Article summary: For years, homeschoolers have claimed that school choice programs cause inflation in the education market. School choice advocates ignored their warnings, claiming that it makes education more affordable, not less. However, the verdict is in in Iowa. A 2024 study1 found that education savings accounts (ESAs) raised private school tuition price “16%, which drops to 10% (about $830) when fixed effects are added.” The stated goal of this program is to help more families gain access to private schools, but in reality, it only prices more families out of the market. Parents should review the study and learn the reasons why the promises of school choice went unfulfilled.
What is the Solution to Educational Affordability?
Americans, especially those with young children, want education to be available and affordable. We do too! The status quo in education is not working for many families. Parents feel trapped in public schools, and legislators are looking for ways to get them out. So, the question that must be answered is what is the solution?
Is School Choice the Solution?
Some legislators propose school choice as the solution, claiming it will provide families with the funds they need to afford private school alternatives, without causing market inflation.
While legislators have been making this claim, independent educators in states with subsidized private education have been experiencing the impact of inflation in the education market. They have been sounding the alarm based on their personal experience, their front-row seats to these changes, and their awareness that good intentions can undo the basic rules of economics: a subsidized market always leads to inflation.
How Much Does School Choice Increase Tuition?
Because school choice is so new in many states, those who oppose such policies have lacked the hard evidence to prove that it causes inflation. That is, until 2024, when Princeton University doctoral student James Fontana and Professor Jennifer Jennings performed a study on Iowa’s ESA program and found conclusively that the program is causing private school tuition prices to dramatically increase.
In fact, the study, titled “The Effect of Taxpayer-Funded Education Savings Accounts on Private School Tuition: Evidence from Iowa,” found that since 2023, when Iowa introduced school choice, private school tuition prices have increased “16%, which drops to 10% (about $830) when fixed effects are added.” A 10% rise in prices in just two short years is not a good sign for parents in Iowa.
School Choice Is Not the Solution
So, while proponents and legislators claimed that school choice would reduce costs, the data show that, like any other program based on compulsory taxation, redistribution of wealth, and a subsidized market, it is causing high inflation in the education market.
If you are a parent or a legislator, we encourage you to read this study, familiarize yourself with the economic effects of school choice, and oppose this program in your state.
Additional Resources
Ready to learn more about the consequences of inflationary policies? Read Robert Bortins’ and Alex Newman’s new book, Woke and Weaponized: How Karl Marx Won the Battle for American Education and How We Can Win It Back.
1 Fontana, Jason, and Jennifer L. Jennings. (2024). The Effect of Taxpayer-Funded Education Savings Accounts on Private School Tuition: Evidence from Iowa. (EdWorkingPaper: 24-949). Retrieved from Annenberg Institute at Brown University: https://doi.org/10.26300/7qcb-9056
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