EDUCATION NOTEBOOK:
Applying the Ownership Society Agenda to Education
January 26, 2006
The "Ownership Society" will take center stage Tuesday at
President Bush's State of the Union address. The administration is
already highlighting the President's plan to expand Health Savings
Accounts, a key component of the Ownership Society agenda that
encourage people to save for their own medical expenses. Applying
Ownership Society thinking to our public education system should be
next on the agenda.
The Ownership Society is about reforming government programs to
allow individuals to control their own lives, rather than having
the government dictate decisions for them. Few areas of American
life are in greater need of this kind of reform than the nation's
public education system.
Every year, American taxpayers spend more than $500 billion dollars
on public education. From kindergarten through 12th grade, the
average public school student can expect taxpayers to invest more
than $100,000 on his or her education. This investment is largely
controlled by government officials-individuals have little control
over how this money is spent, beyond being able to choose in which
school district they live. As a result, many students do not
receive a quality education that is tailored to their needs.
The federal government is positioned to change this. Washington
spends more than $66 billion in taxpayer funds each year on K-12
education. Thus far, the focus of the Bush Administration's
education policy has been to make states and public schools across
the nation more accountable to the federal government through
testing and standards set in the No Child Left Behind Act. Giving
parents greater control over their children's education has been,
at most, a secondary concern. In his State of the Union address
next week, President Bush should begin to apply Ownership Society
principles to federal education policy.
One simple, achievable initiative would be to expand the amount
that families can contribute to their children's Coverdell
education savings accounts. Families can use the savings in these
accounts, where earnings accrue tax free, to pay for K-12
schooling, including tuition at public, private, and religious
schools. Or the savings can be used for certain higher education
costs. At present, families can contribute up to $2,000 per child
each year.
Following the logic of the Heath Savings Account expansion, the
President could call for an increase in the annual contribution
limit for Coverdell accounts to $10,000 per child each year. If
Coverdell accounts allowed larger annual contributions like "529"
accounts for college savings, states might create tax deductions
for contributions to Coverdell accounts. More than two dozen offer
tax advantages for contributions to 529 college savings
plans.
While expanding education savings accounts would be a good first
step toward advancing Ownership Society goals in education, few
poor families-those worst served by America's public schools-would
benefit because the tax benefits are small and deferred.
To give underprivileged families ownership in education, President
Bush could announce a pilot school voucher program through the
Department of Education's Choice Incentive Fund. Each year since
2001, the Presidents Bush's budget has included $50 million for a
Choice Incentive Fund. Each year, Congress has left the idea on the
drawing board rather than taking up legislation to implement
it.
President Bush explained the purpose of the Choice Incentive Fund
in a 2004 speech: "The program would award federal grants to
communities and organizations that help students, especially those
from low-income families and those trapped in under-performing
organizations, to find a better education."
The time is right, following the early success of the
federally-funded D.C. Opportunity Scholarship Program, for
President Bush and Republicans in Congress to invest political
capital in expanding educational options for low-income
families.
For example, President Bush could propose to provide local
governments and non-profits in 10 areas with $5-million grants for
opportunity scholarships for children from low-income families to
attend private schools. Priority could be granted to governments
and non-profits that arrange matching grants from private
philanthropies or local governments.
In addition to helping children from low-income families, the
Choice Incentive Fund would be a model for future Ownership Society
reforms in federal education programs. If there is strong support
for school choice through the Choice Incentive Fund program,
Congress could consider reforming Title I programs for
disadvantaged children to further empower parents, for
example.
The idea of the Ownership Society resonates with Americans families
who support individual empowerment and personal responsibility. In
few areas will it make more of a difference than in
education.
Dan Lips is Education Analyst at the Heritage
Foundation, www.Heritage.org.