This year, Congress is considering a proposal to give children from military families more quality learning options through education savings accounts.REF Surveys have found that a child’s education is a factor in military parents’ decisions about whether to remain in the service, and legislation pertaining to the education of children in military families is a federal concern.REF Heritage Foundation researchers have documented the difficulties that the military faces in recruiting and training new members, part of which is due to the cost of training new service members—costs that increase when service members need to be replaced should parents leave the service to provide their children with more learning options.REF

State lawmakers in Arizona, Florida, Mississippi, North Carolina, and Tennessee have made education savings accounts available in their state using existing state taxpayer resources.REF Parents can use an account to buy textbooks, save for college, pay K–12 private school tuition, and purchase materials to educate a child in the home—simultaneously, if they choose.

For the proposal currently before Congress—the Education Savings Accounts for Military Families Act—federal lawmakers should make sure that the education savings accounts do not require new taxpayer spending. Arizona, the first state to enact an account law in 2011, uses a child’s portion of the state education formula for each account, which means that the accounts use existing spending for a child’s education.REF Lawmakers in most of the other states with account laws have followed this model.

Likewise, Washington does not need new taxpayer spending to create these learning options for children of military families. Congress should choose among the many duplicative and ineffective programs and repurpose existing spending for the accounts.

New Taxpayer Spending Not Required

The U.S. Department of Education’s Office of the Inspector General (OIG) makes semi-annual reports to Congress documenting illegal activity with money meant for students in federal K–12 and postsecondary programs, along with special reports as needed.REF These reports uncover millions of taxpayer dollars stolen every year.

For example, the OIG has reported significant fraud and even outright theft in the 21st Century Community Learning Centers (CCLC), a federal after-school grant program. In 2015, a Louisiana grantee used $87,000 of federal grant money to “cover gambling debts and other personal expenses.”REF More recently, an 11th Circuit court ruling required Georgia’s department of education to repay some $2.1 million in CCLC funds awarded in a “rigged competition” for grant awards.REF In California, an individual seeking CCLC monies forged documents and tried to steal $35 million. (Fortunately, investigators caught the fraudster and the spending was returned.)REF

Meanwhile, the Bush, Obama, and Trump Administrations have proposed either cutting or eliminating the program.REF The White House’s fiscal year (FY) 2019 budget request states that the program “lacks strong evidence of meeting its objectives,” and Heritage researchers have summarized the academic studies finding no positive effects, and even negative effects, on participating children.REF

Impact Aid is another example. This federal spending program applies to relatively few students and, consequently, is a federal line item with which most voters would be unfamiliar. The spending is federal taxpayer money for “federally connected school children,” such as children from military families or Native American students, as well as spending on school districts in areas where the federal government owns property and the local government does not collect taxes on that property.REF Districts have wide discretion over how to use Impact Aid spending.REF

Last year, federal officials rejected a proposal to use this federal spending for education savings accounts for children in military families. Current bill sponsors Senators Ben Sasse (R–NE), Tom Cotton (R–AR), and Tim Scott (R–SC) and Representative Jim Banks (R–IN) have not discussed using this funding in connection with their proposal.

Any recommendations to reduce or repurpose Impact Aid meets resistance from special interest groups.REF This year, the National Association of Federally Impacted Schools released a statement opposing additional learning options for students in military families, claiming that the proposal “creates a new Federal online marketplace with little oversight or accountability.”REF

However, these groups should show as much concern when investigators discover fraud. For example, in Beaufort County, South Carolina, which receives some $50,000 in Impact Aid annually, the superintendent violated ethics rules by hiring his wife to a position that paid $90,000 per year.REF To put this in perspective, the $90,000 annual salary the superintendent gave his wife is nearly double the total amount of Impact Aid the district received in FY 2014.REF

One year later, the superintendent came under scrutiny again after “thousands” of transactions using district credit cards went “unexplained.”REF

In Oklahoma, the state auditor found that Marble City School superintendent Larry Couch used $100,000 of the district’s Impact Aid spending to buy a house.REF The amount of the theft is equivalent to one-third of the district’s Impact Aid funding in FY 2014.REF After the auditor uncovered the fraud, the superintendent “stated that he had ‘cooked the books’ and that the independent auditor would not have known about the transaction.”REF

Any misuse of taxpayer spending meant for students and teachers is unacceptable. In the states that have made education savings accounts available to K–12 students, state officials prevent ongoing fraud by reviewing account expenses quarterly, even closing accounts in the event of misuse—providing more transparency to taxpayers and lawmakers than district budget practices.REF In Arizona, audits of education savings account have found that approximately 1 percent of the spending in the accounts was for unapproved education items.REF

Conclusion

Surveys and other reports on education savings accounts in Arizona, Florida, and Mississippi have found high levels of satisfaction among participating families, and low levels of misspending.REF Families are also taking advantage of the accounts’ unique features that allow account holders to customize a child’s learning experience and save unused money from year to year.REF The accounts have the potential to help the nation’s military with ongoing recruitment and retention challenges because servicemembers, like all parents, consider their child’s education when making career choices.

Washington should repurpose taxpayer spending from existing programs to fund the accounts. Examples of waste and even misuse, along with ineffective programs, abound in OIG reports and White House budget requests, giving Congress plenty of options. These resources should be put to better use to give children in military families the chance to succeed in school and in life.

—Jonathan Butcher is Senior Policy Analyst in the Center for Education Policy, of the Institute for Family, Community, and Opportunity, at The Heritage Foundation.