Greg Forster, Ph.D. | October 29, 2020
Oklahoma needs a bigger ‘wallet’
Greg Forster, Ph.D.
Oklahoma could have an ESA overnight by expanding its Digital Wallet program. Simply increase the funding level to $5,000 per student, make eligibility universal, and include services as well as products.
Among the 30 states that have adopted private school-choice programs, five are using a new kind of school choice called Education Savings Accounts (ESAs). Oklahoma doesn’t have this kind of choice yet—but it almost does! The state already has two private-choice programs, but the superior value of ESAs and the potential to extend choice to all students make a little-known Oklahoma program well worth looking at.
Governor Kevin Stitt has used funds from the Governor’s Emergency Education Relief program to create a program called Digital Wallet. It provides, well, a digital wallet for up to 5,000 families with K-12 students whose income is at or below the federal poverty line. Each family gets $1,500 to spend on educational supplies of their choice from 30 providers. Funds are deposited in a special account parents can log in and use.
This is almost an ESA. States with ESA programs also deposit funds in special digital accounts that parents can log in and use to further their children’s education. The common principle is recognizing that parents ought to be in control of their children’s education. The difference is, an ESA isn’t limited to school supplies. It can also be used to pay for education services. That includes tutoring and other supplemental support, but it also includes tuition for attending a private school.
Like all school-choice programs, ESAs put parents back in charge of education. The government monopoly system can’t take children for granted when their families have access to choice; schools have to educate children effectively or see them walk out the door. Comfortable and socially advantaged families already take this kind of attention for granted, because they have more political influence, and they also exercise school choice whenever they move. School choice extends this power to all families.
But ESAs do a better job than most choice programs of putting parents back in charge. They provide families with more flexibility than a traditional “voucher” or “scholarship” program. Parents can apply the funds to a wider variety of possible uses, and are empowered to make their own decisions about price points and tradeoffs—one family may spend more on tuition to get into a better school, and another may save that money for tutoring. And leftover funds can be applied to college tuition, which eliminates the artificial incentive to spend the money at the K-12 level or lose it.
Oklahoma could have an ESA overnight just by expanding what the funds in the Digital Wallet can be spent on to include services as well as products. There’s no reason parents should be denied the power to make their own decisions about educational services, any more than for decisions about educational products. Parents are uniquely well qualified to make the biggest and most important decisions for their own children.
Education is not supposed to serve the interests of employers and politicians. To educate a child means preparing a whole person for a whole life. Far from being something that’s too important to leave to parents, it’s something that’s too important not to leave to parents! If education isn’t controlled by the family, it will be controlled by business and the state—as we see under the current government monopoly on education. Today’s pedagogy is largely geared toward crushing independent spirits, teaching children to sit quietly and learn to be obedient employees and subjects.
Of course, $1,500 doesn’t go far for tuition. It would be a help to parents who can’t afford private school on their own, but it wouldn’t be very much of a help. Increasing the funding level to something like $5,000 per student would provide more and better education—and it would save taxpayer money, since Oklahoma spends more than that on every child in its public schools. There is a large scholarly literature studying the fiscal effects of choice programs, and it consistently finds that even the more financially generous programs save taxpayer money. Oklahoma can spend $5,000 for a private school that will be a better choice for that child, or almost $9,000 for a public school that will be a worse choice for that child.
Even so, the program would only serve families below the federal poverty line. There’s no reason choice should be limited, in that way or in any way. It should be universal, because all children need to have their parents in charge of their upbringing and education. True, parents with more wealth and social advantage may not need choice as desperately as the less fortunate, but it’s still morally and pragmatically preferable not to discriminate. The moral principle is the same, and the programs will be politically stronger with more beneficiaries. (And, as we’ve seen, it doesn’t cost more money to include more people—it actually saves more!)
One issue that would need to be addressed is the danger of fraud or mismanagement in the program. Critics of choice always claim these programs will be abused. In fact, even as choice programs have proliferated nationwide, such cases have remained exceptionally rare. (Research shows that fraud and scandal are more common in public schools, which are heavily insulated from parent accountability, than in private schools. But that never seems to come up in these conversations.)
Digital Wallet limits the use of funds to 30 preselected vendors, in order to ensure the funds are used for their proper purpose. Existing school choice programs, including ESAs, have analogous requirements to protect against abuse. While some of these are overly restrictive, others do a good job of protecting the program while making choices available. When transforming Digital Wallet into an ESA, Oklahoma could apply the same protections that it already uses in its other school-choice programs, or study the best programs nationwide and adopt new approaches.
Digital Wallet already recognizes that parents can and should make educational decisions for their children. It’s time to recognize that parents should be in charge of selecting educational services, not just educational products. Oklahoma needs a bigger wallet.
Greg Forster, Ph.D.
Greg Forster (Ph.D., Yale University) is a Friedman Fellow with EdChoice. He has conducted numerous empirical studies on education issues, including school choice, accountability testing, graduation rates, student demographics, and special education. The author of nine books and the co-editor of six books, Dr. Forster has also written numerous articles in peer-reviewed academic journals, as well as in popular publications such as The Washington Post, The Wall Street Journal, and the Chronicle of Higher Education. His latest book is Economics: A Student’s Guide (Crossway, 2019).