Tuesday, October 30, 2007

To What Extent do Vouchers Make Private School Affordable?

If tuition is $4,500 (the PCE number), vouchers have a significant impact on affordability across both family size and income. If tuition is $6,935 (a Deseret News number), vouchers have very little impact on affordability. I also did the numbers for sending my 2 kids to Ivy Hall at $5,600 per kid. Vouchers have a negligible impact in making Ivy Hall affordable for us (it's not, if you were curious).

Assumptions, model and detailed results given below. If you want the Excel spreadsheet to play with on your own, leave a comment below and I'll send you a copy.

The following graphs express the cost of vouchers as a percentage of annual income assuming that half of eligible children attend private school in a 2 parent home (except for single parent and single child homes). In the graph, the horizontal axis is annual family income. The vertical axis is number of children attending private school. The values on the vertical axis are 1, 1, 2, 3 (sorry for the lack of labels, my medicine kicked in and it happens to cause excruciating headaches and fatigue).

I decided that "affordable" means that tuition accounts for 5% or less of the family income. Affordable is colored blue. "Might be affordable" means that tuition is between 5 and 10% of the family income. Scenarios which might be affordable are colored orange. "Not affordable" means tuition is greater than 10% of the family income.

First up, we'll assume private school costs $4,500 per kid as assumed by Parents for Choice in Education.

Without vouchers, private school is affordable for only families making more than $110,000 and with less than 2.5 kids in private school. Not so good. Private school is maybe affordable for families making more than $60,000 a year and for larger families with more income.

The impact of vouchers on affordability with tuition at $4,500 is striking. With vouchers, all but large families with low income can afford or might be able to afford private school. Using the PCE tuition assumption, vouchers have a significant positive impact on affordability.

Next, we'll redo the numbers using the amended Deseret News numbers, which includes some kind of weighted average tuition which is $6,935.

If tuition is $6,935 then private school is affordable without vouchers only for small families making around $150,000 a year and might be affordable for small families making $70,000 or more.

Vouchers have little impact if tuition is $6,935. There's no significant change in families that can afford private school. Some small families making around $50,000 may be able to afford private school.

We happen to send our twins to a private preschool, all preschools are private so no sympathy cards are being played here, and I sanity-checked my affordability assumptions on our family budget. No problem. We'll send them to private kindergarten next year and kindergarten will be affordable because we'll make it affordable, but that's another story for another time ... maybe later this week depending on how things go.


Anonymous said...

Did you make the graphs MIchael?

dawnawanna said...

Way better than listening to my physiology professor...

Better get back to studying the drugs...

Anthony Barney said...

Have you read the Washington Post article this morning? http://www.washingtonpost.com/wp-dyn/content/article/2007/10/31/AR2007103102549.html

Very interesting, the whole nation is watching what Utah decides about bringing competition to education.

On the one hand, I really appreciate that the blessing of education is a right in our country, and worry that lack of support for the public system may cause it to atrophy and die, the natural result of which is that Public education will no longer be a "right", because the system simply won't exist anymore (looking far down the consequence chain).

On the other hand, I am a firm believer in the free market system, competition will make education better, and this referendum seems to make the creation of competition more affordable for common people (like me). But what are the long term effects?

dawnawanna said...

I worry about privatized education. I just think a lot of people would get left behind. I would prefer to invest more money into to public education rather than paying to privatize. I also think our society benefits from well-educated individuals.

It kind of reminds me of the healthcare debate... Those that have money get good healthcare. Those that have money get good education. Not that I'm proposing socialized healthcare, but there has to be a better way to make sure that everyone gets good healthcare. Along those same lines, there has to be a better way to make sure that everyone gets a good education (and I'm definately not a supporter of vouchers). I wonder what Utah (and Idaho, where I live) would be like if the states invested a little more money in the school system.

Mike Jones said...

Tony: thanks for the pointer to the Washington Post piece. It was interesting. Yours is the most sane rational statement on vouchers that I've read in a long time. It was refreshing. As I've thought about this issue, I feel two things. First, it's important. Second, there's a lot going on here and there's not an easy answer. I feel better having decided to vote no, but I may still change my mind.

The UEA kills me. I would love for them to loose an important public political battle and to force more competition. But I haven't yet been able to convince myself that this is the right way to do it.


I am just glad that I don't know whether or not I am allergic to fecal matter in the air. (But I do want to go to India someday)

Anthony Barney said...

Thanks for bringing up India Mike, I went there last May (for those who don't know) and the public school system there (as in most other countries) really sucks rocks...to the point of it doesn't really even exist, not in a significant, change the way a society learns, works and lives sort of way. Mostly the children of the very wealthy go to school, and all the other children begin to work to help support the family as soon as they can carry a bottle of water (I saw multiple little tiny string beans selling bottles of water at heavily traveled locations, such as train stations and marketplaces).

That was yet another confirmation to me that the blessing of public education is not something we should take lightly. Dawnawanna really says it when she states that we should struggle to make public education better, rather than abandon it to privatization.

My children go to a charter school, which so far for my kids has been a perfect solution to the lame public education problem: 1)It is still a public school and has full access to the same public school funding as any regular district school. 2)It is still accountable to all the same controls as any district school (I find this less important, but some people seem to think it matters) 3)The school is privately administered and the school administration (not the local population) determines the class size and the resource allocation to those classes. 4)Parents still have the choice to continue at the charter school, find a different charter school, or go back to the district school serving their area, so the administration IS accountable to their source of income in a very real "free market" competitive way. 5)Since policy, methods and resource allocation are determined by the administrators of the charter school (not the voting public at large) the decisions made are much more under your control as a finite parent: you can walk in to the school and discuss the decisions the principal has made and if you are reasonable, rational, and correct, there is a good chance that something will change, while a standard district school will still be hogtied because the other 1 million people who voted all over the state still have a stake in that.

Well...this is getting long, in short: Charter schools are a pretty good way to introduce competition (and it's beneficial effects) into the public school system, while still retaining the public school system in full effect.

Anthony Barney said...

By the way Mike, I read Freakonomics and really enjoyed it. I met a woman named Tristan the other day and thought of it.

Mike Jones said...

I love charter schools. When I say "focus on public education" I mean focus on "education which has no additional cost to the parents." Charter schools fit that niche nicely while providing choice, competition and all that.

My other sister is working on forming a charter school in her neighborhood.