“Milton Friedman’s School Voucher Idea at 60” by Dan Lips June 24, 2015


Milton Friedman’s School Voucher Idea at 60

ByDAN LIPSJune 24, 2015 8:00 AM

Just the beginning. (Alamy/Getty Images)

From school choice to personalized lifelong learning.

Sixty years ago, Milton Friedman came up with a profound idea for improving education. Rather than paying public schools to educate the students in their districts, the future Nobel Laureate argued, the government should provide parents with vouchers to allow them to choose what school each child would attend.

In cities such as Milwaukee and Cleveland and Washington, D.C., and states such as Arizona and Florida and Indiana, families across America have benefited from programs designed to give families educational choice. Empirical evidence assessing these programs shows that allowing parents to choose their children’s schools results in greater parental satisfaction, higher student test scores, and improved graduation rates.

But in 2015, the landscape of K–12 and higher education, as well as the economy and the labor market as a whole, are changing. And these changes require us to rethink how choice in education could best help children and adults succeed. Consider two key trends:

First, students of all ages now have unprecedented opportunities to benefit from affordable and high-quality learning experiences. In 2015, a student in the United States — or anywhere in the world — with an Internet connection has the opportunity to learn from a wide variety of terrific teachers.

Many schools are using technology to offer personalized and challenging forms of instruction. Brilliant educators like Salman Khan — the founder of Khan Academy — are providing lessons online, for free, for any student who is willing to do the work. Colleges like MIT and Stanford now offer coursework online for free and even award credentials to those who pass an exam.

For motivated students of all ages, learning is becoming a personalized journey that can happen any day, at any hour, at their own pace, not just within the walls of a traditional classroom or during the school year. Students will experience education through multiple channels, and not just from one school.

Second, it is becoming increasingly clear that the need to learn doesn’t end with earning a diploma. Many adults who have traditional credentials like college degrees are struggling to find well-paying jobs. According to the New York Federal Reserve Bank, 44 percent of recent college graduates are in jobs that don’t require a college degree. Some professions that once were secure livelihoods are being disrupted or replaced by machines, technologies, or new enterprises. As a result, many workers are being forced to acquire new skills in order to change careers.

What do these trends mean for Milton Friedman’s original idea of using school vouchers to improve education?

We should be giving families control of the funds that they will spend on K–12 and higher education throughout their lives.

Instead of simply providing parents with the power to choose which school their child attends during a given school year, we should be giving them — and eventually the students themselves, when they reach adulthood — control of the funds that they will spend on K–12 and higher education throughout their lives. Rather than only allowing parents to answer the question of where a child goes to school, we should let students (or, initially, their parents) control where, when, how, and from whom they learn.

Five states, led by Arizona, have introduced state-funded education savings accounts that give families this control of K–12 funding. Parents can use funds in the account to pay for school tuition, tutoring, online classes, and instructional materials, and if there is anything left in a given year, to save it for future years. The state maintains proper oversight by tracking how funds are spent.

Nevada recently enacted a universal education-savings-account program that will offer the parents of all public-school students the chance to take direct control of their children’s education in this way.

Besides these promising state efforts, Congress has an opportunity to begin giving families direct control over how their education funds are spent over the course of a lifetime. Congress could reform federal 529 savings plans, which allow tax-free saving for college, to include other allowable uses — from preschool and K–12 education to post-college job training.

Transforming 529 accounts into Lifelong Learning Education Savings Accounts would provide an immediate benefit to the families of the 12 million holders of 529 savings accounts. Use of the accounts would likely grow if other expenses were allowed, since 35 states and D.C. offer tax incentives for contributions into 529 accounts. Congress could also give families the option of receiving their share of federal education funds directly into an account if they forgo public programs such as Head Start. This would ensure that disadvantaged students also have the opportunity to benefit.

Parents should be thankful for Milton Friedman’s vision for school choice, which has improved educational opportunities for millions. But in 2015, education savings accounts and lifelong learning offer a more promising answer to the question of how best to equip Americans to learn, succeed, and pursue happiness throughout their lives.

— Dan Lips is a fellow with the Goldwater Institute. In 2005, he wrote a paper for the Institute proposing the nation’s first state-funded K–12 education-savings-account program for Arizona.

Milton Friedman

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