Education Choice Benefits All (Except Teachers Unions)

A new study of the fiscal effects of school choice programs confirms they save the taxpayers money AND improve the academic performance of those left behind in government-run schools.

A standard argument against school choice is that programs allowing the state-allotted government funding for each child to be used for education options of the family’s choice unfairly deprive government-run public schools of money, to the detriment of the children who remain behind. A new study from EdChoice demonstrates that education choice programs save taxpayer dollars and increase per-student resources for those who remain in the conventional public schools.

In short, the study found that education choice programs benefit children in all types of schools and other education options, and the taxpayers as well.

Study author Martin F. Lueken, Ph.D., ran the data for “the fiscal effects of education choice programs across the United States from an analysis of 48 private education choice programs in 25 states plus D.C.” and found they saved an average of $11,000 per student moving from a government-run school to a school of choice:

In FY 2022, the average public funding per student for education choice programs was about $6,000, compared to $17,000 per student for public schools in states where choice programs operate. That is, students using education choice programs only received around one-third (36%), on average, of the per-pupil funding amount their peers received in nearby public school systems[.]

That amounted to massive savings of taxpayer dollars, Lueken notes (bullets removed from quote below):

We estimate that the 48 education choice programs studied here saved state and local taxpayers between $19.4 billion and $45.6 billion since their inception through FY 2022. This range represents $3,300 to $7,800 per student participant. Given that all 48 programs included in the analysis were running for at least five years by the end of FY 2022, the true impact is likely closer to the long-run estimate of $45.6 billion. (Table ES-1, displayed at the end of this executive summary).

For each dollar spent on education choice programs, these programs generated between $1.70 and $2.64 in estimated fiscal savings, on average. These savings result from many of the students who exercised choice who would have been enrolled in a public school if these choice programs did not exist—and would have enrolled in public schools at a much larger taxpayer cost.

On average, if at least 57% of students who participate in choice programs switched from public to private schools, these programs saved taxpayer dollars overall. For programs that have been in operation a long time, this break-even rate may be as low as 36%. These break-even switcher rates are significantly lower than switcher rates observed in random assignment studies (85% to 90%, on average), which implies significant savings from choice programs.

Meanwhile, although the traditional public schools lose students, the choice programs generally ensure that they retain some of the funding that the departing students were costing the taxpayers. As a result, the traditional public schools often gain in per-student funding when states implement choice programs:

Districts can benefit too, as their funding is not solely determined by student enrollment, allowing districts to retain a portion of the per-pupil funding even when students depart. For instance, in Georgia and Indiana, districts keep all local revenue, with only state funding being enrollment-dependent.

Furthermore, many states have “declining enrollment adjustments” or “hold harmless” clauses in their funding frameworks. These and similar provisions ensure that districts receive all or most of their previous basic education funding, based on figures from the prior year or another historical benchmark, regardless of any decreases in student numbers. These funding protections mitigate the financial effects of losing students to education choice programs, or losing students for any other reason.

In addition to the fiscal cushion the (already vastly overpriced) government schools receive, the increased competition for students apparently creates education benefits for the students who remain in the traditional public schools. Lueken writes,

Researchers have conducted several systematic reviews of research on competitive effects, including a meta-analysis. All these reviews conclude that students who remain in district schools that face increased competition from choice programs experience modest and positive learning gains. Contrary to claims that district school students are harmed by increased education choice, the evidence suggests the opposite.

Education choice saves money without doing any harm at all to students whose parents choose to keep them in traditional public schools, Lueken concludes:

[I]t is hard to argue that expanding educational opportunities through education choice programs would financially harm public school systems. Numerous studies have explored the impact of education choice programs on students in nearby public schools. Almost all report that students who stay in district schools see modest and positive improvements in their learning. This evidence contradicts the claims that students in district schools suffer when education choice expands, suggesting instead that the opposite is true, as students who remain in district public schools experience modest academic gains and even more resources devoted to their education via fiscal savings from choice programs.

Choice schools are generally not unionized, which helps explain why we keep hearing inaccurate complaints about public schools being defunded by choice programs and innocent children being harmed. If education choice becomes the norm and families take advantage of their new options, the teachers unions could lose tens of thousands or even hundreds of thousands of members—and their union dues.

Those unions gave more than $55 million in political contributions in 2022, plus more than $48 million in “soft/outside money,” according to Open Secrets. Democrats received fully 99.47 percent of that political money, and only 0.38 percent went to Republicans. That aligns with Democrats’ furious opposition to choice. It also suggests that any Republican who opposes school choice receives a large chunk of that 0.38 percent or is probably a fool.

Education choice is one of those exceedingly rare policy issues where a politician can do what is not only right but also ultimately beneficial in political terms.