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By Peter Jackson

Like many proponents of a school voucher system, I first learned of them from Milton and Rose Friedman’s book Free to Choose. And as anyone who remembers reading FTC can tell you, the system envisioned by the Friedmans was, first and foremost, a universal system: every student got a voucher redeemable for tuition at the school of their choice. The ensuing competition amongst schools—even public schools—would force them all to deliver the quality customers want or risk insolvency. The whole idea was to replace the political imperatives which currently drive public school systems to spend enormous amounts of money attaining mediocrity with the market imperatives famous for producing the quality and efficiency customers demand in the normal marketplace.

It certainly seemed like a simple enough idea at the time. But as voucher proponents began to agitate for change, they were met with immediate and forceful resistance organized by the teachers’ unions and their political allies in the Democratic Party. School voucher proponents took the conservative route: knowing that the idea would be controversial, these school choice groups sought to set up proof-of-concept experiments within school systems, often involving mainly poor and minority-dominated schools, in an attempt to demonstrate what there was to be gained by injecting choice into the system. This strategy turned out to be a miscalculation as the enemies of change took advantage of every opportunity to limit the scope of any voucher experiment while simultaneously mounting unceasing political attacks on the rationale behind the school choice concept. What has resulted to date has been a wholesale political defeat of school choice that has transcended even the expectations of the anti-choice forces. Today, ask anyone on the street what school vouchers system is and they are most likely to respond that it is a program designed to subsidize the private school educations of the children of the rich, or a system designed by religious fundamentalists to intentionally undermine the public school system. Today, even most Republicans shun “vouchers.”

The Friedmans’ system—designed to improve all primary and secondary education in America from the bottom up by forcing bad schools out of business instead of allowing them to continue maleducating generation after generation of underprivileged children as the current system does—has been defeated by politics. But even so, the enemies of choice make it a point to never miss an opportunity to throw another shovel-full of dirt on vouchers’ grave. But by mounting a purely political attack, what opponents of vouchers have so far failed to do is demonstrate any actual weakness in the concept. If anything, public perception and understanding of free markets and market forces has increased considerably over the past thirty years as socialism has lost all of its remaining credibility and markets have produced startling advances in innovation, quality, as well as equally startling increases in affordability of goods and services. Yet in spite of the fact that there really is little or no actual doubt that market competition would force schools to improve just as it does the producer of virtually every other good and service, and that the public now more than ever generally perceives our government-run school systems to be antiquated if not backward, there are still special interests and ideologues whom insist that we continue to produce education for our children in the same manner that the Soviets tried to produce soap. Thus, the stupefying failure of the current system and the permanent damage to society that this failure has wrought continue to perpetuate themselves unmitigated.

In politics, to the winners go the spoils, so—let us not speak of vouchers again! Instead, let’s take it to the next level while mindful of what we’ve learned before. One of the primary weaknesses of Milton Friedman’s original idea was that even though vouchers re-established accountability between the schools and students and their parents, vouchers, being “free,” contained no price competition mechanism providing any type of downward pressure on tuitions and the institutional spending embedded within them. Under a universal voucher program, each school would have every incentive to automatically charge 100% of the value of the voucher to spend on whatever they thought would produce the most customers for themselves. Whereas this situation provides for posh schooling for everyone, it also locks us into ever-rising education costs.

In lieu of vouchers or the direct funding of government-run school systems, state governments should establish universal student-owned tuition accounts (SOTAs) for every resident child in their state. Universal means that each student in the state gets one; each and every student, period. These accounts would come with an individual account number and are wholly owned by students themselves until they reach the age of nineteen, or twenty-two, or whatever age is determined by the state legislature. Each year the state deposits into each student account a sum of money determined by the state legislature as sufficient to cover the tuition costs for that student for that year. The amount will be the same for each student, with additional monies made available as per the state legislature to compensate for given students’ special needs, as well as costs associated with differing demographics between student locales, such as, for example, cost differentials between rural and urban counties or districts.

Once funds have been allocated to student accounts, those funds become the property of the students themselves, thus the state government, including the legislature, can not retrieve funds from them once they are allocated. Funds are however restricted, payable only as tuition to state registered public or private education institutions, and perhaps, should the state legislature approve, for home-schooling curricula materials. Optimally, institutions will need only meet a few broad criteria to register for eligibility to receive funds from student accounts, such as taking students on a first come first served basis to prevent onerous discrimination. The state or individual districts may even opt to manage admissions for the purpose of preventing discrimination against students, however state legislatures may decide certain types of institutions, such as those that want to cater to special-needs students or provide same-sex education environments, may discriminate in otherwise neutral ways.

Since distributed funds remain the property of individual students, any funds not spent in any given year may be saved and spent on tuition in later years, perhaps even earning a small amount of interest for the account. It is this “carryover” feature that will provide the price competition missing from a “use it or lose it” voucher system. Students and their families will have an incentive to compare prices and services in an attempt to save for future schooling. Some states may even choose to leverage this mechanism for providing some level of government funded post-secondary education for their students.

In order to keep both public and private schools from experiencing arbitrary fiscal difficulty, institutions must be free to determine tuition pricing and any non-scholastic services to be provided such as transportation, extra-curricular activities, and the like. But with this freedom must also come the responsibility of fiscal solvency. In order for institutions to be free to succeed, they must also be free to fail as well.

Since the 2002 Zelman v. Simmons-Harris Supreme Court decision, transitioning from a monolithic government-run primary and secondary school system to a choice system based on SOTAs may very well go a long way to extinguishing quite a number of perennial social controversies which are wholly attributable to our current government-run models. A list of these issues which could virtually disappear under a SOTA system are:

• School prayer and the recitation of the Pledge of Allegiance
• Textbook controversies
• Racial proportionality
• Fair funding controversies
• Various other Establishment Clause issues

Many of these controversial issues cost our current system significant amounts of money spent on litigation and compliance with various laws and court rulings, money that under a SOTA system could be reinvested in students and the teaching environment.

As far as costs go, the worst failing of any school system can only be that some percentage of students are simply not taught. Given the drop-out rates and literacy rates our current Soviet-style system produces, it’s hard to imagine a choice system producing even a similar outcome, much less a worse one, as parents are able to easily take their children from failing schools and move them to better ones, and failed schools aren’t propped up as they are in the current system to continue damaging children’s educations, but are forced to close their doors instead. The truth is that our current system serves students so poorly that when opponents of school choice charge that choice will “destroy public education,” the first question that comes to mind is if SOTAs did destroy public education, how would we be able to tell?

The “seed of its own destruction” which our current public school paradigm carries within itself is the fact that public schools, being public schools, in the name of fairness and political accountability are more or less required to be all things to all people—literally, each and every one. Such an all-encompassing injunction is simply beyond the means of any institution, public or private, and therefore in practice is little more than a recipe for guaranteed failure. A privatized system such as the one encouraged via a SOTA system relieves each individual institution of this burden, allowing schools to become efficient through diversification and specialization, thus bringing—finally— the well-understood benefits of division of labor and comparative advantage to the enterprise of American education.