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Recalibrating Accountability: Education Savings Accounts as Vehicles of Choice and Innovation

December 12, 2016
By Jason Bedrick and Lindsey M. Burke

How ESAs Expand Educational Opportunity And Hold Education Providers Directly Accountable To Parents

From the Executive Summary:

In order to foster a variety of innovative and high-quality education options for all students, universal access to education savings accounts (ESAs) should be the goal of policymakers in every state.

ESAs are flexible spending accounts that parents can use to purchase a wide variety of educational goods and services, including private school tuition, tutors, textbooks, homeschool curricula, online courses, educational therapy, and more. Parents can also save unused funds for later educational expenses, such as college tuition.

This Special Report explores how ESAs expand educational opportunity and hold education providers directly accountable to parents; it also explains several common types of regulations that can undermine the effectiveness of the program and how they can be avoided.

The potential of ESAs to foster innovation and improved quality depends on a robust market in education. Increasing demand will require a critical mass of potential students, so ESAs should be made available to all families. A robust education market will also require education providers to have the freedom to innovate and parents to have the freedom to choose the providers that best meet their child’s needs. International research comparing different types of education systems has found that the most market-like, least regulated systems consistently outperformed more centralized and regulated ones. Policymakers therefore should avoid well-intentioned but misguided regulations such as open admissions requirements, price controls, state testing mandates, and excessive reporting requirements. Although intended to guarantee access and accountability, these regulations produce unintended consequences that can reduce the effectiveness of ESAs and even undermine their intended goals.

The best way for policymakers in Texas and elsewhere to expand access to a high-quality education for all children is to provide all families with ESAs that give them the maximum possible freedom to choose the education providers that work best for their children.