New tools for new challenges: Updating accountability for ESAs

Matthew Ladner

This is the third entry in Fordham’s education savings account Wonkathon. This year, Mike Petrilli challenged a number of prominent scholars, practitioners, and policy analysts to opine on ESAs. Click to read earlier entries from Michael Goldstein and Seth Rau.

The public education system as we knew it in the mid-twentieth century had academic transparency that fell somewhere on the non-existent-to-scant spectrum. Academics were aware of achievement gaps in national data, for instance, but state- and (especially) campus-level academic or financial data were in short supply. Realtors served as the de facto information brokers of the public education system I enrolled into, in the Texas of the early 1970s, and they based their expert opinions on gossip and perhaps the ethnicity of the kids they saw running around on the playground.

We’ve come a long way, baby, but our notions of accountability must continue to evolve with the times. The statewide ESA program in Nevada poses a number of unique challenges that can be tackled with fresh thinking and thoughtful balances.

Our friends at Fordham posed the question thusly: “As Nevada implements its groundbreaking education savings account program, what must it get right in order to provide positive outcomes for kids and taxpayers? Should state authorities stay out of the way? Or are there certain areas that demand oversight and regulation?”

The short answer is that state authorities must be deeply involved in program oversight, but they also need to develop new methods to get it right.

Whatever your views on public school accountability, it remains vital to recognize the limits of state accountability systems. These systems, useful though they may be, have longstanding holes in their nets and restrictions in their reach. Multi-use account mechanisms swim right through these holes, begging for new approaches. For instance, high school students have been doing “dual enrollment” in community colleges for decades. How do states hold community colleges accountable for student outcomes? Unfortunately, they generally don’t.

Similar questions arise for both in-person and online coursework not covered by state reading and math tests. Some argue that if a French teacher is to be held accountable for scores on reading “English,” why not also in Spanish? If the state is going to provide funds for a student to take a calculus course, shouldn’t we be curious about whether or not they learned any calculus?

Lawmakers will be wrestling with these issues in public school accountability for years to come, and the sad truth is that you will find no resolution to them here. Note only that these issues existed before our current debate. ESA programs will require a new approach to transparency and accountability because they take multi-provider customization to a whole new level.

Let’s tackle the need for financial accountability, where the clearest need for state action lies. Fortunately, there other policy areas have acted as testing grounds for user-managed account mechanisms under a system of public oversight. What used to be known as the Food Stamps program (now known as the Supplemental Nutrition Assistance Program after ditching the antiquated voucher mechanism) dramatically reduced financial fraud through the adoption of a use-restricted debit card. The debit card technology can employ both vendor and product codes: You can’t use it at Caesar’s Palace because the casino is not an approved vendor, and you can’t purchase poker chips because those are not approved products. Apologies to all you blackjack fans—but trust me, this is very much for the best.

It fell to the Arizona Department of Education to take a bullet for the rest of the country in being the first to administer a K–12 ESA program in 2011. Every purchase by participating parents gets scrutinized and every account audited. If parents make a purchase judged to be outside of allowable uses, the department can have parents reimburse the account. Serious violations can result in expulsion from the program and/or referral for criminal prosecution. The department considers white-listing into the program by parental request and makes rulings based on the statute and administrative guidelines. Arizona’s program administrators use vendor codes to allow service providers into the program. In time, the program will be large enough to use product codes, but until then, purchases are individually approved.

Interestingly, an act of spontaneous order addressed the issue of vendor accountability to parents in Arizona. The first generation of ESA parents there organized their own listserv in order to give and seek advice on service providers and products. Arizona lawmakers originally designed the program for children with special education needs (they have since expanded eligibility to other poorly served student groups, such as those attending D- or F-rated public schools, foster care children, and those living on reservation territories). No state test is going to either reward or hold accountable an occupational therapist in any meaningful way, but this online town hall performs such tasks routinely and quickly.

This practice could and should be formalized to emulate new forms of market accountability that have emerged online. I live in Phoenix, where we have health inspectors for restaurants. At least, I guess we do—restaurant accountability for me comes from the far more brutal world of online restaurant rating services. Life is too short to be spending time and money at a place with low customer ratings, and there are plenty of highly-rated options available.

I don’t know what taxi cab “accountability” looked like before the recent and delightful advent of ride-sharing services. I do know, however, that when I use these services, I rate the driver on a five-star scale, and the aggregate score of the driver appears on the smart phone of each new customer. I also know that the driver rates me as a passenger. This is far more accountability than any taxi cab operating under any Ministry of Taxi Transport will ever achieve anywhere on the planet.

Can you imagine a formalized system of the Arizona listserv—one that borrows from the ride-share service experience and requires parents and providers to rate each other once a certain threshold of spending is passed?

I can too. It’s already growing ubiquitous in a great many other endeavors. Greatschools already collects parent reviews of schools, and online platforms allow students to rate college professors. Can you imagine allowing parents and service providers to access aggregated data? Are you a lousy service provider with bad results and high prices? How about a demanding and inflexible customer with unreasonable expectations? Let’s see how that works out for you.

Welcome to the exciting world of voluntary exchange with technology-enabled hyper-transparency.

Finally, let’s address the topic of academic transparency. ESA students have opted out of what is still largely a one-size-tries-to-fit-all system of schools with geographically defined attendance monopolies. We can argue endlessly about the accountability practices applying to that system, but it should be painfully obvious that, whatever their virtues, they do not fit into a freewheeling, multi-provider world.

Parents using account-based choice programs can use four or more service providers simultaneously. They can hire a certified tutor to help them get through that MIT high school MOOC, for example, while purchasing a community college course (many other combinations exist). I’m thrilled to let the parents and students relate what they thought about the tutor, the MOOC, and the community college course. I don’t much value the opinion of those who were not present for the tutoring and did not take the MOOC. As hardworking as program administrators are, they are neither omniscient nor omnipresent, and they don’t have the sort of direct experience that parents and service providers possess.

How will we know whether account kids are learning? The Nevada bill strikes an appealing balance in requiring the student to take a nationally normed reference exam. Aggregated scores should be made public, and gain scores should be properly studied by academic researchers. The responsibility for taking this test and providing the results should rest with the parent rather than any individual service provider.

Programs like the Nevada ESA program should be viewed as an opt-out of the public school system, not as an extension of public education practices into private schools, community colleges, or the Massachusetts Institute for Technology. Abundant experience with private choice programs over the previous two decades demonstrates that there will be no mad rush to the exits in public schools, but rather a steady increase in parents and students looking for different options and approaches than those available in the present system.

In this way, our contending urges to standardize and customize education can, in fact, peaceably coexist. The public system can continue to embrace customized approaches under a system of state standards, but those seeking something different (at least in Nevada) will have the opportunity to custom-build a multi-provider approach under a system of state oversight with broad and appropriate academic transparency.

Matthew Ladner is senior advisor for policy and research at Excel in Ed.