School Choice: Current Legislation

School Choice: Current Legislation

Order Code IB98035
CRS Issue Brief for Congress
Received through the CRS Web
School Choice:
Current Legislation
Updated May 5, 2006
David P. Smole
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Methods of Supporting School Choice
Intradistrict Public School Choice
Interdistrict Public School Choice
Charter Schools
Tax Subsidies
Subsidies to Private Schools
School Vouchers and Supplemental Educational Services
Current State and Local School Choice Programs Involving Private Schools
Current Federal Choice Programs
ESEA Programs
Coverdell Education Savings Accounts
DC School Choice Incentive Act
Temporary Emergency Impact Aid for Displaced Students
Major Types of Proposals to Expand Federal School Choice Support
Choice Options in Existing Programs
Demonstration or Targeted Choice Programs
Block Grants
Tax Subsidies
Why Is There Debate over Federal Support of Expanded School Choice?
LEGISLATION
Proposals in the 109th Congress
Selected House and Senate Bills
President’s FY2007 Budget Request
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School Choice: Current Legislation
SUMMARY
Legislative proposals to provide parents
— Innovative Programs;
with enhanced opportunities to select their
children’s schools are varied and widely
— Public Charter Schools Programs;
debated. Many school choice proposals have
been made with the intent of improving the
— Voluntary Public School Choice program;
quality and increasing the range of educational
opportunities available to students. Some
— Magnet Schools Assistance programs;
proponents of school choice suggest that the
availability of more school choices will both
— Fund for the Improvement of Education;
provide more students with access to better
and
schools and also induce public schools to
improve through market competition. Some
— Unsafe School Choice: school choice for
opponents express concerns about choice
students who are victims of violent crimes or
programs, such as the potential for redirecting
who attend unsafe schools.
public education funding and possible varia-
tion in the quality and availability of schools
During the first session of the 109th
from which to choose.
Congress, emergency federal aid for public
and private schools enrolling students dis-
School choice has been an active issue
placed by Hurricanes Katrina and Rita was
during the past several Congresses. The 108th
approved for the 2005-2006 school year.
Congress enacted a school voucher program
for the District of Columbia — the DC School
In the second session, Congress may
Choice Incentive Act — as part of the FY2004
consider school choice legislation to:
Consolidated Appropriations Act. The 107th
Congress expanded the federal role in support-
— authorize tax credits or deductions for
ing elementary and secondary (K-12) school
families’ K-12 education expenses, or tax
choice by authorizing distributions from
credits for contributions to charitable organi-
Coverdell Education Savings Accounts
zations that support school choice;
(ESAs) to be used for K-12 education ex-
penses (including private school tuition), and
— establish a new school choice program to
by enacting the No Child Left Behind Act
fund vouchers for qualified K-12 educational
(NCLBA), which amended and extended the
expenses, such as private school tuition or
Elementary and Secondary Education Act
supplemental educational services;
(ESEA). School choice is supported under the
following ESEA programs.
— revise the criteria specifying when or how
school choice and supplemental educational
— Title I-A: public school choice for students
services must be provided under ESEA Title
attending schools that do not make adequate
I-A to children assigned to schools and local
yearly progress (AYP) for two or more years;
educational agencies (LEAs) identified for
improvement; or
— Title I-A: supplemental education services
for low-income students attending schools that
— amend the terms and conditions of the DC
do not make AYP for three or more years;
School Choice Incentive Act.
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MOST RECENT DEVELOPMENTS
On December 30, 2005, the Hurricane Education Recovery Act was enacted as part of
P.L. 109-148. Among other provisions, it authorizes the Secretary of Education to award
temporary emergency impact aid to support the education of students displaced by
Hurricanes Katrina and Rita, regardless of whether their parents chose to enroll them in
public or non-public schools. Up to $6,000 is authorized to be made available per displaced
student [and up to $7,500 per displaced student served under the Individuals with Disabilities
Education Act (IDEA), Part B] for expenses incurred during the 2005-2006 academic year.
The program sunsets August 1, 2006.
On May 4, 2006, the Senate approved H.R. 4939, the Emergency Supplemental
Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006,
which among other things would provide $650 million to support the education of students
displaced by the 2005 Gulf Coast hurricanes. Of that amount, $300 million in supplemental
funding would be provided to carry out the Temporary Emergency Impact Aid for Displaced
Students program authorized under P.L. 109-148.
BACKGROUND AND ANALYSIS
According to the National Center for Education Statistics (NCES), during the 1990s,
the proportion of the nation’s school children attending schools of choice increased modestly,
with the increase due primarily to greater numbers of children attending chosen public
schools. Across all income levels, greater proportions of students attended public schools
of choice in 1999 than in 1993. However, among students attending schools of choice
(whether public or private), those from lower-income families were more likely to attend a
public school of choice, whereas those from higher-income families were more likely to
attend a private school. Despite modest growth in the exercise of school choice, by the end
of the decade, three-quarters of elementary and secondary school students still attended a
public school to which they were assigned. (U.S. Department of Education, National Center
for Education Statistics, Statistical Analysis Report, Trends in the Use of School Choice:
1993 to 1999, May 2003.) NCES also has found that as of 2003, approximately 1.1 million
students are being homeschooled in the United States, up from an estimated 850,000 in 1999.
(U.S. Department of Education, National Center for Education Statistics, Issue Brief, 1.1
Million Homeschooled Students in the United States in 2003, July 2004).
The federal government and many states and localities have implemented numerous
policies and programs that have enhanced parents’ ability to select the schools their children
attend, contributing to the modest growth in the exercise of school choice observed over the
past decade. While many school choice policies and proposals have become popular and
broadly support approaches toward increasing students’ access to diverse educational
opportunities and effecting elementary and secondary education reform, others remain
controversial and divisive.
This issue brief provides an overview of current local, state, and federal policies and
programs that support school choice and identifies and summarizes recent federal school
choice legislation. It is updated regularly to reflect congressional action on legislation
concerning school choice and related developments in states and localities.
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Methods of Supporting School Choice
Students from families with sufficient resources and capabilities may be considered able
to choose from among a wide array of school options. For many students, however, the
extent to which they and their parents can exercise school choice depends upon the scope of
public policies and programs implemented at the federal, state, and local level. While
existing federal, state, and local programs that support school choice with public resources
have a variety of features, they generally fall into six broad categories.
Intradistrict Public School Choice. Students may choose among some or all the
public schools within their home school district. Open enrollment plans, magnet schools
(created to promote voluntary school desegregation), and alternative schools also are
examples of intradistrict choice options.
Interdistrict Public School Choice. Students may choose to attend public schools
outside their home school district. Included in this type are special school districts, such as
secondary education districts providing vocational or technical education and training, and
some magnet schools.
Charter Schools. Students may choose to attend public schools operating under
charters granting them greater operational autonomy in exchange for increased accountability
for outcomes. A charter school may be a school within a local educational agency (LEA) or
may be considered its own independent LEA. Virtual charter schools function through the
electronic exchange of information between student and teacher, such as from a student’s
home via the Internet, and typically do not have a common education facility.
Tax Subsidies. The federal and some state tax codes provide deductions or credits
supportive of school choice. These include the exemption from taxation of income used for
elementary and secondary education expenses, such as through federal Coverdell ESAs and
certain state deductions or credits for educational expenses or contributions to school tuition
organizations (STOs), which provide private scholarships to children. The federal tax code
also allows deductions for interest paid on a home mortgage, as well as state and local taxes.
These deductions act to subsidize the cost of families exercising their choice to reside in
desired school districts or attendance areas, which often have higher property values and
higher amounts of deductible local property taxes or home mortgage interest payments.
Subsidies to Private Schools. Private non-profit schools may be able to provide
educational services at more attractive prices partially as a result of the provision of selected
publicly funded services to private school pupils (e.g., transportation, health, and special
education services), the deductibility from taxation of certain contributions received by them
or their parent organizations, and their tax-exempt status.
School Vouchers and Supplemental Educational Services. Parents may be
granted vouchers that they may use to pay a portion of or the total cost of full-time
attendance at a private school. Vouchers are sometimes referred to as scholarships or tuition
certificates. Parents also may be granted the opportunity to select the provider of
supplemental educational or tutorial services for their children in much the same way as
under a voucher program.
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There are also privately financed choice options. For example, private groups (such as
STOs) have established programs in many localities to help pay tuition and related costs for
mostly low-income children to attend private elementary and secondary schools. Also, many
families choose to homeschool their children.
Current State and Local School Choice Programs
Involving Private Schools
Of policies and programs being implemented in states or localities, most involve only
public schools — whether selected schools within an LEA or school district, all schools in
an LEA, all public schools in a multi-LEA region or state, or charter schools. School choice
programs in which vouchers are provided to a limited number of pupils for attendance at
private (including religiously affiliated) schools currently exist in Wisconsin, Ohio, Florida,
and Utah. In Maine and Vermont, public funding has long been provided to allow children
who reside in areas without public schools to attend private schools.
The Milwaukee Parental Choice Program provides state funding for low-income
students to attend private schools located within Milwaukee. When first implemented in
school year 1990-1991, choice was limited to non-sectarian private schools. In the 1994-
1995 school year, the program was expanded to include religiously affiliated schools.
Students in kindergarten through grade 12 are eligible to participate. During school year
2004-2005, parents were eligible to receive vouchers set at the lesser of $5,943 or the private
school’s per-pupil costs (for tuition, operating expenses, debt service, etc.), which they then
submit to the school for payment. During the 2004-2005 school year, 15,035 students
attending 117 schools participated in the program. (State of Wisconsin, Department of
Public Instruction, School Management Services).
The Cleveland Scholarship and Tutoring Program, first implemented in the 1996-1997
school year, allows students in kindergarten through grade 8 to apply to receive scholarships
to enable them to attend a private school located within the boundaries of the Cleveland
Municipal School District or a public school in an adjacent district; or to receive tutoring
grants for tutorial services delivered by a private or governmental provider. Students from
low-income families are given priority in the allotment of scholarships. Students who
received scholarships in prior years may continue in the program through grade 12. Parents
of students attending private schools are reimbursed by the state for a percentage of tuition
up to a maximum amount depending on grade level. Families with incomes below 200% of
the poverty line may receive scholarships for 90% of tuition, up to a maximum of $3,000 for
grades K-8 and up to $2,700 for grades 9-10. Families with incomes at or above 200% of
the poverty line may receive scholarships for 75% of tuition, up to a maximum of $2,250.
Participating private schools must agree to charge students in families with incomes below
200% of the poverty line tuition of no more than 10% above the scholarship amount, all of
which may be satisfied by in-kind contributions or services. Students in families with
incomes at or above 200% of the poverty line may be charged the difference between the
scholarship payment and the school’s actual tuition. (Title 33, Ohio Revised Code,
§ 3313.97). During the 2004-2005 school year, 5,675 students received tuition scholarships
(SchoolChoiceInfo.org. “Cleveland Scholarship and Tutoring Program Student Enrollment.”
(based on data reported by the Ohio Department of Education, available at [http://www.
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schoolchoiceinfo.org/facts/index.cfm?fpt_id=5&fl_id=2].) No adjacent public school
districts have elected to accept students under the program.
Since 2004, the Pilot Project Special Education Scholarship Program has operated in
Ohio. Under the program, the Ohio Department of Education awards scholarships of up to
$20,000 to the parents of children who are in preschool through grade 12 and who have been
identified as autistic and are entitled to receive special education and related services from
their resident school district. The scholarships may be used to pay the costs of enrolling the
child in a public or non-public special education program other than the one provided by the
child’s resident school district, but are limited to services specified in the child’s
individualized education program (IEP). The program was recently made permanent.
Also in Ohio, a new program, the Educational Choice Scholarship Pilot Program, will
be implemented for the 2006-2007 school year. Under the program, students in kindergarten
through grade 12 who are assigned to schools (outside of the Cleveland Municipal School
District) that have been declared to be in a state of academic emergency for three consecutive
years will be eligible to receive scholarships to assist in paying the costs of tuition to attend
a private school. Scholarships will be awarded according to a lottery; however, students
from families with incomes at or below 200% of the poverty level will be awarded
scholarships first. The maximum value of scholarships will be $4,250 for grades K-8, and
$5,000 for grades 9-12. Participating schools will be prohibited from charging scholarship
recipients from families with incomes at or below 200% of the poverty level tuition in excess
of the scholarship amount; however, schools will be permitted to charge other students the
difference between the scholarship amount and their normal tuition amount. Up to 14,000
scholarships may be made available.
In Florida, since 1999, Opportunity Scholarships have been made available to pupils in
grades K-12 assigned to low-performing public schools that receive an ‘F’ rating under
Florida’s A+ Education Plan for any two years during a four-year period. However, on
January 5, 2006, the Florida Supreme Court ruled in Bush v. Holmes that the Opportunity
Scholarship Program (OSP) is in violation of the Florida state constitutional requirement that
the state provide a “uniform, efficient, safe, secure, and high quality system of free public
schools.” The program is being allowed to continue through the end of the 2005-2006 school
year.
Under the Florida OSP, recipients of vouchers have been able to use them to pay either
private school tuition or the costs of enrolling in another public school in the same or a
neighboring county. Vouchers were valued at up to the lesser of the amount of funds that
would be available to the public schools for the child’s education, generally between $3,600
and $4,300, or the tuition and fees at the private school. Participating schools were required
to accept the scholarship as payment in full for tuition and fees. School districts have been
required to provide transferring students with transportation to public schools within the
same district, but not to out-of-district public schools nor to private schools. For school year
2005-2006, 15 public schools were designated as failing schools. (Floridachild.org,
“Opportunity Scholarships — The Basics for Families,” at [http://floridachild.org/
opportunityscholarships/basics.html]).
Florida also operates the John M. McKay Scholarships Program for Students with
Disabilities, distinct from the Opportunity Scholarship Program. (The program is not
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affected by the ruling in Bush v. Holmes.) Under this program, all pupils with disabilities
who attend Florida public schools may receive a voucher to attend a public or private school
of their family’s choice. The value of the voucher is based on the amount of aid that would
be available to the public schools for the child’s education and is dependent on the nature of
the pupil’s disability. Generally it ranges between $4,500 and $21,000. (Alan Richard,
“Florida Sees Surge in Use of Vouchers,” Education Week, September 5, 2002). If the
voucher amount is insufficient to cover the full cost of tuition and the school does not accept
the voucher as payment in full, families are permitted under the program to make additional
payments to the private school, although most families pay either nothing or less than $1,000
above the voucher amount. During the 2002-2003 school year, 9,202 students participated
in the program. (J. P. Greene and Greg Forster, Vouchers for Special Education Students:
An Evaluation of Florida’s McKay Scholarship Program, Center for Civic Innovation, no.
38, June, 2003).
In Utah, the Carson Smith Special Needs Scholarship Program authorizes the awarding
of vouchers valued at up to $5,700 per year to enable students with disabilities, aged 5 to 19,
(and in certain instances, up to 22), to attend private schools. To be eligible to receive a
scholarship, a student must either: (a) in the previous year have been enrolled in a public
school, have an individualized education program (IEP), and have been accepted to an
eligible private school; or (b) have been accepted into an eligible private school specializing
in serving students with disabilities. (Utah Enrolled Bill H.B. 249, the Carson Smith
Scholarships for Students with Special Needs Act, enacted March 10, 2005, codified at Utah
Code Annotated §§ 53A-1a-701 to 53A-1a-710).
Some states support private school choice through tax policy. Arizona provides tax
credits to individuals for contributions to STOs that provide scholarships to students to meet
the costs of private school attendance. Florida provides tax credits to corporations that fund
organizations providing scholarships to low-income children. Pennsylvania also grants
corporations tax credits for contributions to organizations that award scholarships allowing
children to attend the school of their choice. Additionally, Illinois and Iowa allow
individuals to claim a tax credit for certain educational expenses, including private school
tuition, and Minnesota allows tax credits and deductions for similar expenses. (Krista Kafer,
School Choice 2003: How States Are Providing Greater Opportunity in Education, The
Heritage Foundation, 2003. See also NSBA Voucher Strategy Center, National School
Boards Association, 2004.)
The DC School Choice Incentive Program — enacted through federal legislation
(described below) — is the first major school choice program to be implemented since the
Supreme Court ruled in favor of the constitutionality of the Cleveland Scholarship and
Tutoring Program in Zelman v. Simmons-Harris (536 U.S. 639 [2002]). Legislatures in a
number of other states also have recently considered school choice legislation. Existing
school choice programs continue to be challenged in the courts, with some of these
challenges involving state constitutional prohibitions against the provision of state aid to
support religious activities, such as education. In 2004, the U.S. Supreme Court decided two
cases related to school choice (Locke v. Davey and Hibbs v. Winn). These decisions and
those expected in cases currently before state and federal courts likely will affect the drafting
of future school choice programs. (For a more detailed review of legal issues relating to
school choice, particularly vouchers, see CRS Report RL30165, Education Vouchers:
Constitutional Issues and Cases, by Angie A. Welborn.)
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Current Federal Choice Programs
Currently, elementary and secondary education school choice is supported through
several ESEA programs and through the federal tax code. The following provides a brief
description of current federal school choice programs. Where appropriate, program
descriptions include FY2006 appropriations.
ESEA Programs
Local Educational Agency Plans (ESEA Title I-A). Schools with 25% low-
income enrollment may be granted a waiver allowing participation in Title I-A in instances
where they would not otherwise be eligible, if they are involved in desegregation programs
under which students change schools (the threshold otherwise is generally 35% or higher).
This provision was added to Title I-A in 1994.
School Choice as a Component of School Improvement (ESEA Title I-A).
Students attending Title I-A schools identified for school improvement after failing to meet
AYP standards for two consecutive years must be offered the opportunity to choose from
among two or more schools within the same LEA that have not been identified for school
improvement, corrective action, or restructuring, and that also have not been identified as
persistently dangerous schools. The lowest achieving children from low-income families
must receive priority in choosing schools. The U.S. Department of Education (ED) has
issued regulations prohibiting LEAs from using lack of capacity as a reason for denying
students the opportunity to transfer to a school of choice (34 C.F.R. § 200.44(d)). Schools
identified for improvement also are required to implement school improvement plans.
Students attending Title I-A schools that are identified for a second year of school
improvement after failing to meet AYP standards for a third consecutive year must continue
to be offered the option of attending another eligible public school within the same LEA.
Students from poor families who continue to attend a Title I-A school identified for a second
year of school improvement must be offered supplemental educational services (i.e., tutoring)
from a non-profit entity, a for-profit entity, or the LEA, unless such services are determined
by the state education agency (SEA) to be unavailable in the local area. The SEA is required
to maintain a list of approved supplementary education service providers (including those
offering services through distance learning) from which parents can select. In instances
where a school fails to meet AYP standards for four consecutive years, it must be identified
for corrective action. If, after a year of corrective action, the school still does not improve,
the LEA may begin planning to restructure the school, with one option being to reopen the
school as a charter school. In instances where there are no eligible schools in the student’s
LEA, LEAs are encouraged to enter into cooperative agreements with surrounding LEAs to
enable students to transfer to an eligible public school. LEAs may be required to expend an
amount equal to 20% of their Title I-A grants on transportation for public school choice and
supplemental educational services.
In instances where a Title I-A LEA fails to make AYP for two consecutive years, the
SEA is required to identify it for improvement, and require the LEA to develop and
implement a new LEA education plan, with technical assistance provided by the state. If an
LEA is identified for improvement, the SEA has the option of authorizing students attending
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a school in that LEA to transfer to an eligible public school in another LEA, with
transportation costs provided by the sending LEA. If a Title I-A LEA does not meet AYP
for four consecutive years, the SEA is required to take corrective action, which may consist
of requiring the LEA to provide students the option of attending an eligible school in another
LEA.
Innovative Programs (ESEA Title V-A). As means of achieving education reform,
states may use Innovative Programs funds for the planning, design, and implementation of
charter schools. LEAs may use Innovative Programs funds for magnet schools; for the
planning, design, and implementation of charter schools; for school improvement activities;
to promote, implement, or expand public school choice; and for supplemental educational
services. (FY2006 appropriation: $99.0 million.)
Public Charter Schools (ESEA Title V-B-1&2). The Charter Schools Programs
support increasing the number of charter schools by providing financial assistance for their
planning, design, and implementation. Forty states, the District of Columbia, and Puerto
Rico have charter school laws providing for the authorization of charter schools. In
exchange for exemption from significant state and/or local rules, charter schools are expected
to be held accountable for achievement of agreed-upon objectives. The Charter Schools
Programs require that all students in a community served by a charter school be given an
equal opportunity to attend.
Under Title V-B-1, the first $200 million appropriated for the Charter Schools Programs
is reserved for grants to states and eligible applicants for the planning, design, and
implementation of public charter schools and for the dissemination of information about
charter schools; for state revolving loan funds; and for national activities. The next $100
million appropriated for Title V-B-1 is reserved for per-pupil facilities aid programs, in
which competitive grants are awarded to states for purposes of establishing and
administering programs dedicated to funding charter school facilities, in whole or in part, on
a per-pupil basis. Fifty percent of funds appropriated in excess of $300 million are reserved
for each of the two uses. (FY2006 appropriation: $214.8 million.)
Under Title V-B-2, funding may be provided for grants to public or private entities (or
a combination of the two) for the development of credit enhancement initiatives to assist
charter schools in acquiring, constructing, or renovating facilities. (FY2006 appropriation:
$36.6 million.) For additional information on funding for charter school facilities, see CRS
Report RL31128, Funding for Public Charter School Facilities: Federal Policy Under the
ESEA, by David P. Smole.
Voluntary Public School Choice Programs (ESEA Title V-B-3). These
programs support school choice by providing competitive grants for transportation services
in support of public school choice. They also allow funds to be used for tuition transfer
payments, school enhancement in schools receiving transfer students, and public education
campaigns. (FY2006 appropriation: $26.3 million.)
Magnet Schools Assistance (ESEA Title V-C). Magnet schools are schools with
special programmatic and other features, and are designed to encourage voluntary
desegregation through the mechanism of parental choice. The Magnet Schools Assistance
program supports school choice by offering students the opportunity to attend a public school
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with a special curriculum that attracts substantial numbers of students from differing racial
backgrounds. (FY2006 appropriation: $106.7 million.)
Fund for the Improvement of Education (ESEA Title V-D-1). The Fund for the
Improvement of Education (FIE) provides the Secretary authority to support nationally
significant programs aimed at improving the quality of elementary and secondary education
at the state and local levels. Programs may be carried out directly by the Secretary, or
through grants or contracts. Specifically authorized uses of FIE funds include, among others,
the exploration of state and local public school choice programs. (FY2006 appropriation:
$11.7 million.)
School Choice Offered to Pupils Attending Unsafe Schools. Each state
receiving ESEA funding is required to allow pupils who attend chronically unsafe schools
and those who are victimized on the grounds of an elementary or secondary school to transfer
to a safe public school within the LEA.
Services to Students Attending Private Schools. Funds provided under several
ESEA programs are required to be used to provide applicable educational services, on an
equitable basis, to eligible students enrolled in private schools. Services typically are
provided to private school students either by the LEA or a private contractor according to
terms agreed to after consultation with private school officials. This method of providing
services to private school students is sometimes referred to as the “child benefit” model
because private school students are able to benefit from publicly-funded services, yet the
funding for and provision of these services remain under public control. Private school
students are eligible to be served under the following ESEA programs: Title I-A (Education
for the Disadvantaged), Title I-B-1 (Reading First), Title I-B-3 (Even Start Family Literacy),
Title I-A (Migrant Education), Title II-A (Teacher and Principal Training and Recruiting
Fund), Title I-B (Mathematics and Science Partnerships), Title II-D (Enhancing Education
Though Technology), Title III-A (English Language Acquisition, Language Enhancement
and Academic Achievement), Title IV-A (Safe and Drug-Free Schools and Communities),
Title IV-B (21st Century Community Learning Centers), Title V-A (Innovative Programs),
and Title V-D-6 (Gifted and Talented Students).
In contrast to the programs cited above, private schools may be eligible to apply to
receive funds directly under a small number of discretionary federal grant programs. Finally,
students parentally placed in private schools also are eligible to be served under the
Individuals with Disabilities Education Act (IDEA).
Coverdell Education Savings Accounts. Distributions from Coverdell ESAs
may be used for elementary and secondary education expenses at public, private, or
religiously affiliated elementary or secondary schools. Annual contributions to Coverdell
ESAs are limited to $2,000. For further information on this tax benefit, see CRS Report
RS21870, Education Tax Benefits: Are They Permanent or Temporary?, by Linda Levine.
DC School Choice Incentive Act. This is a federal demonstration program under
which ED funds the operation of a tuition scholarship program in the District of Columbia.
Students who are residents of the District of Columbia and whose family income does not
exceed 185% of the poverty line are eligible to receive scholarships valued at up to $7,500
per year to support their attendance at private elementary or secondary schools located in the
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District of Columbia. Priority in the awarding of scholarships goes to students attending
schools identified for school improvement, corrective action, or restructuring under ESEA
Title I-A. The program is authorized through FY2008. (FY2006 appropriation: $14.9
million, of which $1.0 million may be used for the funding and administration of
assessments.) (For a more detailed discussion of the DC School Choice Incentive Act of
2003, see CRS Report RL32019, Proposals to Establish a K-12 Scholarship or Voucher
Program in the District of Columbia: Policy Issues and Analysis, by David P. Smole.)
Temporary Emergency Impact Aid for Displaced Students. This is a
temporary emergency aid program in which funding is made available to schools on a per-
student basis, irrespective of whether parents have chosen to enroll their children in public
or non-public schools. It is limited to schools serving students displaced by Hurricanes
Katrina and Rita. Under the program, the Secretary of Education makes grants to SEAs,
which in turn award funds to LEAs and Bureau of Indian Affairs (BIA)-funded schools on
a per-student basis. LEAs and eligible BIA-funded schools may use these funds for the
purpose of providing services and assistance to elementary and secondary schools enrolling
displaced students during the 2005-2006 school year. LEAs serving areas in which displaced
students enrolled in non-public schools prior to December 20, 2005 must deposit a
proportionate amount of funds into student accounts on behalf of such students. Nonpublic
schools, in turn, may access funds from student accounts to serve eligible students. Up to
$6,000 may be made available per displaced student (and up to $7,500 per displaced student
served under IDEA, Part B). The amount to be deposited into student accounts also may not
exceed the cost of tuition and fees at the non-public school a student attends. Nonpublic
schools must waive or reimburse tuition in order to access funds from student accounts. For
FY2006, $645 million has been appropriated. The program sunsets August 1, 2006.
Major Types of Proposals to Expand
Federal School Choice Support
The range of school choice proposals that the U.S. Congress might consider is broad
and can be clustered into at least four basic groups: choice options in existing programs,
demonstration or targeted choice programs, block grants, and tax subsidies. These are not
mutually exclusive. Each of these is briefly reviewed below.
Choice Options in Existing Programs. Advocates of school choice may seek to
amend existing federal education programs in various ways, such as removing possible
program barriers to choice, adding school choice to authorized uses of funds, expanding
current choice provisions, or reconstituting programs to focus them on choice. They also
may consider appropriations language directing how program funds may be spent. The
primary examples of proposals in this category have involved ESEA Title I-A. As previously
noted, Title I-A contains certain choice-related provisions authorizing or requiring public
school choice and the provision of supplemental educational services for students attending
poorly performing Title I-A schools. Previously attempted choice amendments to Title I-A
also have endeavored to include private school enrollment among choice options.
Additionally, over time the ESEA has been amended to be supportive of public school choice
through the addition of the Innovative Programs, Public Charter Schools, Voluntary Public
School Choice, and Magnet Schools programs. Proposals also may be made to amend the
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terms and conditions of the DC School Choice Incentive Act, such as to allow scholarship
recipients to attend private schools located in Maryland or Virginia, in addition to the District
of Columbia.
Demonstration or Targeted Choice Programs. Federal support for school
choice might be designed to demonstrate the impact of school choice in a discrete number
of locations (e.g., specific cities or a limited number of places around the country, such as
low-performing LEAs, empowerment zones, or areas impacted by a natural disaster) or to
target choice in a similarly limited fashion to particular kinds of students or schools. The
most frequent examples of this kind of proposal have sought to expand choice options for
special groups of students (e.g., low-income students, victims of violence on school grounds)
or those in certain types of schools (e.g., schools characterized by poor levels of academic
performance). The DC School Choice Incentive Act is an example of a demonstration
program targeted to children from low-income families in a discrete location.
Block Grants. Block grants are federal grants to states that provide an exceptionally
high degree of flexibility in the ways in which aid may be used, perhaps coupled with more
specific requirements for accountability in terms of outcomes. They are frequently proposed
as the outcome for a consolidation of several existing federal education programs. Groups
of existing programs might be transformed into block grants in selected states under
“performance agreement” proposals. Under a block grant, school choice might be an
explicitly authorized use, a required use (perhaps of some specified portion of funding), or
a precondition for participation (i.e., federal funds are available only to those implementing
choice plans). At times, choice programs have been explicitly included among the
authorized uses of funds under these block grant proposals or the authorities are sufficiently
open for choice to be supported without explicit mention.
Tax Subsidies. Advocates of federal support for school choice often turn to the
Internal Revenue Code (IRC) in order to provide tax benefits — deductions, credits
(refundable or non-refundable), or exemptions from taxation of certain income — for all or
certain categories of families paying tuition or related costs for K-12 education. Coverdell
ESAs are a current example of a tax subsidy supportive of elementary and secondary
education school choice (these accounts also support postsecondary education expenses).
Proposals also have been made to provide tax subsidies for contributions to STOs, which in
turn would award private scholarships to enable children to attend schools of choice. Some
see tax subsidies, especially tax credits, as an option to school vouchers. (For further
information on proposals to support school choice through the federal tax code, see CRS
Report RL31439, Federal Tax Benefits for Families’ K-12 Education Expenses in the
Context of School Choice, by Linda Levine and David Smole.)
Why Is There Debate over Federal Support
of Expanded School Choice?
This section considers some of the issues that have framed the debate over school
choice. Over the past several Congresses, many school choice proposals have been
introduced and debated, often vigorously. Most have failed to be enacted. The most
controversial issues regarding publicly funded school choice have been the provision of
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support (direct or indirect) to enable students to attend private, often religiously affiliated,
schools. Coverdell ESAs and the DC School Choice Incentive Act Program are examples
of federal programs that currently support the enrollment of students in private elementary
and secondary schools. Concerns about such programs have included whether public funds
should be used to provide support to private (especially religiously affiliated) schools and
whether the existence of public funding for private school options effectively improves
educational outcomes. School choice programs in which funding remains under public
control have tended to be less controversial. Examples include public charter schools, the
implementation of the school choice provisions under ESEA Title I-A, and the “child
benefit” provisions of many ESEA programs.
Those who support school choice proposals that include private schools have argued
that in view of the apparent institutional rigidity and resistance to change in many public
school systems, the most effective way in which the federal government can help to improve
educational performance, especially for pupils in low-income families, is to increase such
pupils’ opportunities to select from a range of schools, including private and religiously
affiliated schools. Proponents frequently state that helping at least some pupils from low-
income families “escape” their current, often poor-performing public schools provides an
immediate benefit to those pupils, and helps to provide such pupils with a degree of
educational choice and opportunity that those from more affluent families already have.
Competition through choice, it is argued, also would stimulate major improvements in the
performance of many public school systems serving large numbers of poor children. Finally,
while recognizing the possibility that new forms of government regulation may accompany
public funding, some proponents of school choice programs argue that this threat can be
limited through statutory prohibitions, especially if the aid is provided indirectly (i.e.,
through pupils’ families). Supporters have likely been encouraged by the U.S. Supreme
Court’s ruling in Zelman v. Simmons-Harris.
Opponents of federal school choice proposals that include private schools tend to focus
on the limitations of the choice options being proposed, and the potentially negative effects
on public schools and their pupils, including diversion of attention and resources away from
the goal of public school system reform. Many of the current choice proposals generally
involve only a portion of the potentially eligible pupil population; for example, they would
be available only in one or a few localities, or only for a selected number of pupils in low-
income families nationwide. In addition, they often are limited in the proportion of private
school tuition and fee costs that may be covered, and/or the maximum voucher or scholarship
per pupil. While these amounts may cover a substantial share of the costs of attending some
private — especially elementary — schools, they are typically sufficient to pay the full costs
of attending only the least expensive types of private schools. Further, some opponents argue
that substantial governmental regulation of private schools will inevitably accompany federal
school choice programs, even if federal financial assistance is provided indirectly. Finally,
some opponents argue that the effects of competition on public school systems are more
likely to be negative than constructive, including a reduction in funds that are linked to
enrollment levels, abandonment of public schools by pupils whose families are most alert to
the choices available to them, and unequal constraints on public schools (e.g., the public
schools must continue to serve numerous and diverse hard-to-educate pupils who might be
rejected by private schools).
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LEGISLATION
Proposals in the 109th Congress
Several proposals have been introduced in 109th Congress that would affect federal
support of school choice at the elementary and secondary education levels. Bills include
those that would amend the IRC of 1986 to support school choice through the creation of
new tax credits or the expansion of existing credits, those that would amend existing school
choice provisions under the ESEA, and those that would support the education of students
displaced by Hurricanes Katrina and Rita who are enrolled in private as well as public
schools. This section will be updated regularly as legislation is introduced and considered.

Selected House and Senate Bills. A selection of bills introduced during the 109th
Congress is described below.
H.R. 224 (Strickland)
Comprehensive Learning Assessment for Students and Schools (CLASS) Act. Among
other provisions, would amend the requirement under ESEA Title I-A that LEAs provide
students attending schools identified for school improvement, corrective action, or
restructuring with public school choice and supplemental educational services. LEAs would
only be required to provide school choice and supplemental educational services to students
who are members of student subgroups identified as not making AYP (as opposed to all
students attending the school as is currently required). Introduced 2/9/2005; referred to the
Subcommittee on Education Reform.
H.R. 403 (Paul)
Hope Plus Scholarship Act of 2005. Would amend the IRC by allowing the Hope
Scholarship Credit (an existing higher education tax credit), to be claimed for qualified
elementary and secondary education expenses (defined the same as for Coverdell ESAs).
The bill would not amend the student eligibility requirements applicable to the Hope
Scholarship program. Introduced 1/26/2005; referred to the House Committee on Ways and
Means.
H.R. 404 (Paul)
Education Improvement Tax Cut Act. Would amend the IRC by authorizing a tax credit
of up to $3,000 ($1,500 for married couples filing separately) for contributions to charitable
organizations that provide elementary or secondary school scholarships. Introduced
1/26/2005; referred to the House Committee on Ways and Means.
H.R. 406 (Paul)
Family Education Freedom Act of 2005. Would amend the IRC by authorizing a tax
credit of up to $3,000 annually per dependent student for qualified educational expenses
associated with the costs of attendance at a qualified elementary or secondary school.
Qualified expenses would include costs associated with attendance at public, private,
parochial, religious, or home schools. Introduced 1/26/2005; referred to the House
Committee on Ways and Means.
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H.R. 441 (Smith, C.)
Education, Achievement, and Opportunity Act. Would amend the IRC by authorizing
a tax credit of up to $2,500 annually per qualifying child for qualified elementary school
educational expenses, and up to $3,500 annually per qualifying child for qualified secondary
school educational expenses. The credit would begin to be phased out for families with
adjusted gross incomes (AGIs) above $150,000. Introduced 2/1/2005; referred to the House
Committee on Ways and Means.
H.R. 1506 (DeLauro)
No Child Left Behind Reform Act. Among other provisions, would amend the
requirements of ESEA Title I-A to require that as part of school improvement, corrective
action, or restructuring, public school choice transfers and supplemental educational services
need only be made available to students who are members of a student subgroup that has
failed to make adequate yearly progress. Introduced 4/29/2005; referred to the Subcommittee
on Education Reform.
H.R. 1681 (Butterfield)
Quality Education for All Act. Among other provisions, would amend the public school
choice provisions of ESEA Title I-A by making the obligation of LEAs to provide students
the option to transfer to another public school subject to applicable state and local health and
safety code requirements regarding facility capacity; by authorizing grants for school
construction and renovation, with priority for LEAs experiencing difficulties meeting the
ESEA Title I-A public school choice requirements due to capacity constraints; and by
creating new requirements applicable to providers of supplemental educational services.
Introduced 5/9/2005; referred to the Subcommittee on Education Reform.
H.R. 2426 (Green)
SCHOOL Act of 2005. Would amend the IRC by authorizing a tax credit for
individuals of up to $3,000 ($6,000 in the case of a joint return), and for corporations of up
to the lesser of 5% of tax liability or $20,000 for contributions to qualified charitable
organizations that provide elementary or secondary school scholarships. Students from
families with incomes not exceeding 2.5 times the income threshold for eligibility to receive
free or reduced priced lunches (462.5% of the poverty level) would be eligible to receive
scholarships. The Secretary of Education would be required to certify scholarship granting
organizations. Introduced 6/22/2005; referred to the Subcommittee on Education Reform.
H.R. 3753 (Musgrave)
Home School Non-Discrimination Act of 2005. Would clarify the requirements of
several federal education programs, including Coverdell ESAs, regarding the treatment of
home schools and students who have been homeschooled. Introduced 10/12/2005; referred
to the Subcommittee on Education Reform.
H.R. 3958 (Melancon)
Louisiana Katrina Restoration Act. (Same as S. 1765 — see below.) Introduced
9/29/2005; referred to the House Committee on Education and the Workforce.
H.R. 4017 (Johnson, S.)
Hurricane Education Assistance Act. Among other things, would authorize funding for
school vouchers to support the enrollment of displaced students in private elementary and
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secondary schools during the 2005-2006 academic year. Vouchers would be limited to the
lesser of $7,500, 90% of a state’s per-pupil expenditures for K-12 education, or the actual
costs of tuition and fees at the private school. Introduced 11/7/2005; referred to the
Subcommittee on Education Reform.
H.R. 4097 (Boehner)
Family Education Reimbursement Act of 2005. Would establish student accounts into
which federal funds would be deposited for the purpose of reimbursing public and private
schools for the actual costs of educating children displaced by Hurricanes Katrina and Rita
during the 2005-2006 academic year. Funds would be made available for the actual costs of
educating students enrolled in public or private schools, and would be portable so that funds
could follow students who change schools. An amount of up to the lesser of $6,700 —
$8,200 for students served under Part B of IDEA — or the actual cost to the school for
educating the displaced student would be made available for each student. Introduced
10/20/2005; referred to the House Committee on Education and the Workforce. (On
10/27/2005, the House Committee on Education and the Workforce voted 26-21 not to agree
to language similar to H.R. 4097 with regard to the Committee’s instructions pursuant to
H.Con.Res. 95.)
H.R. 4400 (Franks)
Children’s Hope Act of 2005. Would amend the IRC to provide a federal tax credit of
up to $100 ($200 in the case of a joint return) for contributions to education investment
organizations that award grants or scholarships to students for qualified elementary and
secondary education expenses. The federal credit could only be claimed by filers in states
that have enacted a state tax credit for contributions to education investment organizations.
The state tax credit must be for an amount of at least $250, and the federal credit may only
be claimed for contributions in excess of the amount claimed under the state credit.
(Introduced 11/18/2005; referred to Committee on Ways and Means.)
S. 15 (Bingaman)
Quality Education for All Act. Among other provisions, would amend the public school
choice provisions of ESEA Title I-A by making the obligation of LEAs to provide students
the option to transfer to another public school subject to applicable State and local health and
safety code requirements regarding facility capacity; by authorizing grants for school
construction and renovation, with priority for LEAs experiencing difficulties meeting the
ESEA Title I-A public school choice requirements due to capacity constraints; and by
creating new requirements applicable to providers of supplemental educational services.
Introduced 1/24/2005; read twice and referred to the Committee on Finance.
S. 75 (Cantwell)
The Educational Savings for Students Act of 2005. Would amend the IRC by
increasing the limit on contributions to Coverdell ESAs from $2,000 to $5,000 per year.
Introduced 1/24/2005; read twice and referred to the Committee on Finance.
S. 696 (Burns)
Rural Schools Geography Act. Would amend the ESEA Title I-A provisions for school
improvement, corrective action, and restructuring, such that LEAs would not be required to
offer public school choice to students in instances where it would be “impractical due to the
distance to be traveled, a geographical barrier or hazard, the duration of the travel, or an
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unusually high cost of travel.” Introduced 4/5/2005; read twice and referred to the
Committee on Health, Education, Labor, and Pensions.
S. 724 (Dodd)
No Child Left Behind Reform Act. Among other provisions, would amend the
requirements of ESEA Title I-A to require that as part of school improvement, corrective
action, or restructuring, public school choice transfers and supplemental educational services
need only be made available to students who are members of a student subgroup that has
failed to make adequate yearly progress. Introduced 4/6/2005; read twice and referred to the
Committee on Health, Education, Labor, and Pensions.
S. 848 (Bingaman)
Educational Reform Act of 2005. Among other provisions, would amend the public
school choice provisions of ESEA Title I-A by making the obligation of LEAs to provide
students the option to transfer to another public school subject to applicable State and local
health and safety code requirements regarding facility capacity; by authorizing grants for
school construction and renovation, with priority for LEAs experiencing difficulties meeting
the ESEA Title I-A public school choice requirements due to capacity constraints; and by
creating new requirements applicable to providers of supplemental educational services.
Introduced 4/19/2005; read the second time; placed on the Senate Legislative Calendar under
General Orders, Calendar No. 82.
S. 1691 (Craig)
Home School Non-Discrimination Act of 2005. Would clarify the requirements of
several federal education programs, including Coverdell ESAs, regarding the treatment of
home schools and students who have been homeschooled. Introduced 9/13/2005; read twice
and referred to the Committee on Finance.
S. 1765 (Landrieu)
Louisiana Katrina Reconstruction Act. Among other provisions, would authorize grants
in the amount of $4,000 per displaced pupil to be made available to LEAs, and to private and
parochial elementary and secondary schools for educational expenses related to receiving
students displaced by Hurricane Katrina. Would authorize direct grants to LEAs, and to
private and parochial elementary and secondary schools for use in restarting schools that
serve areas declared a disaster in accordance with § 401 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act related to Hurricane Katrina. Would authorize grants
to the Louisiana Department of Education for the awarding of subgrants to LEAs, early
childhood education programs, and private and parochial schools for the repair, renovation,
alteration, or construction of school facilities. Introduced 9/22/2005; read twice and referred
to the Committee on Finance.
S. 1766 (Vitter)
Louisiana Katrina Reconstruction Act. (Same as S. 1765.) Introduced 9/22/2005; read
twice and referred to the Committee on Finance.
S. 1842 (Landrieu)
Among other things, would authorize funding for school vouchers to support the
enrollment of displaced students in private elementary and secondary schools during the
2005-2006 academic year. Vouchers would be limited to the lesser of $7,500, 90% of a
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state’s per-pupil expenditures for K-12 education, or the actual costs of tuition and fees at
the private school. Introduced 10/6/2005; read twice and referred to the Committee on
Health, Education, Labor, and Pensions.
S. 1904 (Alexander)
Hurricane Katrina Elementary and Secondary Education Recovery Act. Would
authorize the Secretary of Education to make emergency impact aid payments to state
educational agencies (SEAs) for the 2005-2006 academic year. SEAs, in turn, would provide
funds to local educational agencies (LEAs) and eligible Bureau of Indian Affairs (BIA)-
funded schools for the instruction of students displaced by Hurricane Katrina who are
enrolled in public schools, and for payment into accounts established on behalf of students
enrolled in non-public schools for whom the school has previously waived or reimbursed the
student’s tuition and fees. An amount of up to $6,000 would be made available per displaced
student (up to $7,500 for students served under IDEA, Part B), except that no more than the
cost of tuition and fees charged at a student’s non-public school could be paid into a student
account. Payments would be made to LEAs and, as applicable, from LEAs to student
accounts on a quarterly basis. Funding would be made available for the provision of
instructional opportunities for displaced students; however, non-public schools would be
specifically prohibited from using funds for religious instruction, proselytization, or worship.
Introduced 10/20/2005; placed on the Senate Legislative Calendar under General Orders,
Calendar No. 253. (Language similar to S. 1904 was incorporated into H.R. 2863 and
enacted as P.L. 109-148.)
President’s FY2007 Budget Request. In his FY2007 budget request, the
President requests continued funding for the following ESEA Title V programs: Innovative
Programs, Public Charter Schools Programs (Charter Schools, State Charter School Facilities
Incentive Grants, and Credit Enhancement Initiatives for Charter School Facilities),
Voluntary Public School Choice, Magnet Schools, and Fund for the Improvement of
Education. The President also proposes continued funding for the DC School Choice
Incentive Act. In addition, the President requests funding to support school choice under
ESEA Title I-E for a new America’s Opportunity Scholarships for Kids Program.
America’s Opportunity Scholarships for Kids Program. Under the proposed
program, competitive grants would be available to states, LEAs, and non-profit organizations
(including community and faith-based organizations) to establish programs under which
scholarships would be awarded to low-income students assigned to schools identified for
restructuring under ESEA Title I-A to enable them to either attend a private school of their
choice or receive supplemental educational services. Scholarships would be valued at up to
$4,000 for school choice, and up to $3,000 for supplemental educational services. The
President requests $100 million for the program.
FOR ADDITIONAL READING
CRS Report RL30165, Educational Vouchers: Constitutional Issues and Cases, by Angie
A. Welborn.
CRS Report RL31439, Federal Tax Benefits for Families K-12 Education Expenses in the
Context of School Choice, by Linda Levine and David Smole.
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