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Research & Commentary: The Time Is Now for Universal ESAs in Iowa

March 8, 2019

Universal Program Would Take Effect In 2020

A proposal in the Iowa General Assembly would create education savings grants, a universal education savings account (ESA) program that would be open to all Hawkeye State children.

With an ESA, state education funds allocated for a child are placed in a parent-controlled savings account. Under the Iowa proposal, parents would be able to use a state-provided, restricted-use debit card to access education funds to pay for resources for their child’s unique educational program. The ESAs could be used to pay for tuition and fees at private and parochial schools, textbooks and curriculum materials, online learning programs, tutoring services, and educational therapies. They could also be used to cover the fees required to take national standardized achievement tests, such as the SAT or ACT.

Funding of these ESAs would be “an amount equal to the difference between eighty-seven and five-tenths percent of the regular program state cost per pupil and the statewide average foundation property tax per pupil for the same school year.” All leftover funds could be rolled over for use in the following school year and used to pay tuition costs for higher education.

An EdChoice fiscal analysis of a universal ESA program similar to education savings grants released in February 2019 found the amount of net savings to Iowa school districts under the program, on the low end, would be greater than $29 million, or roughly $6,600 per ESA student.

Copious other empirical research on ESAs and other school choice programs finds these programs offer families improved access to high-quality schools that meet their children’s unique needs and circumstances. Moreover, these programs improve access to schools that deliver quality education inexpensively. Additionally, these programs benefit public school students and taxpayers by increasing competition, decreasing segregation, and improving civic values and practices. 

Students at private schools are also less likely than their public school peers to experience problems such as alcohol abuse, bullying, drug use, fighting, gang activity, racial tension, theft, vandalism, and weapon-based threats. There is also a strong causal link suggesting private school choice programs such as ESAs improve the mental health of participating students.

It is probably for these reasons that ESAs are more popular with parents than ever before. The results of EdChoice’s sixth annual Schooling in America survey, released in December 2018, found 74 percent of respondents favor ESAs, up 3 percentage points from 2017. According to the survey, support for ESAs is 76 percent among millennials, 72 percent for those with incomes less than $40,000 a year, 79 percent for blacks, 70 percent for Hispanics, 72 percent among self-identified Democrats, and 77 percent among independents. Furthermore, 78 percent of public school teachers surveyed support ESA programs.

These results are mirrored in the American Federation for Children’s latest annual National School Choice Poll, which shows 78 percent support for ESA programs from likely voters in the 2020 election. Support for ESAs in this poll sits at 84 percent among millennials, 86 percent from blacks, 84 percent from Hispanics, 85 percent from Republicans, 78 percent from independents, and 73 percent from Democrats.

Education savings grants would be the perfect complement to Iowa’s other school choice program, the School Tuition Organization Tax Credit, which was designed specifically for low-income families.

The goal of public education in Iowa today and in the years to come should be to allow all parents to choose which schools their children attend, require every school to compete for every student who walks through its doors, and make sure every child has the opportunity to attend a quality school.

The following documents provide more information on education savings accounts and school choice.

Education Savings Accounts in the Hawkeye State: Potential Fiscal Effects on State and Local Taxpayers
https://www.edchoice.org/wp-content/uploads/2019/02/ESA_Fiscal_Brief_v6_1.pdf
In this EdChoice Fiscal Brief, Visiting Scholar Martin Lueken determined the fiscal effects of two proposed ESA bills in Iowa on state taxpayers, local property taxes, and school districts. He uses data from his past research, along with publicly reported obtained from the Iowa Department of Education and Iowa Department of Management.

Education Savings Accounts: The Future of School Choice Has Arrived
https://www.heartland.org/publications-resources/publications/education-savings-accounts-the-future-of-school-choice-has-arrived
In this Heartland Policy Brief, Policy Analyst Tim Benson discusses how universal ESA programs offer the most comprehensive range of educational choices to parents; describes the six ESA programs currently in operation; and reviews possible state-level constitutional challenges to ESA programs.

A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
http://www.edchoice.org/wp-content/uploads/2016/05/A-Win-Win-Solution-The-Empirical-Evidence-on-School-Choice.pdf
This paper by EdChoice details how a vast body of research shows educational choice programs improve academic outcomes for students and schools, saves taxpayers money, reduces segregation in schools, and improves students’ civic values. This edition brings together a total of 100 empirical studies examining these essential questions in one comprehensive report.

2018 Schooling in America Survey: Public Opinion on K–12 Education, Parent and Teacher Experiences, Accountability, and School Choice
https://www.edchoice.org/wp-content/uploads/2018/12/2018-12-Schooling-In-America-by-Paul-DiPerna-and-Michael-Shaw.pdf
This annual survey from EdChoice, conducted in partnership with Braun Research, Inc., measures public opinion and awareness on a range of K–12 education topics, including parents’ schooling preferences, educational choice policies, and the federal government’s role in education. The survey also records response levels, differences, and intensities for citizens located across the country and in a variety of demographic groups.

The Effects of School Choice on Mental Health
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3272550
This study from Corey DeAngelis at the Cato Institute and Angela K. Dills of Western Carolina University empirically examines the relationship between school choice and mental health. It finds that states adopting broad-based voucher programs and charter schools witness declines in adolescent suicides and suggests that private schooling reduces the number of times individuals are seen for mental health issues.

Competition: For the Children
https://www.heartland.org/publications-resources/publications/competition-for-the-children
This study from the Texas Public Policy Foundation claims universal school choice results in higher test scores for students remaining in traditional public schools and improved high school graduation rates.

The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
https://object.cato.org/sites/cato.org/files/pubs/pdf/pa830.pdf
This Policy Analysis from the Cato Institute examines the effect increased access to private schooling has had on international student test scores in 52 countries. The Cato researchers found that a 1 percentage point increase in the share of private school enrollment would lead to moderate increases in students’ math, reading, and science achievement.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit School Reform News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Arianna Wilkerson, a state government relations manager at The Heartland Institute, at awilkerson@heartland.org or 312/377-4000.

Author
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
TBenson@heartland.org @BenceAthwart