An estimated 372,000 students have been displaced in the wake of Hurricane Katrina. Their families now face the challenge of finding schools for them for the 2005-06 school year. Public, private, and charter schools throughout the country are generously opening their doors and welcoming affected students into their classrooms. Many schools, however, cannot afford to shoulder that burden, reducing displaced students' educational opportunities. The Administration's emerging proposal to direct emergency funds to public schools could end up costing $4 billion. For half that price, the federal government could provide every displaced student with an Education Smart Card worth $5,000 that could be spent on public, charter, or private schooling. The Educational Smart Card, as opposed to direct government funding of school districts, would expand parental choice and give displaced families greater flexibility, a crucial factor for those rebuilding their lives after Katrina.

The Proposals

As things now stand, schools enrolling students displaced by Hurricane Katrina are expected to shoulder the additional burden of funding these students' education. Because there is no clear tax base to fund these educational services, state and local authorities have called on the federal government to provide emergency funding. The Bush Administration is currently exploring proposals to assist displaced students and the schools that are welcoming them. Preliminary estimates suggest that the Administration's proposal may amount to more than $4 billion in K-12 education funding.

Emergency funds should be allocated in a way that is fair and that makes displaced families' lives easier. This is a challenge, given the great diversity of situations in which individual Gulf Coast evacuees now find themselves, dispersed across the country by Hurricane Katrina. Awarding Education Smart Cards to each of the 372,000 students displaced by Katrina would overcome this difficulty. An Education Smart Card would be worth $5,000 per student, and this money could be used to cover enrollment costs at public, private, or charter schools operating in accordance with state law. After 12 months, unused funds would automatically be rolled over into Coverdell education savings accounts, as already provided under federal law. The Education Smart Card emergency program is estimated to cost $2.046 billion, and unlike increased federal grants to public schools, would provide greater choice and flexibility, which are especially important to families displaced by the hurricane.

Funding: The Education Smart Card scholarship program would be temporary, and only victims of Hurricane Katrina would be eligible. Therefore, the program could be funded through Federal Emergency Management Agency (FEMA) appropriations. Built into the preliminary cost estimate of $2.046 billion is an assumption of administrative costs of 10 percent. The program would conclude in 12 months.

Eligibility: Eligibility for Education Smart Cards would be restricted to former residents of affected school districts who are eligible to be enrolled in K-12 public schools. Determining eligibility for this benefit should follow the guidelines of other FEMA relief programs.

Allowable Uses: Only public, private, and charter schools operating under state law would be able to accept enrollment payments from Education Smart Cards. This will ensure that funds are spent appropriately. In order to provide additional flexibility, Education Smart Cards could also be used to pay for after-school tutoring from approved supplementary education service providers. After 12 months, any funds remaining on a child's Education Smart Card would be automatically transferred into a Coverdell education savings account created on the child's behalf.

The Benefits

Fairness: Giving education funds directly to families ensures that schools that have opened their doors to displaced students in their time of need are reimbursed for the added costs of educating these new students.

Flexibility and Mobility: Families have relocated far and wide in the wake of the hurricane. These families need flexibility as they rebuild their lives. The Education Smart Card would give families freedom and flexibility to ensure that their children receive quality education services in the short term, without preventing those families from relocating during the school year, as may prove necessary or desirable.

Maximizing Resources: By allowing families to choose to enroll their children in public, charter, and private schools, the Education Smart Card will ensure that displaced students are able to claim the best available seats wherever their parents have chosen to settle.

Creativity: Giving families the opportunity to choose the best education services for their child during the 2005-06 school year would give accredited education service providers the incentive to develop creative solutions to serve displaced students. Education providers could develop special programs and curricula, confident that funding for these services is guaranteed.

The Best Opportunities for Displaced Children

Hurricane Katrina presents a historic opportunity to provide better educational opportunities for hundreds of thousands of displaced schoolchildren. As policymakers consider calls for billions of dollars in federal emergency funding, they should think about how to ensure that those funds are put to the best use.

Many children from the Gulf Coast did not have access to high-quality educational choices before the hurricane. Schools in many affected areas, such as in Orleans Parish (New Orleans), were among the lowest performing in the nation. The Education Smart Card would immediately give affected children and their families hope and assurance that better opportunities are available..

In the long run, the Education Smart Card will empower parents to expect better educational opportunities for their children, which will be especially important as devastated areas are rebuilt and new educational options are created. The Education Smart card will also be a model for local, state, and federal policymakers eager to provide parents with the power to choose their children's education opportunities.

Dan Lips is Policy Analyst for Education at The Heritage Foundation.