The intersection of ESAs and digital learning (part 2)

An earlier blog post discussed educational savings accounts in the context of other forms of educational choice. Those choice options intersect with digital learning in several ways:

• Many online schools and hybrid schools are charter schools. In fact, it’s nearly certain that in the United States, the growth of online learning would have been very different if charter school laws did not exist. Many of the earliest online and hybrid schools, in states as diverse as Pennsylvania, Colorado, and California, were charter schools.

• Links between private school vouchers and online/hybrid schools are not so clear. Although plenty of private online and hybrid schools exist, we are not aware of any large enrollment online/hybrid private schools that have tapped significantly into voucher funding.

• Course choice was envisioned, in most states, as being largely or entirely based on enrollment in online courses. In some states such as Florida and Georgia, course choice policies were linked closely to state virtual schools. Other states, such as Utah, developed policies based on the expectation that a wide range of online course providers would be available.

• ESAs hold potential for recipients to use funds for online/hybrid schools and courses. Most ESA recipients already have the option to use public funds to attend private online and hybrid schools. (However, some states, including Florida, have restricted the use of these funds for online schools—in an oversight that we expect may be corrected given Florida’s historical support of online learning.)

The intersection of ESAs, micro-schools, and digital learning

The policy landscape gets even more complicated when we look at the combination of existing online charter schools, ESAs, and microschools.

Microschools have been a growing trend in the past couple of years, although enrollment data are lacking. In 2022 EdChoice estimated that just over a million students were in microschools or learning pods, but as the authors explained, they were using a very broad definition that likely had very high overlap with families that identify as home-schooling. Because of this, it’s unclear how much had changed on the ground, versus just a difference in families being more likely to use the term “microschool.”

In the absence of public funding availability, it seems likely that the microschool movement will grow slowly, due to the limit on the number of families willing and able to fund their children’s education. But both online schools and ESAs offer the opportunity for families to tap into public funds when using a microschool.

An example of a microschool tapping into charter school funding is the Queer Blended Learning Center in Phoenix, a microschool whose students are officially enrolled in one of two online charter schools. This is one example; others exist in Arizona and probably in some other states.

In ESA states, those same students could tap into ESA funds to attend a microschool like the QBLC. Whether online charter school enrollment, or tapping into ESA funds, is easier for the student and family is likely a state-by-state issue. There is even the potential situation in which two students in the same school would be tapping into different public funding sources, although we are not aware of any examples of this.

Trajectory and outlook

The previous blog post noted that ESAs in 2023 went from being overlooked to (maybe) overhyped.

The overlooked element is captured by early 2023 articles suggesting that there was little attention to education policy and even less activity. In fact, while so much media attention was on critical race theory, Moms for Liberty, book bans, and similar topics that dominated Fox News and MSNBC, the more important activity was in the debating and passing of ESAs.

Another important element of ESAs was that although they are often considered to be driven by conservative learning politicians and activists, in some states (e.g. Florida and Arizona) these same legislatures were passing significant pay increases for teachers in public schools. These pay increases, by design or not, helped blunt the pushback that these laws were anti-public education.

Through the first half of 2023, ESAs went from being under the radar to being recognized as the main source of education policy energy, as many states considered ESAs.

And then a funny thing happened in some red-learning states. In Georgia, pushback from rural areas killed the ESA law being proposed. The effort to pass ESAs in Texas has also slowed. In other states, the political response led to compromises that either limit the number of students eligible, or slow the rollout over several years, as in Iowa—time in which perhaps the number of eligible students will be reduced. There are already signs of opponents looking at reducing the impact of ESAs, or attempting to reverse course altogether, in several states.

The outlook for 2024 and beyond depends on two data sets that we will be watching.

The first is the number of students and families taking part in ESAs, especially in the few states that allow universal or near-universal access. It’s too early to tell if ESA uptake is going to grow to be similar in size to homeschool students, private schools, charter schools—or perhaps bigger than all of them combined. These data are very slowly coming into view, partially because of the slow rollout and partially because of data limitations. If ESA uptake grows, it is highly likely that ESA students/families will become a major part of the digital learning landscape, much as charter schools are now.

The second number we will look at in 2024 is the number of states that pass new ESA laws, net of any that restrict already-passed laws. A corollary question will be whether any purple states—or even blue states—pass such laws, which would suggest far broader appeal than if ESAs are limited to conservative states. Here again, Arizona will be a bellwether, because politically Arizona has been very conservative, but it is trending more moderate. If a politically moderate Arizona preserves ESAs, that will be a sign of their staying power.