Policy Analysis No. 495

The Struggle for School Choice Policy after Zelman: Regulation vs. the Free Market

By H. Lillian Omand
October 29, 2003

Executive Summary

Supporters of a free market in education have immense constitutional discretion in crafting school choice programs in the wake of the Supreme Court’s landmark 2002 decision in Zelman v. Simmons-Harris. It is now time to focus carefully on the details of school choice programs, to discern what specific legislative provisions and regulations advance or impede the development of a free market.

Regulation of private schools is a growing concern among proponents of school choice. This paper uses a national survey of private schools as a basis for analyzing the potential effects of various regulations. More than a thousand schools responded to questions about their willingness to participate in a school choice program if they had to comply with particular regulations. The survey reveals that the directors of many private schools would rather turn down “free money” than compromise the core qualities of their schools; it also reveals that different kinds of schools often do not agree on what those core qualities are.

The paper also examines some economic flaws in school choice programs and explains why limiting student eligibility narrows the market and stunts improvement and why school choice policies must be carefully crafted to take into account the dominance and funding structure of Catholic schools.

Finally, the paper provides a series of dos and don’ts for school choice policymakers, organized under four principles. First, create broad-based demand. Second, create a wide-open playing field on which schools may differentiate themselves and compete, and eliminate entry barriers to new schools. Third, avoid skewing prices with tuition caps or non-need-based subsidization. Finally, avoid conflicts of interest between the people paying for education and the parents and children benefiting from education by creating a system that maximizes direct payment by parents and minimizes coercive wealth transfers through the state.

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H. Lillian Omand is a student at the University of Virginia School of Law. She was formerly associate program director of the Children’s Scholarship Fund and program director of the Washington Scholarship Fund.