Scholarship money concept. Coins in jar with money stack step growing growth saving money investment

Shielding schools from competition comes with a cost

When educational options expand, there’s usually a big set of beneficiaries that don’t get much attention: Students who remain in district schools.

It’s one of the most consistent findings in studies of vouchers and other education choice scholarship programs. Studies have found expanding charter schools have produced similar findings. When students gain access to new alternatives, nearby public schools improve their performance. A recently published study of Florida’s growing choice programs has found this benefit grows larger as the programs mature and more students use scholarships.

This benefit rarely gets the attention it deserves. If it did, it might cause policymakers to rethink funding practices designed to shield district schools from competition.

A new policy brief from EdChoice breaks down the different approaches states use to shield districts from the impact of declining enrollment. Some of these policies are directly tied to the growth of new choice options, like Massachusetts’ law that reimburses school districts for students who leave to attend charter schools.

EdChoice authors James Shuls and Marty Lueken note that while it might make sense to insulate districts from sudden swings in funding or enrollment, policymakers should use them cautiously, because “they undermine efforts to increase educational opportunity by separating funding decisions from students.”

Put differently, limiting the fiscal pain of losing students can also weaken the signal that spurs district schools to improve. This is likely one reason why one of the few studies that did not find a private school choice program produced a performance benefit for public schools was in D.C., where public schools are “held harmless” when students leave to attend private schools using the Opportunity Scholarship Program.

A new study from Korea offers more insight. In that country, public and private schools both receive public funding, but private schools have more flexibility over decisions like hiring and firing teachers, similar to charter schools in the U.S.

However, recent policy changes introduced fully autonomous private high schools that enjoyed even more flexibility and did not receive government funding. When these new options came online, the government guaranteed funding for public and private schools, even if they lost students.

The result? There was no improvement in math test scores for public or private school students. Language test scores did improve for private-school students, but not for public-school students, and the authors suggest one likely reason: Private schools had more autonomy, and therefore more flexibility to respond to competition. Even if they weren’t at risk of losing money, they were at risk of hurting their reputations if large numbers of students opted to leave.

In other words, while it makes sense to cushion school districts against unexpected financial swings (as Florida does), districts should also have strong incentives to keep students happy (so they continue enrolling in their schools). And they should have the flexibility to mount a competitive response.


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BY Travis Pillow

Travis Pillow is Director of Thought Leadership at Step Up For Students and editor of NextSteps. He lives in Sanford, Fla. with his wife and two children. A former Tallahassee statehouse reporter, he most recently worked at the Center on Reinventing Public Education, a research organization at Arizona State University, where he studied community-led learning innovation and school systems' responses to the Covid-19 pandemic. He can be reached at tpillow (at) sufs.org.