The Case against School Vouchers

Free-market conservatives are understandably desperate to break the government education monopoly that guarantees an endless cycle of liberal indoctrination and up-whirling mill levies.  To this effect, many see a savior in Milton Friedman and one of his favorite hobby horses: the educational voucher.

Unfortunately, Friedman, who frequently got it monumentally right, got it monumentally wrong on vouchers.  Educational vouchers are no alternative; at best, they are ineffectual, and at worst, they are a disaster in waiting.  The axiom that nothing can improve when government bureaucrats are involved is important to remember here.

Take the example of Wisconsin. It has one of older and most widely disseminated educational voucher programs in the country -- and it's a skein of limitations, regulations, and conformations.     

To access Wisconsin's voucher program, you have to be one of life's losers -- i.e., among the poor.  Eligible students are plucked from families earning no more than 185% of the federal poverty limit.  Poverty only gets you into the lottery, though; it doesn't ensure a voucher.

And when a voucher is issued, school choice is hardly that.  Selection is limited by Wisconsin's Department of Public Instruction to the top 25 private schools that have received the most applications from voucher-eligible students.  It's a popularity contest.

The DPI demands that these "private" schools have degreed teachers, have "appropriate" curricula, maintain an environment "conducive to learning," and have an accountable board of governance.  In addition, the private schools have to follow all public-school standards for hours of instruction and comply with curriculum requirements.

By setting the rules for payment, vouchers enable government to co-opt private schools.  By co-opting private schools, government further retards innovation and further homologates the curriculum and delivery of education.  (Khanacademy.org could never have arisen under government purview.)

Vouchers turn private schools into adjuncts of the government-school system. 

Post-secondary education provides a lucid lesson on the perverting impact of government money and government diktats on an educational market with putative choice.

Everyone is free to apply to any public or private college.  But there really is little choice.  The educational experience differs little from public universities to private ones.  Cal, Berkeley, or Stanford?  It doesn't really matter.  Graduation requirements, how classes are taught, the educational experience -- all are similar.  

They're similar because government forces every peg into the same round hole.  The Higher Education Act of 1965 was the first shot at a higher education coup.  And the Higher Education Opportunity Act of 2008, which is about 20 times longer than the Higher Education Act of 1965, modifies and extends government's reach to issues as diverse as the availability of Pell Grants and the illegal downloading of digital music and video.

Nevertheless, the vast majority of schools -- public and private -- go along, because the vast majority want in on the largesse.  For example, increases in the maximum Pell Grant award give private colleges a license to increase tuition, according to a research paper published by the National Bureau of Economic Research.  Data from the National Center for Education Statistics show 71% of all undergraduate students received some type of financial aid in the 2011-12 school year.  Forty-two percent of students received federal grants.

In short, whoever pays the piper calls the tune, and more often than universities are happy to give the government the pipes.

With so much government money sloshing about, no one should be surprised that tuition costs at public and private non-profit colleges are rising faster that just about anything in society.  College costs have been rising at roughly a 7% annual rate for decades.  Over the past 25 years, the consumer price index has risen 115%, while college-education prices have risen nearly 500%.  

Now take this post-secondary model of rent-seeking, education homologation, government overlording, soaring tuition, and a pervasive belief that someone else is subsidizing the tab, and apply it to primary and secondary education.  If you think K-through-12 education is expensive and stultifying now, you haven't seen anything yet if vouchers become the law of the land.  And more government money certainly won't stop the hordes of overcompensated bureaucrats therein from indoctrinating your kids.

To reform education with government dollars -- including via vouchers -- is no less quixotic than to reform a psychopath with love and deference.  Education can be reformed only through privatization and an unfettered free market.  When that occurs, you can be assured that quality will rise, price will fall, and true educational value will be realized.    

Stephen Mauzy is a CFA charter holder, a financial writer, and principal of S.P. Mauzy & Associates.  He can be reached at steve@spmauzyandassociates.com.

Free-market conservatives are understandably desperate to break the government education monopoly that guarantees an endless cycle of liberal indoctrination and up-whirling mill levies.  To this effect, many see a savior in Milton Friedman and one of his favorite hobby horses: the educational voucher.

Unfortunately, Friedman, who frequently got it monumentally right, got it monumentally wrong on vouchers.  Educational vouchers are no alternative; at best, they are ineffectual, and at worst, they are a disaster in waiting.  The axiom that nothing can improve when government bureaucrats are involved is important to remember here.

Take the example of Wisconsin. It has one of older and most widely disseminated educational voucher programs in the country -- and it's a skein of limitations, regulations, and conformations.     

To access Wisconsin's voucher program, you have to be one of life's losers -- i.e., among the poor.  Eligible students are plucked from families earning no more than 185% of the federal poverty limit.  Poverty only gets you into the lottery, though; it doesn't ensure a voucher.

And when a voucher is issued, school choice is hardly that.  Selection is limited by Wisconsin's Department of Public Instruction to the top 25 private schools that have received the most applications from voucher-eligible students.  It's a popularity contest.

The DPI demands that these "private" schools have degreed teachers, have "appropriate" curricula, maintain an environment "conducive to learning," and have an accountable board of governance.  In addition, the private schools have to follow all public-school standards for hours of instruction and comply with curriculum requirements.

By setting the rules for payment, vouchers enable government to co-opt private schools.  By co-opting private schools, government further retards innovation and further homologates the curriculum and delivery of education.  (Khanacademy.org could never have arisen under government purview.)

Vouchers turn private schools into adjuncts of the government-school system. 

Post-secondary education provides a lucid lesson on the perverting impact of government money and government diktats on an educational market with putative choice.

Everyone is free to apply to any public or private college.  But there really is little choice.  The educational experience differs little from public universities to private ones.  Cal, Berkeley, or Stanford?  It doesn't really matter.  Graduation requirements, how classes are taught, the educational experience -- all are similar.  

They're similar because government forces every peg into the same round hole.  The Higher Education Act of 1965 was the first shot at a higher education coup.  And the Higher Education Opportunity Act of 2008, which is about 20 times longer than the Higher Education Act of 1965, modifies and extends government's reach to issues as diverse as the availability of Pell Grants and the illegal downloading of digital music and video.

Nevertheless, the vast majority of schools -- public and private -- go along, because the vast majority want in on the largesse.  For example, increases in the maximum Pell Grant award give private colleges a license to increase tuition, according to a research paper published by the National Bureau of Economic Research.  Data from the National Center for Education Statistics show 71% of all undergraduate students received some type of financial aid in the 2011-12 school year.  Forty-two percent of students received federal grants.

In short, whoever pays the piper calls the tune, and more often than universities are happy to give the government the pipes.

With so much government money sloshing about, no one should be surprised that tuition costs at public and private non-profit colleges are rising faster that just about anything in society.  College costs have been rising at roughly a 7% annual rate for decades.  Over the past 25 years, the consumer price index has risen 115%, while college-education prices have risen nearly 500%.  

Now take this post-secondary model of rent-seeking, education homologation, government overlording, soaring tuition, and a pervasive belief that someone else is subsidizing the tab, and apply it to primary and secondary education.  If you think K-through-12 education is expensive and stultifying now, you haven't seen anything yet if vouchers become the law of the land.  And more government money certainly won't stop the hordes of overcompensated bureaucrats therein from indoctrinating your kids.

To reform education with government dollars -- including via vouchers -- is no less quixotic than to reform a psychopath with love and deference.  Education can be reformed only through privatization and an unfettered free market.  When that occurs, you can be assured that quality will rise, price will fall, and true educational value will be realized.    

Stephen Mauzy is a CFA charter holder, a financial writer, and principal of S.P. Mauzy & Associates.  He can be reached at steve@spmauzyandassociates.com.

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