On May 3, Texas became the latest state to approve a school choice program. It joins more than 30 other states and U.S. territories that have approved similar legislation. But what are these programs, and why are so many states pushing to enact school choice initiatives?
Texas lawmakers passed a $1 billion bill that established a private school voucher program. The program allows families to use public, taxpayer funds that would be spent on their student at a public school to pay for private school tuition, homeschooling or virtual education. Families can receive up to $10,000 per student annually, and up to $30,000 for students with disabilities.
Before Texas, Tennessee lawmakers passed their first universal school choice program on Feb. 12, and a year before that, Alabama state lawmakers passed the CHOOSE Act, which created an Education Savings Account, or ESA. These developments reflect a growing trend among states to implement or expand school choice programs around the country.
Many school choice advocates, including EdChoice, claim interest in these programs has increased because more parents are dissatisfied with their childโs education, especially following the COVID-19 pandemic. However, these programs can be costly, and critics claim redirecting some per-student funding from public schools to private institutions can strain public school resources.
โFor students who are in public schools who are leaving to take up these vouchers, it can have pretty severe effects on the public schools,โ Dr. Hilary Wething, economist with the Economic Policy Institute, which opposes school choice, said. โPublic schools rely on enrollment to determine their funding when a policy shock happens, like voucher programs, this essentially leads to a shock in potential enrollment decline. What that means essentially for the public schools is now they have fewer funds available to educate the students who remain in public school.โ
EPI lists teacher unions, the American Federation of Teachers and the National Education Association, among its largest funders.
What are school choice programs?
School choice programs fall into a few categories. The first is the school voucher program. According to Education Week, a school voucher program is a state-run system that allows parents to use public funding allocated for private school tuition. Vouchers are typically a coupon or a credit. The first voucher programs began in the late 1800s, with both Vermont and Maine creating programs. However, voucher programs began to pop up more after desegregation in the South after Brown v. Board of Education.
Another program some states use is tax-credit scholarship programs. These states offer tax credits to encourage companies or individuals to donate to a scholarship-granting organization. Those organizations then give money to eligible students to use toward tuition at a private school. These initiatives began in the late 1990s, with Arizona establishing the first program in 1997.
The third program states use is an Education Savings Account, or ESA. With these, states set aside funds in individual accounts for participating students. Parents of those students can withdraw that money to spend on approved educational expenses. That can be private school tuition or other educational purposes like tutoring, online courses or transportation expenses. These programs, along with voucher programs, originally targeted students with disabilities but many states have begun expanding these programs to allow most families to participate. States began showing interest in enacting ESAs starting in 2011, and Arizona was also the first state to enact a โuniversalโ school choice policy.
As of the second quarter of fiscal year 2025, more than 83,000 students utilized Arizonaโs ESA program. More than half of those students came from public schools before using an ESA.
How do these programs differ state-to-state?
Not every stateโs program is the same. For instance, Florida offers a universal ESA program. Florida offers each K-12 student more than $8,000 for private school, homeschool materials, online courses, tutoring and more. States typically set the amount offered in school choice programs based on the average annual state cost to educate a public school student.
Unbiased. Straight Facts.TM
In 1996, about 10,000 students participated in a private school choice program but in 2024, more than 1 million students were utilizing programs.
Indiana, on the other hand, uses a voucher system. This program provides nearly all K-12 students in the state up to 90% of the per-student funding that wouldโve been allocated to the studentsโ public school district, which averages to about $6,300, according to EdChoice. What remains after the family is given the money, is split between the state and the public school system that student would have gone to. The school receives local funds and the state retains the rest. However, a major difference between this program and Floridaโs is that families earning 400% more than whatโs required to qualify for the federal Free and Reduced-Price Lunch Program canโt enroll in Indianaโs program.
Now, families on these programs will not get the entire amount the state spends on a student on average. For most programs, families will receive around 60% to 90% of what the state spends on a student. The remaining funds, which are typically federal and local funding, remain with the state or the public school system.
In 2022, Arizona lawmakers passed a school ESA bill. That program was expected to cost the state just under $65 million. However, the cost ballooned to more than $320 million, causing a state โbudget crisis,โ according to ProPublica.
That claim, originating from teacher unions, is often refuted by pointing to school choice programsโ effects on education budgets. Despite a larger-than-expected ESA program, Arizona ended fiscal year 2024 with educational spending at more than $4 million under projections.
According to advocates like EdChoice, these programs offer students and families different options in their education. They say public schools are great for many kids but others need different options that better fit them. Nathan Sanders, policy and advocacy director for EdChoice, said these programs emphasize parentsโ choice.
โIt’s about the families and it’s about what’s best for them and we put a lot of emphasis on trusting parents and letting parents make the decision for their kids,โ Sanders said.
What are the main concerns about these initiatives?
While several groups support these programs, some donโt. One group that is against them is the National Education Association. This group is the largest labor union in the U.S., representing public school teachers and faculty.
The main concern many bring up is the additional financial strain these systems could create on public education. Dr. Wething said some of these programs cause an enrollment decrease in public schools. This causes public schools to lose some of their per-student funding, since they are funded by the number of students who are enrolled. She said this causes a decrease in funding that the schools werenโt prepared for.
โWhat that means for the public school, essentially, is they’re left with less funding to provide the same quality of education for students that didn’t make the choice to take up the voucher program. There’s inherently this cost into public schools just by being kind of the collateral damage of these voucher programs,โ Wething said.
A report by the American Federation of Teachers in 2024 found that most states have devoted a smaller share of their economies to public schools than they did in 2006. The same report also found that about 60% of the nationโs students who go to โchronically underfundedโ districts are in 10 states, and nearly all of those states have some sort of school choice program.
However, the total dollar amount spent on public education has increased during that same period. According to a report by Education Data Initiative, the U.S. is also spending more per student than most other developed countries.
Critics say some schools have to cut student services because of the funding decreases caused by school choice programs.
โI’ve seen services like guidance counselors sharing nurses among a few schools, reducing the amount of pupil support services or instructional support, particularly students that might have some learning disabilities or higher needs,โ Wething said. โAll of those get cut by a bigger percentage point than they should because schools now have to pay on their fixed costs, and they have fewer funds overall because of this decline in enrollment due to a policy shock that they couldn’t plan for.โ
However, school choice advocates say the overall total cost of some of these programs is a small fraction of a stateโs total education budget. Sanders said most school choice programs only use about 1% of the stateโs education budget but some states are higher.
โEducational choice programs, as it relates to education funding as a whole, for every state on average, education choice programs were only about 1% of education funding,โ he said.
According to research done by Straight Arrow News, Florida spends more than 10% of its K-12 funding on private school choice, more than any other state. Arizona came in second with 8.35%. The average spending of all states that have school choice programs was 1.74% of the stateโs total K-12 funding. However, research released by EPI on May 5 puts Floridaโs school choice budget allocation much higher, at more than 25%.
Another concern is that private schools could raise rates after a school choice program is passed. There is some evidence for this, too. According to a study by Princeton University, when Iowa passed its ESA plan in 2023, private schools raised tuition by up to 25%. When the state limited eligibility to students in particular grades, private schools again raised prices but slightly lower at up to 16%. However, during the same period, private schools did not raise rates for pre-K and kindergarten students, who werenโt eligible for the program.
โOftentimes, we’ve seen that these voucher programs, the schools that will take vouchers for students, will raise their tuition prices as the voucher funding goes in, making it still unattainable for low-income students to even take these vouchers,โ Dr. Wething said.
However, Sanders claims private schools will sometimes operate at a loss or cut parts of their budget so they can teach students at a lower rate. He said that as more families participate in school choice programs, the market will change to allow more competitive private school costs.
โThe more families you have participating in the education market, market conditions will eventually work that out right after a year or two, the program has passed, new schools will start to sign up for the program, new families will start to sign up for the program, but ultimately, you’ll see a competitive market. And what that also means is competitive education costs,โ he said.
According to data from the National Center for Education Statistics, public school revenue increased by 16% from 2010 to 2020. During 2020, the majority of funding, 46%, was from state sources, 44% was from local sources and 11% was from federal sources.
Sanders and EdChoice said that the ESA Iowa provides to students still covers the average cost of private school in 2023-2024. So, even though tuition rates did rise, their school choice program still covered the average cost of private school. According to SANโs research, Iowaโs school choice program did cover the average cost of private school in the state.
Some critics, however, say that many of these programs donโt cover the full cost of private school tuition and even if they do, families still may have extra costs associated with private schooling. SANโs research found that only four states โ Arkansas, Iowa, Oklahoma and Wisconsin โ provide families on average with enough money to pay for the average cost of private school in the state.
However, Sanders said even though some programs donโt cover the full amount, families are still happy to sacrifice a little in order to get their kids into a better school.
โThe parents have been sacrificing before, they’re able to sacrifice maybe another, you know, little bit of that and have this ESA to cover the rest, and that’s still a huge relief to families,โ Sanders said. โSo even if an ESA amount seems a little bit smaller, that doesn’t discount the ability for families to sacrifice and still send their kids to a better school.โ
School choice advocates often point to how programs improve students’ grades. Straight Arrow News takes a look at the impact the programs have made so far and reactions from parents in the second part of this series.
