Education Savings Accounts are a key equalizer of opportunity in education

With state legislative sessions underway across the country, lawmakers must focus their attention on reversing the historic learning losses caused by prolonged school closures during the pandemic. New data from the U.S. Department of Education (ED) should inform how policymakers think about education funding and equal opportunity.

Last month, Iowa followed Arizona and West Virginia in giving families broad access to education savings accounts (ESAs) that allow parents to control their children’s school funding to pay for tuition, homeschooling, tutoring, and other costs. Utah established a new ESA program that will help thousands of families. Florida lawmakers have unveiled a plan to make their ESA program available to all children. According to the Wall Street Journal, “about a dozen other state legislatures” are also considering new ESA programs.

These efforts invite debates about public school funding and whether providing more resources to public schools that serve underprivileged children would be a better approach to improving education opportunities.

According to ED's National Center for Education Statistics, the average current per-pupil spending in high-poverty school districts is higher than spending in low-poverty school districts as of 2020. Public school districts serving low-income students spend more than districts serving affluent students in forty states. The below table shows a state-by-state breakdown.

ED's data compares national and state-by-state school district spending by poverty quarter. The data shows that “high-middle” poverty school districts actually spend the most at $14,600 per student, while “low-middle” poverty districts spend the least at $11,900 per student.

Since this spending data is from the 2020 fiscal year, it does not reflect the $190 billion in federal aid that Congress and ED provided to state agencies during the pandemic. Congress required that the majority of Elementary and Secondary School Emergency Relief funds be distributed in a manner consistent with Title I of the Elementary and Secondary Education Act. Therefore, the recent increase in federal funding for K-12 education should further increase funding for “high-poverty” and “high-middle” poverty school districts.

The re-balancing of K-12 funding to increase spending on students from higher-poverty communities reflects a longstanding goal of federal education policy. Since 1965, Washington has sought to improve equal opportunity to high-quality schooling by providing funding assistance to lower-income communities.

Unfortunately, equalizing school funding levels has not closed the achievement gap between children from low-income households and their peers. The 2022 National Assessment of Educational Progress (NAEP) revealed that American students’ test scores have declined since 2019, likely due to school closures during the pandemic. The NAEP also found that lower-performing students’ fell further behind their high-performing peers, and that the gap between white and black students’ math scores had increased to the widest discrepancy since the 1970s.

For state lawmakers looking to expand equal opportunity in K-12 education, simply increasing education funding isn’t the answer. Policymakers must address other areas of inequality, including differences in rich and poor students’ opportunities to learn inside and outside of school.

Policymakers should also address another, often overlooked source of inequality in education: the outside-of-school learning gap. Wealthy families spend considerably more on tutoring and other outside-of-school enrichment programs than disadvantaged families. Providing lower-income families with direct grants or accounts to pay for tutoring and enrichment would further improve equal opportunity. According to ExcelinEd’s Ben DeGrow, “10 states have introduced education microgrant programs, providing small sums of money to parents to spend on supplemental educational services, like educational therapies or tutoring, to support their child’s learning.”

For more than fifty years, federal and state policymakers have focused on equalizing funding resources to public schools to address inequality in American education. But that hasn’t been enough. Ensuring equal opportunity in the twenty-first century requires providing resources directly to parents and students to ensure that all children can receive a high-quality education. States like Arizona, West Virginia, and Iowa are providing models for the rest of the nation.