Of the school choice options available to many U.S. families today, few embody the spirit of “power to the parents” quite like education savings accounts (ESAs). ESAs allow parents who opt out of public schools to use taxpayer funds to purchase the educational resources of their choice for their children, ranging from private school tuition to homeschooling supplies to after-school tutoring and beyond. Advocates insist that ESAs represent a “new frontier in education,” where parents can handcraft their child’s academic journey à la carte, without navigating the constraints of the public school system—opening the door to hybrid homeschooling, microschools, and other versions of “unbundled learning.”
It sounds promising in theory, but there’s a big hitch: It is impossible to tie à la carte services to whether kids are actually learning anything. Some may try to deem this a non-issue issue, contending that “accountability to parents” is enough. But when taxpayer funds are involved, that can’t be the only answer. The reason we pitch in to pay for public education is that all of us benefit when all children—not just our own kids—are well-schooled and can access the knowledge needed to make their way successfully through life, ultimately ensuring the prosperity and security of the larger society.
To be clear, it’s quite possible, and in our view essential, to hold private schools accountable when parents use ESAs to pay tuition (which so far is how most of the money is, in fact, used). In a future post, we will tackle how such accountability can and should work for these schools. State lawmakers can also insist on an evaluation of an ESA program as a whole—which should include testing a sample of participating students and comparing their progress with similar peers.
But what sorts of quality control measures might prove feasible for à la carte services—in other words, everything ESAs can fund besides private school tuition? To begin to address this question, let’s examine the regulatory measures that some of these programs use to ensure basic accountability, such as protecting against waste, fraud, and abuse.
A look at financial protections
Like any taxpayer-funded initiative, ESAs can’t operate successfully without some guardrails. Of course, any facility serving children must ensure their physical safety, adhering to fire and health codes. But programs must also take steps to prevent vendors from defrauding families or wasting public money on services with no educational value—and they must ensure that parents can’t misuse their allotted funding.
Receipt submissions
States can help prevent fraud by designating an office to which participating families must submit receipts for their ESA purchases. This can take two forms: The state can ask parents to pay for their educational expenditures upfront, then provide reimbursements—or the state can distribute prepaid debit cards for families to use. Both have pluses and minuses. For example, asking parents to front the costs for their ESA purchases discourages wasteful spending, but it may also inhibit families with minimal disposable income from fully participating in the program.
In practice, however, this oversight system has led to major problems. One such example can be found in Arizona, where the department reviewing these receipts became so severely backlogged that wasted funds went unnoticed for months.
Limits on prepaid debit cards
Along with a requirement to submit receipts, Arizona and other states have tried restricting families’ prepaid debit cards so they can only be used with certain vendors or on particular products. (This is akin to health savings account cards that only work at pharmacies or similar establishments.) These limits help prevent parents from spending ESA money on non-educational expenses, which might otherwise remain undetected for months.
Yet this version, too, has shortcomings. Parents may find the list of vendors too restrictive, ESA offices may struggle to keep the provider list up-to-date, and vendors may inflate their prices knowing that families are limited in the sellers from which they can choose.
Online marketplaces
The most popular method to promote accountability in ESA programs is maintaining Amazon-style platforms to connect parents with vendors. Approved providers can list their goods and services on these online marketplaces, and families can peruse and purchase the products of their choice. Typically, these platforms are developed and managed by third parties, like ClassWallet in New Hampshire or MyScholarShop in Florida.
This approach offers distinct benefits. It eliminates the need for state staff to manually review receipts, and because parents can leave reviews of the products they have purchased, these platforms offer another layer of transparency for families.
But what about results?
These measures help to prevent waste and fraud, but they don’t really get to the heart of the matter: holding providers accountable for improving student learning and other important outcomes. So far, unfortunately, it appears that this form of accountability may simply be out of reach for à la carte services.
That’s because of what we might call the “à la carte accountability conundrum.” It is all but impossible to measure the true effectiveness of products from ESA vendors (again, save for private schools) because of the varied and fragmented nature of these offerings. With every child using a unique set of tools, it’s extraordinarily difficult to determine which specific services directly impact students’ academic performance—and how effective they are. Variations in the quality, duration, and frequency of these services make attributing academic gains to any single factor even harder. As a result, trying to draw clear connections between specific ESA purchases and measurable outcomes like test scores feels like an exercise in futility.
We learned this lesson two decades ago, when the federal government’s No Child Left Behind Act included a Supplemental Educational Services initiative, affording parents voucher-style choices among tutoring programs. Though that program was limited to tutoring in reading and math, evaluators struggled to identify the impact of a few dozen hours of instruction from different vendors on students’ test scores. Now expand that problem to the ever-growing universe of expenses funded by ESAs, and results-based accountability becomes even tougher to gauge and harder to do anything about.
Is there a solution? Today, probably not. But there might be alternatives. One option is to consider offering low-income and working-class families enrichment savings accounts instead of education savings accounts. These funds would not be designed to replace schools but to supplement them—helping children take part in sports, the arts, summer camps, and more. Such a program wouldn’t be paid for from existing education budgets but could be a brand-new expense, perhaps funded at the federal level. These accounts might be kept small, maybe $500 or $1,000 per child. There would be no expectation that the funds would boost academic learning because their purpose would be to close the “enrichment gap,” not address core educational challenges. All low-income and working-class families would be eligible to receive this type of ESA, not just those opting out of their public schools.
The idea of à la carte education, supercharged by education savings accounts, has captured the imagination of school choice advocates far and wide. No doubt families (especially those already homeschooling) welcome the “free money,” and elected officials are happy to reap the electoral rewards. But as a sustainable strategy to promote choice and innovation, publicly funded “unbundled learning” is hard to justify. Especially if we’re talking about large ESAs, directing tens of thousands of dollars a year to families with two or three children, taxpayers will sooner or later demand to know what they are getting for the investment. The answer will inevitably be “we don’t know.” That’s just not good enough.
