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The New Frontier in Parental School Choice


This week, NC Family president John L. Rustin talks with Darrell Allison, President of Parents for Educational Freedom in North Carolina (PEFNC), about the next school choice frontier for our state, Education Savings Accounts (ESAs).

Darrell Allison discusses education savings accounts

“Family Policy Matters”
Transcript: The New Frontier in Parental School Choice

INTRODUCTION: Darrell Allison is President of Parents for Educational Freedom in North Carolina (or PEFNC). He is a great ally and leader in the ongoing effort to expand school choice options for parents and children in our state. Darrell and PEFNC were instrumental in the passage of North Carolina’s Opportunity Scholarship program, and a number of other educational initiatives, and we are so thankful for his leadership.

Darrell is with us today to talk about what many consider to be the next frontier for school choice in North Carolina, which is the establishment of Education Savings Accounts (or ESAs). We’ll be talking with Darrell about how ESAs work, the benefits, and what lies on the horizon for efforts to establish state-level ESAs in North Carolina.

JOHN RUSTIN: Let’s start with the big question about this issue that we’re discussing today. What are Education Savings Accounts in this context?

DARRELL ALLISON: ESAs or Education Savings Accounts are state funds that can be deposited in parents’ bank accounts to be used for education expenses, so parents can get to decide how to use these funds. If they want to use these funds for private school tuition, text books, tutoring or testing, or if they are a parent of a child with special needs, they can use the money for educational therapies. So all of these options are available with an ESA, which fundamentally empowers parents with flexibility and freedom.

JOHN RUSTIN: We’re certainly supportive of that whole notion. And let me say at the outset that these state-level Education Savings Accounts that we’re talking about today are not to be confused with the federal Coverdell ESAs that have been established that allow parents to set aside funds, tax-free, for future educational needs of their children. So these are a bit different in the structure of what we’re talking about on the state level vs. what exists currently on the federal level, even though they share the same name. And with that, Darrell, what specific ways would state-level Education Savings Accounts promote more parental choice in education?

DARRELL ALLISON: I believe ESAs are the new frontier in parental school choice. I think they promote widespread parental choice in education from schools to product to services. I think they open the door for true customization, really allowing parents to create an individualized education experience based on unique needs of each of their children. I see the day coming, John, when government gives families the allotment of funds based on the number of children in their family, and then those families can leverage those funds to customize their child’s education using all school models as a part of the process. Now, then the headache becomes what quality option will the family choose? I really do see that as kind of the future and the power that ESAs can ultimately have.

JOHN RUSTIN: It seems like a very common sense approach, and children have different education needs. I know as a parent of two children myself, they are vastly different, and any parent of multiple children, or a teacher, or anybody whose been around children for any amount of time, I think would readily testify to the fact that children do often have different areas that they may excel in, and other areas that may be more challenging. And being able to craft and structure an educational opportunity for those different children that will help to meet their specific needs is critically important, and who better to make those choices than parents.

DARRELL ALLISON: I think it just makes a lot of sense, John. I have two daughters, a 10 and 6 year old, and if we feel that way as fathers, even in our own household, two different kinds of school models if you will, or educational plans for each individual child, how much more the case for those children in our communities, in our state?

JOHN RUSTIN: Well it does. And Darrell, through a state-level ESA, how much funding would the State provide to parents, and how much freedom would parents have to use those funds on the educational options that are best suited for their children?

DARRELL ALLISON: Funding varies by each ESA program, but generally, like the portion of the per pupil funds that would be allotted to educate a child at public school. That amount could be anywhere from $5,000 to $6,000 or more depending on the specific program. The student with special needs may receive $10,000 or more. Parents have a great deal of freedom with ESAs, and they could take this money and use it to pay tuition or other approved educational expenses. In Arizona, for example, many families use the ESAs to pay for private school tuition, but they can also use it for testing, tutoring, on-line learning, curriculum, and education therapies. And Arizona’s program, like some others, even convinced parents to save and use the funds that they don’t use in K-12 for college tuition, which I think is pretty ideal.

JOHN RUSTIN: So essentially what is happening here through a state level ESA is that the tax dollars that parents have put into the public education system would essentially be returning back to them, enabling them to use those funds as they see best fit, correct?

DARRELL ALLISON: That’s correct, and generally though to trigger that kind of savings, it is usually at a portion of what it would be allotted for a child for a family that has children at public school. Just to keep back the idea that it is taking money away, you kind of create somewhat of a savings there, which we’ve seen in some of the other states.

JOHN RUSTIN: That’s an important point that I want to discuss a little bit further with you. School choice opponents often argue that ESAs will take money away from public schools and from public school students. Is that an accurate argument?

DARRELL ALLISON: The point I want to make is let’s reframe how we look at this. Fundamentally, ESAs are a market shift in our educational paradigm. The focus isn’t necessarily on funding schools; it’s more on the focus of funding students. I think we can talk about that fact here in North Carolina because we have 1.4 million children that attend traditional schools, but in just a few years we’re going to have over 300,000 kids in K-12 that are educated non-traditionally, if you look at the numbers of home schoolers, of public charter school enrollment, as well as private schools. And so from that standpoint, we’re really thinking of a paradigm shift, and ESA I think will take us there. It’s also true, as you point out, that ESAs have the potential to save taxpayers money on the long-term. The portion allowed per student that is often left in the state allotment. And so at a macro level in terms of how do we fund K-12 education, can ESAs not only have a double win here, providing families more customization in utilizing the various school models if you will, whether it be traditional, non-traditional, in order for that child to be educated adequately. And when you look at governments really struggling with what they’re going to do with Social Security, how are they going to deal with other major budget items, universally, not only federally but in state, is there a way where you can customize education and at the same time put us toward a trajectory that we’re having less allocation for education, but at the same time be more efficient and more effective in the overall product.

JOHN RUSTIN: When you look at our educational funding system for K-12 public education in North Carolina, essentially public schools will get a baseline level of funding for a variety of different needs, and then there is a funding per-child, that follows that child to the public schools. What we’re talking about here is just using a percentage of the funds that are allocated for that child, if their parents choose to move them to another school, a portion of those funds that are allocated for that student would follow that student to that other education opportunity, while a separate portion would remain at that public school. So, in essence, the public school is continuing to get funds that otherwise would have followed that child, so they’re not losing the base funding, but if that child goes to seek another educational opportunity, then a portion of the per-child funds would follow that student to that educational opportunity… Now, Darrell, how many states already have ESA programs in place, and what can we learn about those programs from the experience of those states?

DARRELL ALLISON: Five states have a passed ESAs. Arizona was the first in the nation to pass an ESA program, in 2011, for special needs students. That program has since been broadened to include students in failing schools, children of active duty military parents, and adopted children. The Arizona legislature is considering making the program universal. Other states with ESAs include Florida, Mississippi, Tennessee, and Nevada. Those state program target students with disabilities, although Nevada open eligibility included any student who had attended the public school in the preceding year. Nevada’s program is under court injunction as we speak. Florida’s program now serves thousands of special needs students. Mississippi began a pilot program in 2015, and Tennessee’s program will launch in 2017. So lawmakers in numerous other states are considering, or have considered ESAs.

JOHN RUSTIN: Great, thank you for that review. Darrell, the Opportunity Scholarship program is really flourishing in North Carolina, and there are currently plans to expand it. And that’s exciting to see a lot of interest among parents and students all across the state. Some of our listeners may be wondering, however, why we need Education Savings Accounts if we already have Opportunity Scholarships. How do these programs differ, and what benefits would ESAs provide that Opportunity Scholarships may not be able to at this point?

DARRELL ALLISON: We have to look back at not only Opportunity Scholarship program, but in 2011 we passed our first private school measure, which was special needs program…. In 2011, we had over quarter million children in public school with disability, and we felt like they needed additional options for many of those families that felt like the school that they were zoned to was just not meeting the needs there. And so with the induction of the special needs program, we are now allowing families to be able to get a scholarship, a grant if you will, of $8000 per year to be able to find that education model, whether it be private school or therapeutic needs there a family is able to use that for those children. And then with the Opportunity Scholarship program, again we go back to the data from the Department of Public Instruction we do that for low-income working-class families, a vast majority of those students that were in the public system there was great disparity in terms of their performance, in terms of the quality of school and education. And so you look at the numbers that have applied, over 12,000 applications, John, since 2013, and there’s a huge demand from working-class families that are looking for additional education options that’s going work for them. And so I think it’s a wonderful time for education. Again, that new frontier, what does parental school choice look like in the next five to ten years if you will? And also [we need to] look at the successes, the challenges maybe in other states, and maybe identify the weaknesses, and maximize the positives. Maybe this is something that our state can really get behind here, and we’ll have the perfect compliment to what we already have here in K-12 education.

JOHN RUSTIN: What’s next for ESAs in North Carolina? Do you think we can we expect a bill to be introduced in the General Assembly in the near future?

DARRELL ALLISON: Yes, I think so. Last year, a bill was introduced that would have established personal savings accounts for disabled students. That bill did not secure passage, but it represented growing support for what is clearly a kind of a new frontier in educational choice. And I think that we’ll not only get a bill introduced, but have more conversation around the usage of ESAs.

JOHN RUSTIN: Great, we look forward to that opportunity. Darrell, as we close I want to give you an opportunity to tell our listeners where they can go to learn more about the work of Parents for Educational Freedom in North Carolina.

DARRELL ALLISON: Your listeners can visit our website at to learn more about school choice options in North Carolina, such as the Opportunity Scholarship program and Students with Disabilities grant. And families that are interested in learning whether they would qualify for Opportunity Scholarship Program can visit us at

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