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Paul T. Hill
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Guest blogger Paul T. Hill is the director of the Center on Reinventing Public Education and the author of a recent paper in Fordham’s...

director of the Center on Reinventing Public Education

Guest blogger Paul T. Hill is the director of the Center on Reinventing Public Education and the author of a recent paper in Fordham’s Creating Sound Policy for Digital Learning series, “School Finance in the Digital-Learning Era.”

have long regaled us with predictions about technology dramatically
improving education by giving millions more students access to the very
best teachers and deploying computer-based systems that allow them to
learn at their own pace at whatever time and place works best for them.
This vision is now becoming a reality, partly because tight budgets are
forcing K-12 schools to employ fewer teachers and boost the productivity
of those who remain.

Saving money is only part of technology’s educational potential,
however. More important is individualization and rapid adaptation to
what a student is learning, leading to the possibility of greater and
more consistent growth. Managing equipment, web links and vendor
contracts is also far nimbler than re-organizing people.

All this potential notwithstanding, however, plenty of policy and
structural barriers stand in the way of widespread adoption of
technology in K-12 education. Perhaps the toughest of these is our
traditional approach to school funding.

Simply put: Our current education finance system doesn’t actually
fund schools and certainly doesn’t fund students. Rather, it pays for
district-wide programs and staff positions. Much of it is locked into
personnel contracts and salary schedules—and most of the rest is locked
into bureaucratic routine. It’s next to impossible to shift resources
from established programs and flesh-and-blood workers into new uses like
equipment, software, and remote instructional staff. Yet to foster and
maximize technology-based learning opportunities, we must find ways for
public dollars to do just that—and to accompany kids to online providers
chosen by their parents, teachers, or themselves.

Today’s school funding arrangement developed haphazardly, a product
of politics and advocacy, not design. Some of the money comes from the
state, some from Washington and some is generated locally. This
translates into a labyrinth of rules and regulations connected to a maze
of separate funding paths, each with its own “allowable uses” and
reporting requirements. Education innovators get trapped in this
maze—which is even harder to escape when budget totals are flat.

This is a particular problem for digital learning, because today’s
funding arrangements assume that a student will attend a specific
school, where salaries and other costs are paid by the district. Little
money actually flows through the school. Most of the budget is accounted
for by staff positions that are centrally allocated according to school

Because funds cannot easily flow into new uses, promising innovations
cannot be fully developed or persuasively demonstrated in K-12
education. Which is good reason for visionaries and innovators to take
their best technological applications into realms other than education.

What would it take for education funding
to be transformed into a system that promotes digital learning and
technological innovation? Public dollars would have to go to the best
possible instruction for students utilizing any means that can work. Our
system for funding public education would need to:

  • Fund education, not institutions;
  • Move money as students move;
  • Pay for unconventional forms of instruction as readily as for conventional schools; and
  • Withhold funding from ineffective programs
  • Encourage innovation by ensuring people who had new ideas about
    instruction could, if families wanted to use them, get public

If states and localities (and Uncle Sam) would combine all the money
they now spend on K-12 education and divide it up by enrollment, with
the same or a weighted fraction of the total assigned to each child, and
then distribute these dollars to schools in the same way, they would
sweep away the major obstacles to innovation and improvement in today’s
funding system. They would also compel a dramatic reduction in overhead.
Money would not be held centrally to preserve particular schools or
programs, but would go wherever children are educated. This would allow
new uses of funds, an essential precondition to innovation and
widespread use of digital learning.

A technology-friendly funding system would apply to all students no
matter where they receive their education and no matter how many
instructional providers serve them. To make this happen, some government
entity—probably the state—would need to assemble all of the funds
available from all sources, keep an account for every student, and
faithfully allocate its contents to whatever school or education program
a student attends. Each student’s account would, in a sense, constitute
a “backpack” of funding that the student would carry with her to any
eligible school or program in which she enrolls—and wherever it may be

If a family decided to rely on one school or instructional provider
for all of a child’s education, all of the money would go to that school
or provider. Some youngsters, however, would enroll in courses provided
by different organizations, in which case the funds would be divided.
Students and families would be free to shop for the best combination of
courses and experiences their backpack funds could cover. Providers
would compete, both on the quality and effectiveness of their services
and on cost. States could create a list of ineffective providers that
were ineligible to receive public funds.

Every school or independent instructional provider would have to post
its prices. No school or on-line provider could charge more than the
full amount in a student’s backpack.

This portable, flexible, student-based funding system would instantly
impact the budgets of existing schools and would create powerful
incentives for them to improve their offerings so as not to lose pupils
to other institutions or course providers. At the same time, innovators
(educators and social service professionals with new ideas) would be
encouraged by knowing that they could get full funding for every student
enrolled in their school or program.

Funding systems can’t cause innovation: they can only interfere with
or foster it. Whether innovation occurs, at what pace, and to what
ultimate benefit, depends on other factors. But a finance system such as
that described here would make promising breakthroughs much more
likely—and and much more likely to scale rapidly. School finance would
be placed into the service of improved learning rather than left as a
major impediment to it.

For more on this issue by Paul T. Hill, download “School Finance in the Digital-Learning Era.”

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