Dr. Gary Houchens: Achievement Effects of Scholarship Tax Credits

The Kentucky Board of Education, where I serve as a member, recently adopted a new school accountability framework. A key goal of the new system is to dramatically increase student achievement, especially for traditionally-underperforming groups. Scholarship tax credits are a proven policy strategy that has been shown to have positive effects on student learning. Kentuckians should embrace scholarship tax credits as a key tool in meeting our long-term education goals.

A scholarship tax credit encourages private donations to scholarship funds that help students from low and middle-income families attend tuition-based schools. These scholarship funds already exist in Kentucky and provide education opportunities to families who would otherwise have few choices in where their children can attend school. But far more students are eligible than the scholarship funds can currently assist. A tax credit would increase donations and help more families get access to a wider range of great schools.

Eighteen states already have scholarship tax credits and the results for student learning are encouraging. Florida hosts the nation’s largest scholarship tax credit program, with about 100,000 low-income students participating. A recent study by the Urban Institute compared college attendance rates of students who participated in the program to attend a tuition-based school with their demographically-similar peers who attended traditional public schools. Researchers found that, in addition to being from low-income families, participating students also started out low-achieving in comparison to Florida students overall.

The Urban Institute study found that students who attended tuition-based schools as a result of Florida’s scholarship tax credit program were 15 percent more likely to attend college than their similar peers. The impact on college attendance was even higher for students who participated in the scholarship program for four or more years.

Earlier research on Florida’s tax credit by Cassandra Hart and David Figlio found that the program may have positive effects on achievement for students in both public and private schools. The researchers found that when public schools were in close proximity to tuition-based schools attended by scholarship students, student achievement increased. The biggest boost in public-school achievement occurred the first year the scholarship program was introduced but gains persisted over time.

These findings are consistent with other research exploring the impact of school choice programs on a wide variety of outcomes. This research was summarized by the Friedman Foundation for Educational Choice in their 2016 report, A Win-Win Solution: The Empirical Evidence on School Choice. Evidence strongly suggests that school choice programs lead to improved learning outcomes for public schools and save tax payers money. The positive impacts of school choice are especially strong for students from low-income families and students of color.

Why does school choice improve student learning? Giving parents more education options, especially parents who are less affluent, increases the likelihood of finding the best school match for their child’s learning needs. Traditional public schools intensify their improvement efforts in response to these new choices available for families, but are no longer burdened with the challenge of trying to be all things to all students. In these ways, choice really is a “win-win” for everyone.

Kentucky, like most states, faces a steep climb to improve student achievement so that future generations may have the knowledge and skills to succeed in our global culture and economy. Scholarship tax credits are one powerful strategy the state should adopt for meeting that challenge

– Dr. Gary Houchens