Ep. 32: How Florida Families Use ESAs with Jason Bedrick & Lindsey Burke

Drew Catt: Hello, I’m Drew Catt. EdChoice’s director of state research and policy analysis. Today I’m chatting with Lindsey Burke and Jason Bedrick, co-authors of our latest report, Personalizing Education: How Florida Families Use Education Savings Accounts. Lindsey is not just a Ph.D. candidate at George Mason University, but she also serves as the director of the Heritage Foundation’s Center for Education Policy and as an EdChoice fellow. Jason is EdChoice’s director of policy. Welcome to the show, y’all.

Lindsey Burke: Thanks so much for having us.

Jason Bedrick: Thanks for having us.

Drew Catt: So to start off, tell us about this study. What did you set out to learn? How did you go about gathering and analyzing the data?

Lindsey Burke: Well we really wanted to figure out how Florida families were using their education savings accounts (ESAs), which in Florida, and Florida was the second state to adopt an ESA model. In Florida they refer to it as the Gardiner Scholarship account. So we’ve seen ESA options start to increase in popularity across the country. We now have six states with ESAs. But the critical question for us was, how are families actually using these accounts? How are they leveraging the unique facets of ESAs? Are they customizing their children’s education with the flexibility that ESAs provide? We had all of these questions about how families are actually engaging with the accounts, which is what we sought out to figure out. So we reached out to the administrative entity, the nonprofit Step Up For Students, who works to administer Florida’s ESA option, and they were kind enough to work with us to get us the data we needed to really be able to understand the parent experience with their ESAs in Florida.

Drew Catt: Excellent. So before we delve deeper, share with us some of the top findings.

Jason Bedrick: Sure. We look at the program over two years, 2014–2015 school year, and the 2015–2016 school year. During the first of the two years we had about 1,500 students participating in the program, and there was about 8.4 million dollars used in ESA funds by those students. In the second year of the program it grew considerably, from about 1,500 students to just under 5,000 students spending about 31.4 million dollars, so there was a really tremendous growth between those two years.

What we did is we divided the ESA students into a few different categories. First, customizers or non-customizers, so some of the students used the ESA like a traditional voucher. So they only used the ESA funds for private school tuition. Other families used the ESA to customize their child’s education in one of two different ways. Either what we call augmented tuition users, so those are families that sent their child to a traditional brick and mortar school, but also were spending money outside of that classroom on things like tutoring, textbooks, homeschool curricula, online learning, educational therapy, et cetera. Then the last category of students we call the independent customizers. Those are the families that didn’t send their child to a traditional brick and mortar school at all. They entirely customized their child’s education.

More than a third of the ESA families used their funds to customize their child’s education. Of those customizing families, more than half were independent customizers that weren’t using traditional brick and mortar classrooms. We did find a significant degree of customization in Florida.

Drew Catt: Yeah, that’s fascinating, especially the breakdown between the, what did you say Jason? The augmented tuition users versus the pure customizers.

Jason Bedrick: Yes, and it was about 50/50 both years, but slightly leaning towards independent customizers. It should be noted again, that this is a population of students with special needs, so this might not be generalizable to a general population. If say, you were to enact a universal ESA, there might be lower levels of customization, but still a very significant degree of customization. We found that actually between the two years. The amount of customization actually slightly increased.

Lindsey Burke: Yeah, and if I could just add on to that, what we wanted to really figure out with this study was, yes, families appear to be customizing on the surface, but are they really, really customizing? Because, you could imagine a family who largely used their ESA to pay private school tuition, but then maybe they also bought a textbook for their kid. That would have, had we not delved deeper into the data, lumped them into the customizer category when really, as Jason described it, they’re just augmenting their tuition with some additional options.

That’s why we then parsed out that data a little bit more, and the way that we did that was we dropped out the families from our data set who used any brick and mortar school at all. When we’re talking about customizers who are truly a’ la carte, tailor-made, ESA users, those are families whose children did not set foot in a brick and mortar school at all. They used their ESA; maybe they hired a private tutor; maybe they did an online course, bought some textbooks and curricula. So they really crafted a perfectly tailored education option for their child. That’s why it was so exciting to see that of those customizing families; about half of them used their ESA that way.

Drew Catt: Yeah, that’s great. Lindsey, as you previously mentioned, Arizona’s ESA program was the first in the nation, and you both have studied that program extensively as well. How does Florida’s ESA compare to Arizona’s in terms of this study’s focus?

Lindsey Burke: Yeah, that’s a great question. That was another reason why we wanted to study Florida, was we wanted to know was Arizona a unique phenomenon? Because in Arizona, the data that we had there also suggested a relatively high proportion over a two year period from between a quarter and a third of families who were using their ESAs to customize, so we wanted to know was that just Arizona? Or do we see it in different locations across the country in different time periods? And indeed we did in Florida. What that suggests to us, that you’ve got about a third of families in Arizona, a little more than that in Florida, who are truly customizing their children’s education using their ESA.

That suggests to us that ESAs over time, with different populations and different locations, retain their unique features, that you can roll over, that you can direct every dollar. And that the way families use them are, in fact, distinct from how a family uses a traditional school voucher option, which is a great option. But we can see over time that ESAs retain their unique features. Families use those unique features in a way that really benefits their children, and that ESAs don’t really, for lack of a better term, become vouchers over time.

Drew Catt: Yeah, so Lindsey, that’s interesting that you say that because I’ve heard some critics say that ESAs are just vouchers in disguise. How would either of you react to someone who might use your study to support that claim? Since, as you said, the majority of ESA users do use their funds much like a traditional voucher, to pay for the private school tuition.

Lindsey Burke: I would challenge any skeptic of either ESAs or vouchers, for that matter. Which, by the way, vouchers, tax credits, these are all great options that empower parents to find learning options that really work for their children. Just the idea that somehow this is still a dirty word in 2018 is really laughable. But I would challenge anyone to use a voucher to hire a private tutor, or to be able to roll over their voucher funds from year to year if they haven’t used them all. I mean, they are completely distinct from an ESA model. The courts have said as much as well.

It’s clear from our research, from the data that’s out there, from legal precedents, that ESAs are distinct, that families use them in a distinct way from a traditional school voucher option. But all that still doesn’t render vouchers a bad policy choice. They’re an excellent policy choice for states across the country, along with every other education choice mechanism that’s currently on the table today.

Jason Bedrick: I mean, imagine somebody saying that Social Security … Let’s say a study found that two thirds of Social Security funds were used to pay rent, and then somebody came along and said, “Oh well, it’s no different from Section 8, so we should just get rid of it and just implement Section 8, housing vouchers.” No, I don’t think that’s the right approach because you still have that one third of families that are doing something different with it and that’s important to them.

A voucher is a coupon. If you have a $5,000 voucher, you can redeem that at one place at one time, and only at a traditional brick and mortar school. The ESA is a restricted but flexible-use bank account, so you’ve got a much wider variety of options. Now if at the current moment, two thirds of families are satisfied going to a private school, and they believe it’s a one-stop shop for all their child’s educational needs, I think that’s great, but we have to be cognizant of the fact that there are a third of families, and actually in the second year it was closer to 40% of families, that wanted something outside of the traditional classroom. If our education system is truly designed to find the right fit for all children then we want to make sure that those families that need something beyond the traditional classroom have access to it.

Drew Catt: Yeah, and that’s wonderful. If you are a school choice advocate looking to expand or pass new ESA programs in other states, what is most important for you to know? And how can you use this study?

Lindsey Burke: Yeah, I think to me one of the most important takeaways from this study is for state policymakers, for folks who are on the ground working to advance ESAs in the states, to make the allowable uses as broad as possible for families, because we can see from the evidence that families really do value the unique ability of ESAs to be able to purchase multiple education services and products and providers. We really have no idea how families might use them moving forward. Families are going to come up with creative ways to meet the needs of their children’s unique learning needs, so keeping that as open as possible in terms of what the allowable uses are, I think is critically important for the success of these options moving forward.

Jason Bedrick: Right, this is really about building a new market. Changing the funding formula is going to change how we can deliver education. Right now, most families get their child’s education at a school, but I can see the day, because of the flexibility afforded by ESAs that you have more educational entrepreneurs entering this area specializing in discreet aspects of education. Just like the newspaper industry and other industries have had an unbundling of the services they provide, you could see a future where there’s an unbundling of the services that a school provides. Where children might go to say, an education mall, and they’re going to different providers to get their math instruction and their English language or foreign language instruction, and so on and so forth. Completely customizing their child’s education as opposed to going to a particular school where every single subject is controlled by one central administration. We could see a future where there is a much greater specialization and customization on the part of families.

Drew Catt: Yeah, and that’s wonderful. Anything that either of you would like to add before we sign off?

Jason Bedrick: Right now, there are a whole bunch of states that are considering ESAs. In New Hampshire, in Mississippi you already have ESA bills that are moving forward through the legislature this year. In Missouri, they have a tax-credit funded ESA that just passed their government reform committee. Then there’s a bunch of other states that I know of that are considering some form of education savings accounts. I think it’s very important for the law makers in these states to study the research, look at the experience that Arizona and Florida and other states, that are already implementing these ESAs have had, and learn from those lessons as they develop their own educational choice programs.

Drew Catt: Well that’s all she wrote on this episode. Thank you to our listeners for joining us for another EdChoice Chat. Please, don’t forget to subscribe to our podcasts for more of our coverage of new school choice research.