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Thursday, November 10, 2016

How Regulation of Private Schools Hurts the Poor

Costly regulation reduces supply and causes the best schools to not participate.

Every private school choice program in the United States monetarily benefits private schools at the expense of an increased regulatory burden.  Even decision-makers that support private school choice agree that some degree of quality control is essential for programs to be successful.  However, in attempting to control quality through regulation, bureaucrats inadvertently limit the quality of schooling options available to disadvantaged children across the United States.

Regulation Costs Reduce Supply

The most successful private schools have the most to lose from regulations.

How can an attempt to force schools to be high-quality produce contrasting results?  In order for policy-makers to enforce a certain minimum level of quality, they must first define what educational quality ought to look like.  One problem here is that children and parents are so diverse that the selected definition is sure to fail for an enormous amount of families.  Perhaps even more problematic is the fact that adhering to the designated standards introduces additional costs to private schools without a clearly substantial quality improvement.

The 61 private school choice programs across the United States include many regulations that attempt to control quality levels such as teacher certification, financial audits, standardized testing, open-admissions and the prohibition of parental copayment.  These all serve as additional costs to private schools.  Since school leaders make the cost-benefit decision of whether to participate in a given private school choice program, regulation costs decrease the number of options available to families.

The Best Schools Are The Least Likely to Participate

And which private schools are the most likely to accept participation?  Obviously, the schools in financial distress will have the largest incentive to accept program funding.  Furthermore, the private schools that are highly-specialized and already have a successful educational model have the most to lose from regulations.  The result?  Quality controls ensure that the children most in need end up with defective schools.

Standardized testing will force private schools to emulate the educational model children are trying to escape.

Specifically, teacher certification requirements limit the supply of teachers that private schools can employ.  A supply reduction increases the price that a private school must pay for any given teacher, while simultaneously reducing the number of high-quality teachers to choose from.  Standardized testing requirements guarantee that private schools will have to change their educational model to mirror the very schools that disadvantaged children are so desperately trying to escape.  Forcing private schools to accept voucher funding as full payment is particularly costly for high-quality schools that pour large amounts of resources into the education of their students.  This regulation is equivalent to prohibiting disadvantaged people from spending resources on food above the determined food stamp amount.  Perhaps even more importantly, this provision eliminates much of the financial incentive necessary for market entry.

Why They Want to Regulate In the First Place

If the attempt to control quality harms children, why do policy-makers still try?  The ultimate reason for these regulations is that elite decision-makers believe that parents will not choose schooling options that are beneficial to their children or society.  Allowing parents to choose for their own children requires bureaucrats to have faith in the masses to make rational choices.  What if parents make the wrong decisions?  Elites would surely feel responsible for those bad decisions, and they do not want to risk experiencing guilt.

We could easily remove all of these negative consequences by adopting the optimal form of quality control: educational choice through families.  By simply allowing parents and children to choose their own educational products, we ensure that low-quality options disappear while the presence of high-quality options grows.  Besides, even if parents do occasionally make inadequate decisions for their own children, shouldn’t we prefer that to inadequate decisions made by a bureaucrat in an office, hundreds of miles away?

  • Corey A. DeAngelis is the Director of School Choice at Reason Foundation and an adjunct scholar at Cato Institute.