Foundation Study Finds Benefits in Education Savings Accounts

December 18th, 2014 by 3 Comments

GEORGIA PUBLIC POLICY FOUNDATION NEWS RELEASE
For Immediate Release

December 18, 2014
Contact Benita Dodd at 404-256-4050 or benitadodd@georgiapolicy.org

Foundation Study Finds Benefits in Education Savings Accounts
Georgians could enjoy individualized education options, potential college savings

Atlanta – Georgia taxpayers could save nearly $20 million annually by implementing a new school choice option, education savings accounts, already in place in Arizona and Florida, according to a new study released today by the Georgia Public Policy Foundation.

The study, “Opportunity for All: Education Savings Accounts in Georgia,” by Dr. Eric Wearne, a Senior Fellow at the Foundation, is the first to examine the benefits to the state of Education Savings Accounts (ESAs), a mechanism that puts parents directly in charge of their children’s education.

In Arizona, the first state to implement ESAs in 2011, the accounts allow parents to “withdraw their children from public, district, or charter schools and receive a portion of their public funding deposited into an account with defined, but multiple, uses, including private school tuition, online education, private tutoring, or future educational expenses.” The accounts are funded at 90 percent of the per-student funding for charter schools in that state.

Unused funds in the ESAs can be saved and earn interest in the tax-free accounts, encouraging parents to be cost-conscious. This feature is absent from traditional voucher programs so that, according to Wearne, “Education Savings Accounts, by their very nature, encourage and reward both cost-awareness and long-term thinking.”

Better yet, “As HOPE funds are stretched thinner and thinner statewide, ESA funds could be a way to cover this potential gap,” Wearne suggests.

“Students would also see, from an early age, that college is an option for them, and that money can be set aside by even the poorest families to help them get there.”

ESAs address another weakness in traditional voucher programs, which typically are set at a fixed dollar amount. If the amount is too high, the savings to taxpayers and the amounts left for public schools becomes too small. If the amount is too low, poor families are left behind: They can’t afford the difference between the cost of tuition and the amount of the voucher.

Georgia’s Education Expense Tax Credit program could help mitigate this. Low-income families would be eligible to receive scholarships from one of Georgia’s approved Student Scholarship Organizations (SSOs) that would supplement ESA funds and make many more choices financially possible for many more families.

“This combination of a newly-created ESA and Georgia’s existing tax credit scholarship program could provide partial scholarships to middle-income families while providing larger scholarships for low-income families to maximize educational opportunities for everyone,” says Wearne.

Kelly McCutchen, president of the Georgia Public Policy Foundation, said the findings of Wearne’s study offer “hope and encouragement” for Georgia education.

“Customization and choice impact nearly every aspect of our lives today,” said McCutchen. “ESAs bring those features to education. And they can empower middle- and low-income parents with opportunities that only wealthy families have today.”

“If we’re serious about enhancing economic opportunity, it starts with taking the next step in enhancing education,” added McCutchen.

The full study is available here and at the Foundation’s Web site, www.georgiapolicy.org.

 


About the study author: Dr. Eric Wearne is an assistant professor in the School of Education at Georgia Gwinnett College. Prior to joining the GGC faculty, Dr. Wearne was Deputy Director of the Governor’s Office of Student Achievement (GOSA). Dr. Wearne is also a current governing board member at Latin Academy Charter School, a college preparatory middle school in the city of Atlanta.  He began his career teaching English and debate for several years at Duluth High School in Gwinnett County. He holds a Ph.D. in Educational Studies from Emory University, a M.A. in English Education from the University of Georgia and a B.A. in English from Florida State University.

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The Georgia Public Policy Foundation is our state’s leading organization promoting government transparency. The Secretary of State’s office shares the Foundation’s commitment to transparency and responsible stewardship of taxpayer dollars, which is why our agency was the first in Georgia to publish its budget and spending data on a public transparency website.

Karen Handel, Georgia Secretary of State more quotes