Education Matters US

Despite claims that school choice drains money from public schools, a new study by the Milton and Rose D. Friedman Foundation shows that private schooling is more efficient, producing savings for both public schools and state budgets.

Key findings of the report include:

* School choice programs saved a total of about $444 million from 1990 to 2006, including a total of $22 million saved in state budgets and $422 million saved in local public school districts.
* Every existing school choice program is at least fiscally neutral and most produce a substantial savings; every school except 3 (1 in Utah, 2 in Maine) has produced at least $1 million in savings.

Further:

* In nearly every school choice program, the dollar value of the voucher or scholarship is less than or equal to the state’s formula spending per student, meaning states are spending the same amount or less on students in school choice programs.
* In addition, when a student uses school choice, the local public school district no longer needs to pay the instructional costs associated with that student, but it does not lose all of its per-student revenue, because some revenue does not vary with enrollment levels.
* Instructional spending per student has consistently gone up in all affected public school districts and states; school choice has not prevented those states and districts from spending more on the students who remain in public schools.

Source: Susan L. Aud, “Education by the Numbers: The Fiscal Effect of School Choice Programs, 1990-2006,” Milton and Rose D. Friedman Foundation, April 2007.

New Zealand had an education system that was failing as well. It was failing about 30 percent of its children – especially those in lower socio-economic areas. We had put more and more money into education for 20 years, and achieved worse and worse results.

It cost us twice as much to get a poorer result than we did 20 years previously with much less money. So we decided to rethink what we were doing here as well. The first thing we did was to identify where the dollars were going that we were pouring into education. We hired international consultants (because we didn’t trust our own departments to do it), and they reported that for every dollar we were spending on education, 70 cents was being swallowed up by administration. Once we heard this, we immediately eliminated all of the Boards of Education in the country. Every single school came under the control of a board of trustees elected by the parents of the children at that school, and by nobody else. We gave schools a block of money based on the number of students that went to them, with no strings attached. At the same time, we told the parents that they had an absolute right to choose where their children would go to school. It is absolutely obnoxious to me that anybody would tell parents that they must send their children to a bad school. We converted 4,500 schools to this new system all on the same day.

But we went even further: We made it possible for privately owned schools to be funded in exactly the same way as publicly owned schools, giving parents the ability to spend their education dollars wherever they chose. Again, everybody predicted that there would be a major exodus of students from the public to the private schools, because the private schools showed an academic advantage of 14 to 15 percent. It didn’t happen, however, because the differential between schools disappeared in about 18-24 months. Why? Because all of a sudden teachers realized that if they lost their students, they would lose their funding; and if they lost their funding, they would lose their jobs. Eighty-five percent of our students went to public schools at the beginning of this process. That fell to only about 84 percent over the first year or so of our reforms. But three years later, 87 percent of the students were going to public schools. More importantly, we moved from being about 14 or 15 percent below our international peers to being about 14 or 15 percent above our international peers in terms of educational attainment.