New schools needed: How to make school choice markets work

New and Better Schools coverFor the past two decades, hundreds of thousands of mostly disadvantaged students have enrolled in private school choice programs, usually seeing some improvement in their academic outcomes while saving taxpayers money.

But the programs have yet to create the kind of systemic transformation sought by proponents of market-based education reform. As Michael McShane writes in the opening chapter of New and Better Schools: the Supply Side of School Choice (which he edited): “Arguing that performing marginally better than struggling public schools is a victory is defining success down.”

The volume, released late last year, and an earlier symposium at the American Enterprise Institute, reflect a growing sense among school choice proponents that simply giving students access to private schools that may previously have been out of reach won’t, on its own, create the kind of quality and efficiency improvements they say the education system urgently needs.

For the forces of creative destruction to drive real improvements in education, the thinking goes, more high-quality schools need to open  the faster, the better. Creating an environment where new private schools can thrive will require new forms of school financing, new teacher education programs to train a new breed of entrepreneurial educators, and a new approach to school regulation.

Whether you agree with the framing analysis or not, the volume may offer a window into the parental choice debates of tomorrow. Contributors contemplate schools financed by investors who only get paid if they improve student outcomes, private school networks that draw lessons from the best public charter schools, and programs that give parents accounts they can use to shop not just among a range of different education providers to create a customized learning plan for their children.

In  the first chapter, McShane writes that private school choice programs basically have three ways to give more students access to high-quality schools:

They can (1) fill excess space in existing existing high-quality schools (2) encourage existing schools to scale up, or (3) encourage new high-quality schools to open to enter the market.

Private school choice programs have done the first, he writes, but have struggled with the second or third (where charter schools seem to have done a better job).

In one chapter McShane, along with AEI colleague Max Eden, suggest that entrepreneurial educators might launch a “prototype” schools, as some educators are already doing in some high-choice jurisdictions.

The authors propose a “franchising” system to allow successful school models to reach greater numbers of students, the same way it has allowed restaurants, real estate brokers and car-repair shops to expand rapidly into new markets. Potential school leaders  franchisees  would hire teachers, cultivate ties with people in the surrounding community, and use social impact bonds to finance new schools that adopt the proven strategies developed in the prototype schools.

For now, it’s “flight of fancy,” the authors acknowledge, but with students filling waiting lists for better schools and millions more expected to strain future school finances, it’s a way to create great schools that scale, quickly.

A competitive market where new schools are opening and proliferating, and where parents can choose freely among public and private options, would call for different forms of regulation. Rather than creating accountability systems that prescribe penalties and turnaround strategies based on results, McShane argues policymakers should set minimum guidelines for schools to operate  ensuring they are safe, for example  and then give parents clear information to judge school quality and make informed choices.

This line of thinking can upend other assumptions held by education reformers. As Andrew Neumann argues in one chapter, reformers have often focused on closing under-performing schools. This, he writes, is could actually harm efforts to improve education if the surrounding schools are similarly low-performing (an argument that may be familiar to readers of this blog).

The result of efforts to close a bad school is often that the children are trapped in another bad school, and we now have more frustrated and disenfranchised parents. Given the shortage today of the supply of high-quality options for families to move into, closing low-performing schools does not move us toward our desired goal and in fact might be moving us further away from it.

Neumann  is the president of Educational Enterprises, which helps start new private Christian and public charter schools in several states. One of the crucial barriers for new schools, he writes, is start-up capital. New private schools require as much as $2,000 per student to finance buildings and pay for infrastructure as they grow enrollment.

In 1990, before the dawn of the charter school movement, private schools enrolled more than 5.6 million children and had amassed $70 billion in philanthropic support. Since then, Neumann  writes, charter schools have exploded to serve millions of students, while private-school enrollment has declined.

Private schools have accumulated stores of social capital, philanthropic backers and community ties, which he argues threaten to “dissipate and no longer exist” if their supporters, including religious institutions, fail to find ways to use these existing assets to start “new high-quality schools.” For these institutions, creative destruction may wind up being a means of preservation.


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BY Travis Pillow

Travis Pillow is Director of Thought Leadership at Step Up For Students and editor of NextSteps. He lives in Sanford, Fla. with his wife and two children. A former Tallahassee statehouse reporter, he most recently worked at the Center on Reinventing Public Education, a research organization at Arizona State University, where he studied community-led learning innovation and school systems' responses to the Covid-19 pandemic. He can be reached at tpillow (at) sufs.org.