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Published in Print: March 25, 2015, as Eligibility Rules Fuel Growth of Indiana's Voucher Program

Indiana's Private-School-Voucher Program Expands Rapidly

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Participation in Indiana's voucher program has exploded since it launched less than four years ago, putting the state on the leading edge of private school choice.

This year, nearly 30,000 students in Indiana are attending private schools with the help of vouchers, a number that puts it among a small pack of states offering this controversial school choice option that provides taxpayer dollars to families to help pay for private schools, most of them religious.

But none has taken off quite as fast as Indiana's.

There are several clear-cut reasons that have to do with students' eligibility for Indiana's program that help explain why it has grown so quickly. Primary among them: New rules qualify about half the state's schoolchildren for tuition vouchers, according to the Indianapolis-based Friedman Foundation for Educational Choice, a research and advocacy organization.

But other, less obvious factors also have contributed to the program's proliferation, including a relatively speedy jaunt through the court system after its legality was challenged, and policies adopted by some of the state's private schools prior to the program's launch.

"There's a degree of political timidity to bold reforms, or reforms as bold as school choice vouchers," said Brian Backstrom, a senior policy adviser with the Center for Education Reform, a Washington-based school choice research and advocacy group. He said policymakers tend to dip their toes into the water with limited voucher programs. "Indiana did a big splash."

Steady Expansion

An Indiana Department of Education report released last month further details the rapid growth of the voucher program: A little more than 29,000 Indiana students use vouchers to attend private schools this school year, a 47 percent increase from last year.

That's a big jump, but it's dwarfed by growth in previous years. The program debuted with 3,900 students in 2011-12. The number of participating students soared the next year by 134 percent, and climbed again by 117 percent in 2013-14.

No other voucher program, or any type of private-school-choice initiative launched since 2011, has reached the scale of Indiana's, according to data from the Friedman Foundation.

Other states with similar numbers of students participating in one or more voucher programs—such as Florida, Ohio, and Wisconsin—have had at least one program in place since the early 2000s. And some of those states, most notably Florida, have sizable tax-credit-scholarship programs, which provide tax benefits to businesses and individuals that donate money to support scholarships to private schools. But those also have been around for a while.

During the voucher program's brief existence, Indiana policymakers have been steadily expanding eligibility, and now roughly half of all the state's 1.1 million schoolchildren are eligible.

State lawmakers raised the threshold on income eligibility. A family of four with an annual household income of up to $67,200 would be eligible under most circumstances. For families with a child with disabilities, their annual income can be even higher.

The legislators also removed the cap on the number of students who can participate and made vouchers available to students who were already enrolled in private schools. In 2013, a new state law made students zoned to schools graded F in the state's accountability system eligible for vouchers even if they had never attended their local district school.

Opponents are very worried about that latest change, which has significantly altered the make-up of students in the program.

"Initially, the bill was passed so that you would have to at least go to your local public school first," said Teresa Meredith, the president of the Indiana State Teachers Association. "That was so that the public school had the opportunity to show the parents what they had to offer. But now what we're seeing, as much as 51 percent of students statewide who are using a voucher have never been to a public school. That is just staggering to me."

Additionally, the percentage of white students using vouchers has also climbed, while the participation of African-American, Hispanic and other minority students has dropped. Currently, 61 percent of voucher students are white, 16 percent are Hispanic, and 14 percent are black.

Quick Legal Resolution

And expansions to the program's eligibility might be costing the state more money. According to numbers first released by the state education department last June, the new eligibility rules cost the state an additional $16 million in the 2013-14 school year, compared to the first two years that vouchers were offered, and saved the state around $4 million a year.

Those savings came from stricter eligibility and the fact that the voucher scholarships are less than the state's per-pupil spending level for public schools, among other factors.

In total, voucher students were eligible to receive almost $116 million in tuition this school year, compared to $81 million last year.

Compared to other states, the voucher program's relatively quick trip through Indiana's courts—a lawsuit was filed by the state teachers' union in July 2011 and resolved by March 2013—didn't hamper growth.

"In other states, the lawsuits lingered in court," said Robert C. Enlow, the president and chief executive officer of the Friedman Foundation for Educational Choice.

"They have to say, 'You're eligible, but there's a lawsuit, and it may all come crashing down.' It's a barrier to parents, which is, in my opinion, why the unions use lawsuits."

Indiana's program also benefits from being the only one in the state, said Mr. Backstrom. He points to Ohio, which also has about 30,000 voucher students, but who are spread among five programs, the first of which was launched in 1996. Each program has different eligibility requirements based on needs or location.

"That's a little daunting for families right up front," said Mr. Backstrom. "Ohio's approach has been that when there's parental demand for a voucher program, they've created one. It's not a bad thing; it's just easier to have one universal program and then expand."

Finally, for private schools in other states, accepting voucher students means complying with a bundle of state regulations. In Indiana's case, many of its private schools voluntarily opted into an unusual state-accreditation program before lawmakers ever passed the voucher bill.

That meant those schools were already doing things like administering state tests, making the transition to accepting voucher students much easier, said Mr. Enlow. As far as the Friedman Foundation is aware, Indiana is the only voucher state with such an accreditation program for its private schools.

But some school choice advocates, like Mr. Backstrom, worry that the amount of state oversight might ultimately curb the supply of private schools willing to participate, and therefore stifle the program's growth.

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Indiana not only requires schools that accept voucher students to take state tests; it also demands thorough reporting from schools and sends government officials to observe classrooms—the only voucher state to do so, according to Mr. Backstrom.

But both Mr. Backstrom and Mr. Enlow are optimistic the program will grow, as long as there are enough private schools to meet demand.

"The voucher program has done a great job of filling empty seats in schools," said Mr. Enlow. "The issue is: How do we build new high-quality seats in new [private] schools?"

Vol. 34, Issue 25, Page 6

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