ANNOTATION: Parsing the Plan to Expand D.C.’s Voucher Program

The Heritage Foundation recently released a report championing the District of Columbia’s Opportunity Scholarship Program and arguing for changes to buttress the program, which provides public funding for students to attend Washington private schools. FutureEd Editorial Director Phyllis Jordan, who wrote about D.C.’s voucher program last year, offers some context for a segment of the report.

Since 2004, students in the District of Columbia have had access to the D.C. Opportunity Scholarship Program (D.C. OSP), the nation’s only federally funded school voucher program. Income-eligible children—those from families earning 185 percent or less of the federal poverty level (FPL)—can apply to receive a scholarship worth up to $13,287 to pay tuition at a private school of choice. The D.C. OSP has produced important outcomes for participants: significantly higher graduation rates, safer students, and more satisfied parents.

What this fails to mention is that studies have shown no growth in test scores. In fact, two consecutive years of data show students who used the vouchers have significantly lower math scores than those who applied for the program but stayed in public schools. The math gap grew worse in the second year, while differences in English language scores were not statistically significant, according to a federal analysis released in May. In other states, students using vouchers have seen declines, than rebounded after three or four years in the program. The recent analysis from a team led by researcher Mark Dynarski focused on elementary school students and didn’t look at high school graduation. A 2010 federal study found that 82 percent of D.C. students who received vouchers graduated from high school, compared to 70 percent of those who lost out in the lottery. Those results were based on a very small number of students: Researchers received feedback from the parents of 127 voucher students, compared to 189 students in the control group. A February 2018 analysis by the Urban Institute found no significant impact on college enrollment.

Although the scholarships work well for participating students, the OSP’s funding and student eligibility rules undercut the program’s ability to serve more students and its long-term viability. In order to expand and strengthen the D.C. Opportunity Scholarship Program, scholarships should be funded through a process similar to District public and charter schools’ formula and based on student needs (such as higher amounts for children with special needs). Furthermore, lawmakers should remove the income eligibility caps, which limit how many children can participate annually.

Expanding the voucher program to more affluent families could result in giving government assistance to students already in private schools. Like D.C., Indiana launched a voucher program designed to help low-income students in struggling public schools. But after the state changed its rules and allowed moderate-income families to apply, the demographics shifted. In the 2017-18 school year, 56 percent of the 35,000 students in the program had never attended public school.

Using a stable approach to funding the scholarships with a set per-student allocation derived from the student-centered components of the public school formula would be more reliable for families and private schools in the years to come. These updates would modernize the OSP and reflect the way state-based school choice programs are designed and enable the program to serve more students for generations to come.

Current Funding Mechanism for the D.C. OSP 

The OSP is currently funded through an annual appropriations process in Congress, informed by an authorized amount in law. By contrast, most state-based school choice programs fund participants through a stable formula that supplies school choice funding to eligible students reliably, year after year. The OSP is also unique in the school choice landscape in that it is the only federally funded voucher program to date.

This reflects the unique status of the District of Columbia, which is the only city with a budget controlled by Congress.

At the federal level, formula grant programs are “noncompetitive awards based on a predetermined formula. Formula-funded programs represent mandatory spending that is allocated based on pre-determined statistical criteria and delineate the way specific funding is awarded to eligible recipients.

Formula grants are noncompetitive, meaning that the formula has been established in law and clarified through regulations, confining funding to be distributed through the set formula. For the purposes of the D.C. OSP, formula funding the program would provide consistency for participants by establishing a stable process for funding for their scholarships.

Current Funding Structure Leaves the OSP Blowing in the Political Winds. State-level spending on K-12 education, including on school choice options, is largely governed by statewide funding formulas, which are designed to distribute state taxpayer dollars to school districts based on predetermined factors.

OSP has been political from the start. The demand for a voucher program did not arise from local political leaders or educators. Rather, a Republican-controlled Congress imposed the program over the objections of D.C.’s Democratic delegate to Congress and much, but not all, of the city’s political leadership. When Democrats took control of Congress in 2009, they tried to kill the program. Since 2011, when the GOP took back control, the program has been funded. Over the years, the program has gained support from some local political leaders and parents, but others still see it as unwanted federal intrusion into local control of schools.

The OSP, by contrast, relies on annual appropriations from Congress limited by an authorized amount under law. Currently, the Scholarships for Opportunity and Results (SOAR) Act (reauthorized on May 5, 2017, as part of the Consolidated Appropriations Act of 2017) authorizes up to $15 million to be spent annually on the OSP. However, the current funding mechanism for the OSP has created instability in the program, which is at the whim of political winds that blow in different directions from one presidential Administration to the next. That has led to the inexorable politicization of funding for the OSP.

In 2009, the very first year of the Obama Administration, the so-called Durbin amendment introduced by Senator Richard Durbin (D–IL) was included in the fiscal year (FY) 2010 Omnibus appropriations act signed into law by President Barack Obama. The Durbin amendment required reauthorization of the OSP and that it be approved by the D.C. City Council, effectively ending the program. That effort was spearheaded by D.C. Delegate Eleanor Holmes Norton (D–DC), who has long tried to end the scholarships.

In 2009, President Obama’s FY 2010 budget request retained funding for existing students in the scholarship program, but did not allow funding for any new scholarships. In a breathtaking show of disregard for the educational choices made by families participating in the OSP, then-Education Secretary Arne Duncan went as far as to rescind hundreds of OSP scholarships that had already been awarded to students.

Subsequently, President Obama’s budget requests annually sought to dramatically reduce or zero-out funding entirely for the D.C. OSP. In 2009 the president’s FY 2010 budget request slashed funding for existing scholarships down to $8.4 million (down from $13 million).

Obama’s budget requests then began routinely zeroing-out funding for the D.C. OSP in every budget from FY 2012 to FY 2017.

Despite Obama’s budget requests, Congress continued to appropriate millions of dollars for the program each year, as well as federal dollars for traditional and charter schools. During this time, however, the number of D.C. students using vouchers dropped from 1,638 in 2013-14 to 1,154 in 2016-17. A release of $20 million in unused funds from the Trump administration, along with changes to the rules on sibling preference, allowed the program to offer more scholarships and bring its numbers back to 1,653 in the 2017-18 school year.

Congress should move away from a volatile funding approach for the D.C. OSP and toward a stable formula-funded model. Such a move would give confidence to participating families and private schools that the OSP would not suddenly be closed or funding significantly reduced—leaving both parents and schools to make difficult choices.

The elephant in the room is that many D.C. students who win vouchers in the lottery don’t use them. In fact, in the 2016-17 school year, more than half of those awarded vouchers chose not to use them. Others attend private schools only to leave after a year or two. The recent federal analysis found 60 percent of students were there in both of the years studied. The political volatility of the program may play a role in this. But a 2017 study by FutureEd found other reasons for this churn, including a timetable for awarding vouchers long after deadlines for applying to private schools, additional transportation and schools costs, and improvements among traditional public and charter schools.