacted two new school voucher programs in 2006: a
private school scholarship program for children with
disabilities and a first-in-the-nation tuition scholarship program
for former foster children. The state allocated $2.5 million for
private school scholarships on a first-come, first-served basis for
qualifying special education students. In September 2007, 151
students were participating in the program.
Through the Displaced Pupils Choice Grant Program, children
who have been in foster care can receive tuition scholarships worth
$5,000 apiece on a first-come, first-served basis. (Children who
are currently in a foster care placement are not eligible.)
The program has awarded scholarships to 131 students for the
2007-2008 school year.
Florida. Florida has two private school choice
programs. Since 2000-2001, Florida has offered private school
tuition scholarships to children with disabilities through the
McKay Scholarship Program. According to the Florida Department
of Education, 18,919 students were participating in the
program as of November 2007. During the 2006- 2007
school year, the average scholarship amount was $7,206, and 811
private schools participated.
Since 2001, Florida has also offered corporations a
dollar-for-dollar tax credit for contributions to fund private
school scholarships for disadvantaged children. The tax credits are
currently capped at a total of $88 million per year. As of November
2007, 19,416 students in 906 different schools were receiving
scholarships through the program. In 2006-2007, the average
scholarship was $3,750.
In 2006, the Florida Supreme Court ruled that the private school
option in the state's Opportunity Scholarship program was
unconstitutional under the Florida state constitution.
This program, launched in 1999, had allowed students to transfer
out of low-performing public schools into private schools using
Georgia. In 2007, Georgia Governor Sonny
Perdue (R) signed into law a new special needs
scholarship program. Nearly 200,000 of the state's special
education students are eligible for the program. After the
legislation was signed, the families of 6,000 students
inquired about the scholarship program. In September 2007, 904
students had received scholarships for the 2007-2008 school
Iowa. Iowa has two private school choice
programs: a partial state income tax credit for education
expenses and a scholarship tax credit program. The income tax
credit allows parents to take a 25 percent tax credit for education
expenses (including private school tuition) up to $1,000 per child
on state income taxes. According to the Iowa Department of
education, Iowa taxpayers claimed $15.4 million in tax credits in
The scholarship tax credit program offers individuals a 65
percent tax credit for contributions to nonprofit organizations
that award tuition scholarships to children from families with
incomes below 300 percent of the poverty line. The tax credits
were originally capped at $2.5 million for 2006 and $5 million for
future years, but Governor Chet Culver (D) signed an
appropriations bill that increased the cap to $7.5 million for
Illinois. Since 2000, Illinois has offered
taxpayers an annual tax credit for 25 percent of education-related
expenses (including tuition, book fees, and lab fees) above $250,
up to a maximum tax credit of $500 per family. The Milton and Rose
D. Friedman Foundation reports that nearly 195,000 families claimed
$67 million in tax credits in 2003.
Ohio. Ohio has three private school scholarship
programs. Since 1996, the state has offered private school tuition
scholarships to disadvantaged children in Cleveland.
Vouchers are awarded to eligible students through a lottery,
with children from lower-income families receiving priority. As
of October 2007, 6,293 students were participating in the
Since 2004, Ohio has also offered tuition scholarships to
autistic children. The program offers participating students
up to $20,000 annually in state funding. School Choice Ohio reports
that 734 students are participating in the program during the
2007-2008 school year.
In 2006, Ohio enacted the EdChoice Scholarship Program, a
statewide school voucher program for children who attend
low-performing public schools. The program can provide up to 14,000
scholarships to qualifying students to attend private school.
Eligibility is restricted to children attending schools that have
been placed on "academic watch" or "academic emergency" for two of
the past three years under the state's school rating system.
School Choice Ohio reports that 6,934 students are participating in
the program during the 2007-2008 school year.
Maine. Maine has a long history of providing
limited school choice options. Since 1873, students from families
in small towns that do not have local public schools have been
awarded scholarships to attend public or private schools of choice.
The Friedman Foundation reports that 13,959 students participated
in the program in 2004-2005, with 7,907 attending public schools
and 6,052 attending private schools.
Minnesota. Minnesota offers families tuition tax
credits and deductions for education expenses. All families in
the state can receive a tax deduction for private school tuition
expenses. Lower-income families can receive a tax credit for
certain education expenses, not including private school tuition.
The state estimated that the credit will cost $15.3 million in
lost tax revenue in 2008 and that the tax deduction will cost $16
Pennsylvania. Since 2001, corporations in
Pennsylvania have been able to receive partial income tax
credits for donations to organizations that fund private
school scholarships or school improvement projects. Through the
Educational Improvement Tax credit program, businesses can receive
a 75 percent tax credit for a one-year donation or a 90 percent tax
credit for contributions for two years.
In 2001, tax credits were capped at a total of $20 million for
donations to fund private school scholarships and $10 million
for contributions to educational improvement organizations for
public schools. The caps were raised from 2003 through 2006,
reaching $35.9 million for scholarships and $18 million for public
school donations in 2006. According to the REACH Foundation, a
nonprofit organization based in Harrisburg, as many as 42,000
students will receive scholarships through the tax credit program
during the 2007-2008 school year.
In 2007, the state again expanded the program, raising the total
cap on tax credits to $75 million, with $44.7 million dedicated for
private school scholarships, $22.3 million for innovative
educational programs in public schools, and $8 million for
Rhode Island. In 2006, Rhode Island created a new
corporate scholarship tax credit program, which allows corporations
to take a tax credit for contributions to nonprofit groups that
fund scholarships to students from families that meet income
eligibility requirements (below 250 percent of the poverty
line). The tax credits are capped at a total of $1 million per
year. The Rhode Island Scholarship Alliance reports that all of the
available tax credit donations were taken for the 2007 and 2008
fiscal years. More than 250 students have received
scholarships through the program.
Utah. In 2005, Utah enacted the Carson Smith
Special Needs Scholarship program, which offers tuition
scholarships to children with disabilities. The program has
468 students for the 2007-2008 school year.
In 2007, Utah Governor Jon Huntsman Jr. (R) signed the Parent
Choice in education Act, which offered school vouchers to nearly
all children in Utah. Under the program, private school
scholarships would have been offered to all current public
school students, disadvantaged children currently attending private
school, and children entering kindergarten. Scholarships would
have varied between $500 and $3,000, with children from
lower-income families receiving larger amounts.
However, opponents of school choice managed to block the
program's implementation with a petition drive that forced a
statewide November referendum in which Utah voters rejected
the program by a vote of 62 percent to 38 percent.
Vermont. Like Maine, Vermont has a tuitioning
program for students who live in small towns that do not have local
public schools. This program, which began in 1869, allows students
in towns without local public schools to attend either public
schools in other towns or non-religious private schools.
Some towns allow parents to choose their children's schools, while
other towns send all of their children to the same school. The
Friedman Foundation reports that 8,040 students participated
in the program in 2004-2005, with 3,595 attending public schools
and 4,445 attending private schools.
Washington, D.C. In 2004, President George W. Bush
signed legislation to create the D.C. Opportunity Scholarship
program, which provides scholarships worth up to $7,500 to
students from families with incomes at or below 185 percent of the
poverty line. According to the Washington Scholarship Fund, the
nonprofit organization that administers the program, 1,903 students
are currently receiving scholarships to attend private schools
through the program. Participating families have an average
annual income of less than $23,000.
Wisconsin. Since the 1990-1991 school year,
disadvantaged children living in Milwaukee have been eligible to
attend private school using publicly funded scholarships. In
September 2007, 17,657 students were receiving scholarships through
the program. The program has grown dramatically since
its first year, when only 337 students received scholarships,
and is the largest urban school voucher program in the nation.
Public School Choice. American families are also
benefiting from more opportunities to choose the best public
schools for their children. According to the National Center
for education Statistics, the percentage of American students
attending assigned public schools decreased from 80 percent to 74
percent between 1993 and 2003. During this period, the percentage
of students attending chosen public schools grew from 11
percent to 15 percent.
The education Commission of the States reports that all but four
states and the District of Columbia have enacted some form of open
enrollment policy to facilitate choice within the public education
system. These open enrollment policies vary in
their strength in offering parents choice within the public
In addition to these state polices, the federal No Child Left
Behind (NCLB) Act requires states to offer students in
low-performing public schools the opportunity to transfer into a
higher-performing public school. The U.S. Department of Education
reports that millions of children are eligible for the public
school transfer option, but only a small percentage have
benefited. The Department of Education reported that 3.9
million students were eligible to transfer schools under NCLB
regulations in 2003-2004, but only 38,000 children (less than 1
A more recent study found that only 0.5 percent of eligible
students in nine large, urban school districts took advantage of
the public school transfer option in 2004-2005. The study suggested
that administrative problems, such as late notification, failure to
inform parents, and lack of capacity in higher-performing public
schools, contributed to the low participation in these parental
Charter Schools. The proliferation of charter schools
across the country is a primary reason for the increase in the
percentage of children attending chosen public schools.
Charter schools are publicly funded schools that agree to meet
certain performance standards set by governing authorities but are
otherwise free from the bureaucratic rules and regulations that
encumber traditional public schools. In this sense, charter schools
offer parents an alternative to traditional public schools.
The Center for education Reform, a nonprofit organization that
supports charter schools and school choice, reports that 40 states
and the District of Columbia have charter schools. An estimated 1.2
million children are attending 4,147 charter schools across the
country. In some communities, charter schools are
becoming a central component of the public education system. The
National Alliance for Public Charter Schools reports that 57
percent of students in New Orleans attend charter schools. In the
District of Columbia and Dayton, Ohio, 27 percent of students
attend charter schools. Only 10 states -- Alabama, Kentucky, Maine,
Montana, Nebraska, North Dakota, South Dakota, Vermont, Washington,
and West Virginia -- do not have charter school laws.
Homeschooling. Homeschooling is legal in every state, and
a growing number of American families are choosing to educate their
children at home. According to the U.S. Department of
Education, approximately 1.1 million students were being
educated at home in 2003, compared to an estimated 850,000
students in 1999. When home schooling families were asked why
they choose to homeschool their children, 31 percent cited the
environment of other schools as their primary reason, and 30
percent expressed a desire to provide religious or moral
Virtual education and Distance Learning.
Technological advances have also created new
opportunities for greater choice in education that would not
have been possible a generation ago. Many communities now
offer virtual education and distance learning programs. According
to the U.S. Department of education, 36 percent of public
school districts in 2002-2003 had students enrolled in distance
education courses, 9 percent of all public schools nationwide
offered some distance learning, and 15 percent of schools in rural
communities offered distance education.
education Savings Accounts. Another public policy that
fosters greater parental choice in education is education
savings accounts (ESAs) and tax incentives for ESA contributions.
Under federal law, families can save for their children's K-12 and
post-secondary education through the Coverdell Education
Savings Account program. After-tax dollars contributed to a child's
account can earn interest tax free if the funds are withdrawn for
allowed K-12 or higher education expenses, including private school
tuition, supplementary education services such as tutoring, summer
school, and public school enrichment programs.
Currently, no state offers a state-level tax deduction or credit
for contributions to Coverdell ESAs. However, more than 30 states
offer tax incentives for contributions to 529 college savings
plans, which under federal law allow tax-free savings for
post-secondary education expenses. In the future, states
could offer the same tax benefit for K-12 savings that is available
for post-secondary education.
Private School Choice: Developments in
Parental choice in education expanded in 2007. Yet these gains
were limited compared to what would have been possible if private
school choice options passed by the state legislatures in Utah,
Louisiana, and Ohio had been allowed to be implemented.
Georgia became the 13th state to offer parents private school
choice by enacting a special needs scholarship program.
Participation rates in private school choice programs continue to
grow across the country. Pennsylvania and Iowa responded to
growing demand for private school choice by increasing the
caps on their respective scholarship tax credit programs. In all,
measures to enact or expand K-12 private school choice were
introduced in at least 40 state legislatures in 2007.
However, private school choice initiatives that were passed by
the Ohio, Louisiana, and Utah legislatures were ultimately
blocked. Utah's universal school voucher program was repealed by
referendum. Ohio Governor Ted Strickland (D) vetoed a school
voucher program for children with disabilities.
Louisiana Governor Kathleen Blanco (D) vetoed legislation to create
a tax deduction for private school tuition. These
developments highlight the continuing political resistance to
policies that give families greater school choice options.
The Benefits of School Choice
The proliferation of school choice programs across the country
has enabled researchers to study the impact of school choice
policies on students, families, and school systems. A growing body
of research suggests that school choice policies benefit both
participating students and the public education system as a
Parental Satisfaction. A number of surveys and studies
have reported that parents are more satisfied with their children's
education when they can choose their children's schools. For
example, the U.S. Department of Education reports that a survey of
American parents found that "students enrolled in assigned public
schools tended to have parents who were less satisfied with the
schools than students enrolled in either a chosen public
school or a private school." The report also noted that
a national survey of parents in 1993, 1999, and 2003 found that
parents whose children attended chosen public schools or private
schools were more satisfied with the school, teachers,
academic standards, and order and discipline than were parents
whose children attended assigned public schools.
Many surveys have shown that parents whose children are
participating in school choice programs are generally highly
satisfied with their children's schools. For example, the
Georgetown University School Choice Demonstration Project reported
that, based on the responses of a focus group of families
participating in the D.C. Opportunity Scholarship program:
After nearly two years in the [Opportunity Scholarship Program],
parents by and large remain very satisfied with their
experiences. The parents also expressed satisfaction with
the reduced class size, a rigorous academic curriculum, strict
discipline and religious orientation they found in the
A survey of parents of children participating in Florida's McKay
scholarship program for children with special needs in 2003 found
that 93 percent were satisfied or very satisfied with their
children's schools, compared with only 33 percent who were
satisfied with the public schools that their children had
Academic Achievement. Researchers studying the effect of
private school choice options on students have reported
positive benefits. In 2005, education researcher Jay Greene
reviewed the evidence of eight random-assignment studies of five
school voucher and tuition scholarship programs, which compared the
performance of students who were awarded scholarships to attend
private school through a lottery system to the performance of their
peers who entered the lottery but did not receive scholarships and
therefore remained in public school, and concluded:
Every one of the eight random-assignment studies finds at least
some positive academic effect for students using a voucher to
attend a private school. In seven of the eight studies the benefits
for voucher recipients are statistically significant, meaning that
we can have high confidence that the academic gains observed are
not merely the product of chance.
Greene points out that these positive results were found even
though the scholarships awarded to participating students cost less
than the expenditure per student in public school.
In June 2007, the U.S. Department of Education released the
initial results of an academic evaluation comparing the test
scores of students using vouchers through the D.C. Opportunity
Scholarship program to attend private school with the test
scores of a control group of students who remained in public
school. The study found no statistically significant differences
between the test scores of participating students and students who
were not offered scholarships.
However, this evaluation measured test score changes after only
one year. The authors of the Department of Education report note
that, in other academic evaluations of academic achievement in
voucher programs, a consistent pattern of academic achievement has
not been evident after only the first year. Thus, forthcoming
evaluations of test scores after the second and third years will
likely be more revealing about the program's impact.
Positive Effect of Competition. Beyond helping
participating children, school choice programs also introduce
competition into public school systems, which forces public schools
to become more efficient or lose students. Academic research
studies have reported that school choice competition has led to
improved performance in public school systems.
In 2001, economists Clive Belfield and Henry Levin reviewed more
than 40 studies of the effects of competition in education. They
reported that "A sizeable majority of these studies report
beneficial effects of competition across all outcomes, with many
reporting statistically significant coefficients."
Harvard University economist Caroline Hoxby studied the effects
of competition on education in Arizona, Michigan, and Milwaukee and
reported positive effects. She found that Arizona and Michigan
public schools that faced competition from charter schools made
greater academic improvement than public schools that did not
face competition. She also reports that public schools that
faced competition from private schools through the Milwaukee school
voucher program similarly improved their performance compared to
public schools that faced less competition.
Positive Fiscal Impact. Private school choice policies
are also having a positive fiscal impact in the communities that
implement them. Susan Aud reviewed the fiscal impact of school
choice programs from 1990 through 2006 and found that "School
choice programs have saved a total of about $444 million" during
that period, including "a total of $22 million saved in state
budgets and $422 million saved in local public school
districts." Because the amount provided to students
in scholarship or voucher programs is generally lower than the
amount spent by state and local governments to educate a child in
public school, states and localities save money when children use
school choice programs to transfer out of public schools.
The Need for School Choice
Millions of children in America's public schools are not
receiving a quality education. According to the 2007 National
Assessment of Educational Progress's Nation's Report Card,
33 percent of 4th graders and 26 percent of 8th graders scored
"below basic" in reading, and 18 percent of 4th graders and 29
percent of 8th graders scored "below basic" in mathematics.
Students from lower socioeconomic backgrounds scored lower
than their peers. In 2007, among students who were eligible for the
free and reduced-price school lunch program, 50 percent of 4th
graders and 42 percent of 8th graders scored below basic in
High school dropout rates also show that many children are not
succeeding in the U.S. K-12 education system. According to
various reports, the estimated average high school graduation rate
is between 71 percent and 74 percent. High school graduation
rates are even lower among ethnic minority students: 56 percent of
African-American and 52 percent of Hispanic students graduated in
2002, compared to 78 percent of white students.
Students who fail to graduate high school are more likely to
impose costs on society and taxpayers. Researcher Brian J.
Gottlob has projected that the estimated 119,000 Texas students in
the class of 2005 who dropped out of high school cost the state
$377 million, or $3,168 per student, annually. Over the course of
their lifetimes, one class year of high school dropouts will cost
the state an estimated $19 billion.
This is a very conservative estimate, since it includes only
lost tax revenue and higher Medicaid and incarceration costs. High
school dropouts likely impose a much higher cost on society.
The low educational attainment of so many children in
America's public education system imposes personal costs on the
students and societal costs on communities and the nation as a
whole. The U.S. Census Bureau has estimated that a full-time worker
with a bachelor's degree will earn nearly $1 million more than a
full-time worker who is only a high school graduate.
Failing to succeed in America's elementary and secondary schools
imposes a lifetime financial burden.
Expanding parental choice in education will not solve all of the
problems in American education, but giving families the power
to choose the best schools for their children would provide an
immediate benefit to children who are assigned to low-performing
public schools. Expanding school choice would create a reform
environment that encourages innovation and improvement.
High-performing schools would become models that other schools
would imitate. Low-performing schools would be forced to improve or
risk losing students to higher-performing schools. Creating a
reform environment of healthy competition is an important step
toward improved public education in America.
What Congress and State Policymakers
Public education governance is primarily the responsibility of
state and local government. Education is not mentioned in the
U.S. Constitution and should therefore not be the responsibility of
the federal government. However, since the mid-20th century, the
federal government has taken an increasing role in funding and
regulating public education.
Congress and state policymakers should reform public education
laws to strengthen parental choice in education. Specifically,
Expand parental choice in the District of Columbia, where
Congress has oversight authority over the local public school
system. Specifically, Congress should reauthorize the D.C. Choice
Incentive Act of 2003 and create new school choice options for
families living in the nation's capital.
Expand Coverdell education Savings Accounts to give
families greater ability to save for and pay for their children's
K-12 education costs to ensure that they receive a quality
Reform No Child Left Behind to restore greater state and
local control in education and to restore parental choice.
Specifically, Congress should reform NCLB to allow states to enter
into charter agreements with the U.S. Department of Education to
give states greater authority to decide how federal funds for
education are spent. At a minimum, the law's existing parental
choice options should be strengthened.
For their part, state policymakers should:
- Enact education reforms that give families greater school
choice options, including private school choice programs like
tuition scholarships and education tax credits.
- Expand parental choice within the public education
system by enacting strong public school options, enacting
strong public charter school laws to promote more charter school
options, and offering innovative learning options such as distance
learning and virtual education.
- Expand education savings options for families by
offering taxpayers the same incentives for K-12 education as are
currently available for post-secondary education.
Across the United States, a growing number of families are
benefiting from greater opportunities to choose the best schools
for their children. Today, 13 states and Washington, D.C., have
private school choice programs. Most states now offer at least some
choice within the traditional public school system through charter
schools or public school choice laws.
Still, millions of American children remain assigned to
low-performing public schools. State and federal policymakers
should implement education reforms to give all parents the
opportunity to choose the best schools for their children.
Dan Lips is Education Analyst
in the Domestic Policy Studies Department at The Heritage