Study Shows Big Return on Investment in DC School Choice

Two education professors at the University of Arkansas have just published a cost-benefit study of Washington, D.C.'s program that allows impoverished children to attend private schools — and reached incredible conclusions about the value of the much-debated school choice program.

Writing in National Review, Patrick J. Wolf and Michael Q. McShane claim that for every dollar spent on the Opportunity Scholarship Program, society and the economy will gain $2.62. Their full study is published in MIT's Education Finance and Policy journal.

Signed into law by President Bush in 2003, the Opportunity Scholarship Program nearly closed when President Obama and Congress moved to defund it in 2009. But by 2011, the program was refunded and expanded as the Scholarships for Opportunity and Results Act, supported by Republican John Boehner and Independent Joe Lieberman.

The program allows D.C. students below the poverty line to apply for a lottery of scholarships. There are 60 private schools participating in the program, so a student who wins a slot can choose which of these schools to attend if he meets the admission requirements.

The purpose of Wolf and McShane's study was to measure the value of the federal program by examining the economic effect of greater graduation rates, which the scholarship program appears to increase. Students who attend these private schools graduate at a rate 12% higher than their public school peers. During the period they studied, 3,738 students won opportunity scholarships, so Wolf and McShane calculated that 421 of them would graduate as part of the 12% increase. Presuming that 421 students might not have graduated without scholarships, they figure the cost of non-graduation to society compared with the benefit of graduation.

In general, high school graduates have better lives by many measures. Wolf and McShane explain:

Students who graduate from high school live longer, healthier, and more productive lives than their peers who do not. They make significantly more money and as a consequence pay significantly more taxes, are less likely to commit crimes, and are less likely to become a burden on the public. In other words, high-school graduates on average contribute more to society and require less from it than do high-school dropouts.

Other government economic studies have estimated the lifetime value of a high school diploma at $350,000 in increased earning power. Additionally, each individual who is out earning this money is not in prison, which saves society another $87,000, they report.

Multiplying the number of additional graduates by the value of a high-school diploma yields a total benefit of over $183 million. Over the time of our study, the OSP cost taxpayers $70 million, so dividing the benefits by the cost yields an overall benefit-to-cost ratio of 2.62, or $2.62 for every dollar that was spent.

Advocating for continuation and further expansion of the program, they also report that 1,584 students are currently attending private schools on scholarships. Of course, this time of year is also the time to apply. The D.C. Opportunity Scholarship program has a February 15 application deadline.

While some private schools may charge tuition that is higher than the scholarship amount, the program has increased the amount it allows for the next school year. For high school, up to about $12,205 will be allowed, and for K-8, they will pay as much as $8,136.

Participating schools include religious schools, such as Catholic parochial, Evangelical Protestant and Muslims school, as well as many secular program. Georgetown Prep, one of the most prestigious high schools in the city, participates in accepting scholarship students, as does Sidwell Friends, another exclusive college-prep school.

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