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David Smole, Congressional Research Service
Updated August 1, 2003
School Choice
According
to the National Center for Education Statistics (NCES), during the 1990s, the
proportion of the nation's school children attending schools of choice increased
modestly, with most of the increase due to greater numbers of children attending
chosen public schools. Across all income levels, greater proportions of students
were reported to be attending public schools of choice in 1999 than in 1993.
However, among students attending schools of choice (whether public or private),
those from lower-income families were more likely to attend a public school of
choice, whereas those from higher-income families were more likely to attend a
private school. Despite modest growth in the exercise of school choice,
three-quarters of elementary and secondary school students still attended a
public school to which they were assigned. (U.S. Department of Education,
National Center for Education Statistics, Statistical Analysis Report, Trends in
the Use of School Choice: 1993 to 1999, May 2003.)
The
federal government, and many states and localities have implemented numerous
policies and programs that have enhanced parents' ability to select the schools
their children attend, contributing to the modest growth in the exercise of
school choice observed over the past decade. While many school choice policies
and proposals have become popular and broadly supported approaches toward
increasing students' access to diverse educational opportunities and effecting
elementary and secondary education reform, others remain controversial and
divisive.
This
issue brief provides an overview of current local, state, and federal policies
and programs that support school choice and identifies and summarizes recent
federal school choice legislation. It is updated regularly to reflect
congressional action on legislation concerning school choice and related
developments in states and localities.
Methods
of Supporting School Choice
Students
from families with sufficient resources and capabilities may be considered able
to choose from among the panoply of school options. For many students, however,
the extent to which they and their parents can exercise school choice depends
upon the scope of public policies and programs implemented at the federal,
state, and local level. While existing federal, state, and local programs that
support school choice with public resources have a variety of features, they
generally fall into six broad categories.
Intradistrict
Public School Choice. Students may choose among some or all the public schools
within their home school district. Magnet schools, created to promote voluntary
school desegregation, and alternative schools also are examples of intradistrict
choice options.
Interdistrict
Public School Choice. Students may choose to attend public schools outside their
home school district. Included in this type are special school districts, such
as secondary education districts providing vocational or technical education and
training.
Charter
Schools. Students may choose to attend public schools operating under charters
granting them greater operational autonomy in exchange for increased
accountability for outcomes. A charter school may be a school within a local
educational agency (LEA) or may be considered its own independent LEA. A virtual
charter school is one that functions through the exchange of information
electronically between student and teacher, such as from a student's home and
which has no common education facility.
Tax
Subsidies. The federal and certain state tax codes provide for deductions or
credits supportive of school choice. These include the exemption from taxation
of income used for elementary and secondary education expenses, such as through
federal Coverdell ESAs and certain state deductions or credits for educational
expenses or contributions to school tuition organizations (STOs), which provide
private scholarships to children. The federal tax code also allows deductions
for interest paid on a home mortgage, as well as state and local taxes. These
deductions act to subsidize the cost of families exercising their choice to
reside in desired school districts or attendance areas, which often have higher
property values and higher amounts of deductible local property taxes or home
mortgage interest payments.
Subsidies
to Private Schools. Private schools are able to provide educational services at
more attractive prices partially as a result of the provision of selected
publicly funded services to private school pupils (e.g., transportation, health,
and special education services), and the deductibility from taxation of certain
contributions received by them or their parent organizations.
School
Vouchers and Supplemental Educational Services. Parents may be granted vouchers
that they may use to pay a portion of or the total cost of full-time attendance
at a private school. Vouchers are sometimes referred to as scholarships or
tuition certificates. Parents also may be granted the opportunity to select the
provider of supplemental educational or tutorial services for their children in
much the same way as under a voucher program.
Privately
financed choice options also exist. For example, programs have been established
in a number of localities by private groups (such as STOs) to help pay tuition
and related costs of private elementary and secondary school attendance for
pupils, most of whom come from low-income families. Some parents also choose to
home school their children.
Current
State and Local School Choice Programs Involving Private Schools
Of policies and programs currently operating or proposed in states or localities, most involve only public schools -- whether selected schools within an LEA or school district, all schools in an LEA, all public schools in a multi-LEA region or state, or charter schools. Currently, two localities, Milwaukee and Cleveland; and two states, Florida and Colorado, have choice programs which provide vouchers for attendance at private (including religiously affiliated) schools for a limited number of pupils.
The
Milwaukee Parental Choice Program provides state funding for low-income students
to attend private schools located within Milwaukee. When first implemented in
schoolyear1990-1991, choice was limited to nonsectarian private schools. In
the1994-1995 school year, the program was expanded to include religiously
affiliated schools. Students in kindergarten through grade twelve are eligible
to participate. Under the program, parents receive vouchers to cover the
school's per-pupil costs (tuition, operating expenses, debt service, etc.),
which they then submit to the school for payment. During the 2002-2003 school
year, 11,621 students and 102 schools participated in the program with the value
of the voucher set at the lesser of $5,783 or the private school's per-pupil
costs (State of Wisconsin. Department of Public Instruction. Milwaukee Parental
Choice Program (MPCP): MCPC Facts and Figures for 2002-2003. February 2003).
The
Cleveland Scholarship and Tutoring Program, first implemented in the 1996-1997
school year, allows students in kindergarten through grade 3 to apply to receive
scholarships to enable them to attend a private school located within the
boundaries of the Cleveland Municipal School District or a public school in an
adjacent district, or to receive tutoring grants for tutorial services delivered
by a private or governmental provider. Students from low-income families are
given priority in participating in the program. Once accepted, students may
continue to participate in the program through higher grades. Parents of
students attending private schools or receiving tutorial services are reimbursed
by the state for an amount up to either 90 percent of the cost of tuition (for
families with incomes below 200 percent of the poverty line), or 75 percent (for
families with incomes at or above 200 percent of the poverty line), with the
maximum K-8 scholarship amount set at $3,000 for the 2003-2004 school year. The
program was recently expanded to allow students to continue to receive
scholarships worth up to $2,700 for high school tuition. (Ebony Reed, "High
School Freshmen Can Use Vouchers This Fall," The Plain Dealer, June 30,
2003). Participating private schools must agree to charge low-income parents
tuition of no more than 10% of the scholarship amount, all of which may be
satisfied by in-kind contributions or services. During the 2002-2003 school
year, 5,147 students received tuition scholarships, and 1,112 received tutoring
grants (SchoolChoiceInfo.org. "Cleveland Scholarship and Tutoring Program
Student Enrollment." (Based on data reported by the Ohio Department of
Education) at: [http://www.schoolchoiceinfo.org/facts/index.cfm?fpt_id=5&fl_id=2].)
According to testimony in Zelman v. Simmons-Harris, no adjacent public school
districts have elected to accept students under the program.
In
addition to these two local voucher programs, in 1999, the state of Florida
implemented Opportunity Scholarship legislation, which authorizes the provision
of vouchers to pupils in grades K-12 assigned to low-performing public schools
that receive an `F' rating for any 2 years during a 4-year period. The vouchers
may be used to pay either the full cost of private school tuition or the costs
of enrollment in another public school in the same or a neighboring county. For
school year 2003-2004, nine public schools have been designated as failing
schools. The amount of funding available for attendance at private schools is
based on that generated by the child for the public schools -- generally between
$3,600 and $4,300. Participating schools must accept the scholarship as payment
in full for tuition and fees. School districts are required to provide
transferring students with transportation to public schools within the same
district, but not to out-of-district public schools nor to private schools. (Floridachild.org,
"Opportunity Scholarships -- The Basics for Families," at: [http://floridachild.org/opportunityscholarships/basics.html]).
Florida
also operates the John M. McKay Scholarships Program for Students with
Disabilities, distinct from the Opportunity Scholarship Program. Under this
program, all pupils with disabilities who attend Florida public schools may
receive a voucher to attend a public or private school of their family's choice.
The value of the voucher is based on the amount of aid that is generated by that
child and is dependent on the nature of the pupil's disability. Generally it
ranges between $4,500 and $21,000. (Alan Richard, "Florida Sees Surge in
Use of Vouchers," Education Week, September 5, 2002). If the voucher amount
is insufficient to cover the full cost of tuition and the school does not accept
the voucher as payment in full, families are permitted under the program to make
additional payments to the private school, although most families pay either
nothing or less than $1,000 above the voucher amount. During the 2002-2003
school year, 9,202 students participated in the program. (J.P. Greene and Greg
Forster, Vouchers for Special Education Students: An Evaluation of Florida's
McKay Scholarship Program, (New York: Center for Civic Innovation, No. 38, June
2003).
In
April, 2003, the Colorado Opportunity Contract Pilot Program, a state-wide
school voucher program was enacted into law. School districts with at least
eight schools that received "low" or "unsatisfactory"
ratings according to state standards must participate in the program, while
other school districts may participate voluntarily. Under the program, parents
of students who are eligible for free or reduced-cost lunches and who are
identified as low- performing students according to academic assessments will
become eligible to enter into an "opportunity contract" with their
child's school district to receive a voucher for payment toward their child's
tuition at a private school. To be eligible, students also must have been
continuously enrolled in a public school the year prior to participating in the
program, or be entering kindergarten. The value of the voucher is the lesser of
the educational cost per pupil at the private school or a specified percentage
of the sending school district's per-pupil operating revenues, varying by grade
level: 37.5% for kindergartners, 75% for students in grades 1-8, and 85% for
students in grades 9-12. After allocating funds to voucher recipients, sending
school districts are able to retain any remaining per-pupil operating revenues
(e.g., 63.5%, 25%, or 15%). In the first year of the program, a maximum of 1% of
a district's students may participate in the program. Over subsequent years, the
percentage that may participate gradually increases to 6%. (Title 22, Colorado
Revised Statutes, Article 56).
Some
states support private school choice through tax policy. Arizona provides tax
credits to individuals for contributions to STOs that provide scholarships to
students to meet the costs of private school attendance. Florida provides tax
credits to corporations that fund organizations providing scholarships to
low-income children. Pennsylvania also grants corporations tax credits for
contributions to organizations that award scholarships allowing children to
attend the school of their choice. Additionally, Illinois and Iowa allow
individuals to claim a tax credit for certain educational expenses, including
private school tuition; and Minnesota allows tax credits and deductions for
similar expenses. (Robert E. Moffit, Jennifer J. Garrett, and Janice A. Smith,
School Choice 2001: What's Happening in the States, Washington, D.C., The
Heritage Foundation, 2001. Also see National School Boards Association, at [http://www.nsba.org/novouchers/vsc_state.cfm].)
Colorado
was the first state to enact a school choice program since the Supreme Court
decided Zelman v. Simmons-Harris; however, legislatures in a number of other
states also are considering school choice legislation. In addition, several
existing school choice programs are being challenged in the courts. Some of
these challenges involve state constitutional prohibitions against the provision
of state aid to support religious activities, such as education. It is unlikely
that these cases will be decided until the Supreme Court hears Davey v. Locke,
an appeal of a lower court ruling which found a provision of the Washington
State constitution, which prohibited a state postsecondary education scholarship
from being used to support the study of theology, to be in violation of the free
exercise clause of the First Amendment. The Supreme Court's ruling on Davey v.
Locke likely will affect elementary and secondary education school choice
programs that involve religiously affiliated schools.
Current
Federal Choice Programs
Currently,
elementary and secondary education school choice is supported through several
ESEA programs and through the federal tax code. The following provides a brief
description of current federal school choice programs. Where appropriate,
program descriptions include FY2003 appropriation amounts.
Elementary
and Secondary Education Act Programs (as Amended by P.L. 107-110).
Local
Educational Agency Plans (ESEA Title I-A). Schools with 25% low- income
enrollment may be granted a waiver allowing participation in Title I-A if they
are involved in desegregation programs under which students change schools (the
threshold otherwise is generally 35% or higher). This provision was added to
Title I-A in 1994.
School
Choice as a Component of School Improvement (ESEA Title I-A).. Pupils attending
public schools that fail to meet adequate yearly progress (AYP) standards for
two consecutive years must be offered the choice of attending a higher
performing public school within their LEA, unless prohibited by state or local
law or policy. The lowest achieving children from low-income families must
receive priority in choosing alternate schools. The U.S. Department of Education
has issued regulations prohibiting LEAs from using lack of capacity as a reason
for denying students the opportunity to transfer to a school of choice (34 CFR
200.44(d)). Schools identified for improvement also are required to implement
school improvement plans.
Pupils
attending public schools that fail to meet AYP standards for a third consecutive
year must continue to be offered the option of attending another
higher-performing public school within the same LEA. Pupils from poor families
who continue to attend a school that has failed to make AYP for a third
consecutive year must be offered supplemental educational services from a
non-profit entity, a for-profit entity, or the LEA, unless such services are
determined by the state education agency (SEA) to be unavailable in the local
area. The SEA is required to maintain a list of approved supplementary education
service providers (including those offering services through distance learning)
from which parents can select. In instances where a school fails to meet AYP
standards for 4 consecutive years, it must be identified for corrective action.
If, after a year of corrective action, the school still does not improve, the
LEA may begin planning to restructure the school, with one option being to
reopen the school as a charter school. In instances where there are no schools
in the LEA that have made AYP, LEAs are encouraged to enter into cooperative
agreements with surrounding LEAs to enable students to transfer to a successful
public school. LEAs may be required to expend an amount equal to 20% of their
Title I-A grants on transportation for public school choice and supplemental
educational services.
In
instances where an LEA fails to make AYP for 2 consecutive years, the SEA is
required to identify it for improvement, and require the LEA to develop and
implement a new LEA education plan, with technical assistance provided by the
state. If an LEA is identified for improvement, the SEA also has the option of
authorizing students attending a school in that LEA to transfer to a
higher-performing public school in a different LEA, with transportation costs
provided by the sending LEA. If an LEA does not meet AYP for 4 consecutive
years, the SEA is required to take corrective action, which may consist of
requiring the LEA to provide students the option of attending a
higher-performing school in another district.
Innovative
Programs (ESEA Title V-A). As means of achieving education reform, states may
use Innovative Programs funds for the planning, design, and implementation of
charter schools. LEAs may use Innovative Programs funds for magnet schools; for
the planning, design, and implementation of charter schools; for school
improvement activities; to promote, implement, or expand public school choice;
and for supplemental educational services. For school year 2003-2004, $382.5
million is appropriated for these programs (FY2003: $97.5 million annual
appropriation, and $285 million advance appropriation).
Public
Charter Schools (ESEA Title V-B-1&2). The Charter Schools Programs support
increasing the number of charter schools by providing financial assistance for
their planning, design, and implementation. Charter schools are authorized
through charters entered into by different community groups and school
authorities. They are authorized by law in 40 states, the District of Columbia,
and Puerto Rico. In exchange for exemption from significant state and/or local
rules, these schools are expected to be held accountable for achievement of
agreed-upon objectives. The Charter Schools Programs require that all students
in a community served by a charter school be given an equal opportunity to
attend.
UnderTitleV-B-1,the
first $200 million appropriated for the Charter Schools Programs are reserved
for grants to states and eligible applicants for the planning, design, and
implementation of public charter schools and for the dissemination of
information about charter schools; for state revolving loan funds; and for
national activities. The next $100 million appropriated for Title V-B-1 is
reserved for per-pupil facilities aid programs, in which competitive grants are
awarded to states for purposes of establishing and administering programs
dedicated to funding charter school facilities, in whole or in part, on a
per-pupil basis. Fifty percent funds appropriated in excess of $300 million are
reserved for each of the two uses. For FY2003, $198.7 million is appropriated
for Title V-B-1.
Title
V-B-2 authorizes funding through FY2003 for grants to public or private entities
(or a combination of the two) for the development of credit enhancement
initiatives to assist charter schools in acquiring, constructing, or renovating
facilities. (A 1-year extension of the program is authorized under the General
Education Provisions Act (GEPA) (20 U.S.C. 1226a)). For FY2003, $24.8 million is
appropriated. For additional information on funding for charter school
facilities, see CRS Report RL31128, Funding for Public Charter School
Facilities: Federal Policy Under the ESEA.
Voluntary
Public School Choice Programs (ESEA Title V-B-3). These programs support school
choice by providing competitive grants for transportation services in support of
public school choice, and allow funds also to be used for tuition transfer
payments, school enhancement in schools receiving transfer students, and public
education campaigns. For FY2003, $25.8 million is appropriated for these
programs.
Magnet
Schools Assistance (ESEA Title V-C). Magnet schools are schools with special
programmatic and other features, and are designed to encourage voluntary
desegregation through the mechanism of parental choice. The Magnet Schools
Assistance program supports school choice by offering students the opportunity
to attend a public school with a special curriculum that attracts substantial
numbers of students from differing racial backgrounds. For FY2003 $109.3 million
is appropriated for these programs.
Fund
for the Improvement of Education (ESEA Title V-D-1). The Fund for the
Improvement of Education (FIE) provides the Secretary authority to support
nationally significant programs aimed at improving the quality of elementary and
secondary education at the state and local levels. Programs may be carried out
directly by the Secretary, or through grants or contracts. Specifically
authorized uses of FIE funds include, among others, the exploration of state and
local public school choice programs. For FY2003, $318.1 million is appropriated
for FIE programs.
School
Choice Offered to Pupils Attending Unsafe Schools. Each state receiving ESEA
funding is required to allow pupils who attend chronically unsafe schools and
those who are victimized on the grounds of an elementary or secondary school to
transfer to a safe public school within the LEA.
Funding
Allocations for Services to Students Attending Private Schools ESEA. Funds
provided under several programs are required to be used to provide certain
education services, on an equitable basis, to eligible pupils enrolled in
private schools.
Coverdell
Education Savings Accounts. On June 7, 2001, the President signed into law P.L.
107-16 (H.R. 1836), the Economic Growth and Tax Relief Reconciliation Act of
2001; and on July 26, 2001, P.L. 107-22 (S. 1190). This legislation provides
that Coverdell ESAs (previously Education Individual Retirement Accounts, which
were investment accounts for saving to meet higher education expenses) be
renamed and extended to cover elementary and secondary education expenses.
Annual contributions to Coverdell ESAs previously were limited to $500, and
distributions from these accounts excluded from gross income if used for
qualified higher education expenses. P.L. 107-16 increases the annual
contribution limit to $2,000 and expands qualified uses of distributions to
include certain elementary and secondary education expenses at public, private,
or religiously affiliated elementary or secondary schools. These changes affect
tax years beginning after December 31, 2001 and will lapse after December 31,
2010. The Joint Tax Committee estimates that from 2002-2006, tax expenditures
for the exclusion from taxation from earnings on Coverdell ESAs will total $2.5
billion (Joint Committee on Taxation. Estimates of Federal Tax Expenditures For
Fiscal Years 2002-2006. JCS-1-02. January 17, 2002. p. 24). For further
information, see CRS Report RS20289, Education Savings Accounts for Elementary
and Secondary Education.
This document is not necessarily endorsed by the Almanac of Policy Issues. It is being preserved in the Policy Archive for historic reasons.