School Choice & Charters Explainer

What Are School Vouchers and How Do They Work?

By Arianna Prothero — January 26, 2017 6 min read
Supporters of school vouchers rally in Austin, Texas, on Jan. 24, in hopes of persuading state lawmakers to approve a voucher program that would provide public money to families to help pay tuition at private and religious schools.
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Few topics stir up as much debate in the education sphere as steering public money in the form of vouchers to pay for students to attend private school. Especially now that one of the nation’s most visible supporters of school vouchers—Betsy DeVos—is President Donald Trump’s nominee to become U.S. Secretary of Education.

The subject of high-profile lawsuits and heated political rhetoric, vouchers tend to split people into two camps—those who believe they are a valuable tool for helping disadvantaged children escape failing public schools and those who charge that they strip funds from public schools without offering real opportunity to poor children.

Today nearly 30 states have vouchers or some closely related form of private school choice, according to the National Conference of State Legislatures.

What follows is an overview of the big trends, research data, and concerns associated with school vouchers. Links to additional resources are included for those who would like to dig deeper.

What Are School Vouchers and How Do They Work?

  • School voucher programs: These programs allow parents to use public funding allocated for their child’s education toward tuition at a private school of their choice, including religiously affiliated private schools. Most voucher programs start out by limiting who is eligible for them. Students with disabilities, those zoned to a failing school, or those from low-income families have been the most targeted student groups. Some states—Indiana is one—have expanded their programs to include middle-income families. Fourteen states and the District of Columbia have vouchers. But since the first modern day voucher program was launched in Milwaukee in 1990, spinoff programs have emerged.

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  • Tax-credit scholarship programs: Some states offer tax credits to entice businesses or individuals to donate to a scholarship granting organization, which then gives money to eligible students to use toward tuition expenses at a private school. To qualify, students usually have to come from a low-income family, a failing school, or have other special needs. Some states offer another variation, such as individual tax-credits or deductions. Seventeen states have tax-credit scholarships.
  • Education savings account programs: With ESAs, states set aside money usually based on per-pupil funding formulas in individual accounts for participating students. Parents or guardians can withdraw that money to spend on approved educational expenses. That may be private school tuition, but it may also be used for tutoring, online courses, transportation costs, or even some types of therapy. ESAs can also allow families to home school or cobble together a hybrid public-private education. ESAs were originally aimed at students with disabilities, but in Arizona, where the idea came from, officials have steadily expanded eligibility. Nevada lawmakers attempted to create an ESA in 2015 that was open to all students in public schools, but that program has been suspended after the state’s supreme court ruled its funding mechanism unconstitutional in 2016. In addition to Arizona and Nevada, three other states—Florida, Mississippi, and Tennessee—have ESAs.

Are School Vouchers Unconstitutional?

Have vouchers created unconstitutional entanglements between church and state since parents have used them to send their children to private religious schools? The short answer is no. In June 2002, the U.S. Supreme Court ruled that a state-enacted voucher program in Cleveland did not violate the U.S. Constitution’s prohibition on government establishment of religion. In Zelman v. Simmons-Harris, the court found that the voucher program was constitutional because it served a valid secular purpose and it was neutral to religion—in other words, parents choose which schools the money goes to, not the state.

That decision—claimed as a major victory by voucher advocates—changed the landscape of the debate. After the ruling, government-supported voucher programs popped up in the District of Columbia, Florida, Maine, Ohio, and Vermont.

But how much voucher programs can expand largely depends on state constitutions. Some states have constitutional language that explicitly bars government aid to religious institutions, generally referred to as “Blaine amendments.”

These clauses effectively outlaw private school choice. The Institute for Justice, a libertarian public-interest law firm that supports school choice, says 37 states have such amendments in their constitutions.

Although Blaine amendments may block traditional voucher programs, tax-credit scholarships and education savings accounts have proven to be effective ways to work around such constitutional restrictions.

School Voucher Debate: Pros and Cons

Supporters of vouchers argue that low-income families should have the same opportunities to choose a school—even a private school—as their wealthier peers. Proponents also contend that vouchers are beneficial to public education, because they promote market-like competitions among schools and compel all schools to work harder to improve.

Voucher critics argue that, like charter schools, vouchers siphon money from traditional public schools, leaving a large underclass of students—including many of those with special education requirements—trapped in a system without enough resources to meet their needs. At best, they say, vouchers are a “lifeboat” solution that can help a few lucky children from motivated families. They further contend that any claims that voucher programs boost gains in student outcomes are unfounded.

School Voucher Research

Not surprisingly, much of the research around vouchers is highly charged and often contradictory. Some studies have tied student participation in voucher programs to improved academic achievement, but others have not found that to be true.

A 2013 study of Milwaukee’s program—the oldest in the nation—found that using a voucher to attend a private school increased the likelihood that students would graduate from high school, enroll in college, and stay in college.

But in Louisiana, researchers more recently found that participation in that state’s voucher program “substantially reduces academic achievement.” In a National Bureau of Economic Research working paper published in 2015, researchers posited that the poor academic outcomes for voucher students may be due to low-quality private schools opting into the program.

Two separate reviews of existing research have found that, overall, voucher programs have little meaningful impact on student academic achievement either way.

A survey of economics literature on school vouchers by the National Bureau of Economic Research in 2015 found that in the aggregate studies showed that overall vouchers had inconsequential impact on how well students performed academically, but there were enough studies with positive findings to warrant more research. The review also found that, in general, school vouchers forced public schools to improve through competition.

Meanwhile, a 2011 review of a decade’s worth of voucher research by the Center on Education Policy, a Washington think tank, found that vouchers have “no clear positive impact” on student achievement and mixed results overall. The researchers further observed that voucher supporters are stressing what they see as other benefits of vouchers, such as expanded options for parents to select schools, higher parental satisfaction, and higher graduation rates.

How Popular Are Vouchers?

Less than half of Americans support school vouchers for low-income students, according to an August 2016 poll by Education Next, a journal published by Stanford University’s Hoover Institution. Forty-three percent of the 4,181 survey participants—which constituted a nationally representative sample—said they support the idea of vouchers, down from 55 percent four years ago.

Vouchers for low-income students were more popular among Democrats than Republicans, the poll found: 49 percent compared to 37 percent. Those numbers put rank-and-file party members out of step with their parties’ leaderships—Republican lawmakers tend to be the primary force pushing voucher and other private school choice policies, especially at the state level, against what is usually pretty stout opposition from Democrats.

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