Society and Culture, Education

Regulating school-choice markets

Image Credit: Shutterstock

Image Credit: Shutterstock

School choice advocates have been looking for a regulatory sweet spot for private school choice programs for years. Too much regulation, the story goes, will unnecessarily restrict the schools that participate, and too little will make the market a free-for-all that risks harming as many children as it helps. Policymakers must balance the freedom participating schools need to creatively meet the needs of their students with their responsibility to be wise stewards of the public’s limited resources.

According to the Thomas B. Fordham Institute’s new paper School Choice Regulations: Red Tape or Red Herring? there is a direct—though small—negative relationship between the amount of regulation a program imposes and the number of schools that choose to participate in the program. On their 0 to 100 scale of regulatory burden, a shift from a score of 10 (low) to a score of 75 (high) would result in a 9% decrease in the participation rate. In a state like Indiana, where around 300 schools participate in the program; this would mean 27 fewer schools offering seats to children on scholarships.

To get an idea of the sweet spot, we can take a look at the Florida Tax Credit program, which was right in the middle of the regulatory pack with a score of 49 out of 100. In that program, schools are required to be approved by the state and to prove that they have complied with all local and state health and safety codes. Their employees must undergo background checks and have at least a bachelor’s degree, three years of teaching experience, or some demonstrated special expertise. They must provide a surety bond for the scholarship dollars and provide financial reporting to the state if they get more than $250,000 in scholarship funds. All participating students must take either a nationally norm-referenced standardized test or the state assessment (the FCAT) and all schools with at least 30 students in grades 3-10 must make public test score gains (Hat Tip as usual to the dynamite School Choice Yearbook, put out by the Alliance for School Choice, my go-to source on program details).

These regulations don’t sound too crazy to me; they seem to strike a good balance of accountability for safety, fiscal responsibility, and academic performance without being overly dictatorial in how schools must demonstrate any of those. Also, considering that just shy of 1,200 schools chose to enroll 38,000 students in the program in the 2011-12 school year, it would seem that those regulations are not standing in the way of participation.

One detail that stuck out to me is the relative insulation of Catholic schools from this trend. Already, Catholic schools participate in private school choice programs at a rate 19 percentage point higher than other private schools (76% to 57%) and never dip below 70% in even the most regulated environments. Given that Catholic schools make up 40% of all private school seats in America, this is encouraging news.

I think the authors are right that this phenomenon is driven by Catholic schools’ need to stem the tide of enrollment declines they have suffered for the past half-century. But where they really hit the nail on the head is when they postulate that “voucher programs are well-aligned with the Catholic church’s mission to serve the poor.” Simply looking at the survey results from participating schools (Catholic and otherwise) shows a full 87% saying that their participation is driven by their desire to expand their mission in their community. Seventy-five percent expressed a wish to help eligible families enroll in their schools and 72% want to help needy children in their community. Given that it is Catholic Schools Week, I figured that tidbit was more than appropriate.

As state leaders look to enact new or expand existing choice programs, this report’s careful analysis can help them find a regulatory sweet spot that protects children and taxpayers without stifling innovation. They, and you, should definitely give it a read.

One thought on “Regulating school-choice markets

  1. The quickest and easiest way to gain approval and acceptance is for choice schools to certify to attain the NAEP level for advanced proficiency in the 4th, 8th and 12th grades.

    If that is what they commit to do – the rest of the regulations will have a lot less meaning and purpose.

    This can be done by developing and instituting an industry “best practice” that sets the standard for all choice schools – and really give them a leg up over public schools of which only less than 1/3 meet the “advanced proficiency” standard.

    Once people realize that the choice schools will perform at least as good as or even better than public schools – the trend will accelerate and ‘regulation’ will not be seen as an impediment.

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