Monday, May 10, 1999 in Business Week
By Richard A. Melcher in Chicago and Aaron Bernstein in Washington
A new scholarship fund heats up the debate over vouchers.
Quantina Samuels, a single mother of two honor students in Washington, D.C.,’s public schools, is proud of her offspring. But she wishes they could have the attention she knows private schools lavish on their pupils. “I want someone to treat my children with concern, to push them,” says Samuels, a medical secretary.
Until late April, the promise of private schools was no more than a dream. Now, Samuels can hardly believe her good fortune. Thanks to the largesse of financier Theodore J. Forstmann and investor John T. Walton, Samuels’ children will join some 40,000 other kids from low-income families to receive around $ 1,000 a year over the next four years for private or parochial schools. “I was speechless,” says Elizabeth Carver, a single mother of two in Chicago, whose scholarship application was selected in the national drawing. “I’m so excited — and my kids are, too.” VAST. No question, the Forstmann-led Children’s Scholarship Fund has excited parents, educators, and politicians across the country. Its sheer size — more than $ 160 million raised, with Forstmann and Walton kicking in $ 50 million each — dwarfs all other private scholarship programs. Then there’s the outpouring of applicants: 1.2 million families, with average incomes of just $ 22,000 a year, vied for the funding. The winners are now sifting through literature on private schools in their neighborhoods. Catholic schools will grab the bulk of the kids.
The program is far more than Education Lotto, however. Forstmann, who tapped a list of luminaries from Barbara Bush and Andrew Young to Senate Minority Leader Thomas A. Daschle (D.-S.D.), has struck a chord that cuts across party lines. Despite years of education reforms, including new standards for teacher and student accountability, the number of parents eager to bail out of the public schools shows that the efforts haven’t done nearly enough for poor students trapped in the country’s worst schools. “The public-school system is a monopoly that delivers bad products at high prices,” charges Forstmann. “We need to open it up and allow competition to create innovation.”
Talk like this has thrust Forstmann into the national debate over how best to shake up public education. He is careful not to endorse vouchers explicitly — the idea of allowing parents to spend public tax money on private schools. But advocates and critics view Forstmann’s scholarships as a spur to the voucher movement.
Forstmann may be wise to soft-pedal any link. Polls show the public is deeply divided on vouchers, and despite years of debate, only Cleveland and Milwaukee have adopted programs. California and other states have recently rejected vouchers. The political momentum also has slowed at the national level, where Republicans are leery of championing such a divisive issue as they try to soften their image.
Vouchers are also under legal challenge. Since most private schools have some religious affiliation, using public money to send students to them strains the doctrine of separation of church and state. Last year, Wisconsin’s Supreme Court upheld Milwaukee’s plan, and the U.S. Supreme Court declined to review the decision. But on Apr. 27, Maine’s Supreme Court rejected a suit by parents who sought to overturn the state’s policy of restricting vouchers to nonreligious schools. (Both Maine and Vermont have decades-old voucher programs for farm children living far from public schools.)
Still, the voucher movement may be picking up steam. On Apr. 27, Florida Governor Jeb Bush and Republican legislative leaders agreed on a plan to let children in the worst-performing schools use state money to transfer to private ones. New York Mayor Rudy Giuliani is trying to ram through a small voucher experiment, which the chancellor of the city’s schools bitterly opposes. And New Mexico’s Republican governor, Gary Johnson, has threatened to veto the state budget unless it includes vouchers. “VARIANCE.” It’s not clear that breaking up the public-school monopoly is a solution for the country’s most troubled schools, however. In Milwaukee, surveys show parents and students are pleased with vouchers, which are being extended to allow 15,000 students to attend religious schools. But the evidence is inconclusive on whether the voucher students actually do better academically. In fact, a study by Princeton University economist Cecilia Rouse shows that low-income kids in public schools with smaller class size and more parental involvement outperform voucher pupils in reading and equal them in math.
Nationwide, private schools, which educate 10% of the country’s 53 million children, do show better test scores. But “there is as much variance in private-school quality as in public” ones, says Columbia Teachers College professor Pearl Rock Kane. And the data don’t show whether scores are better at schools costing less than $ 4,000 a year, where low-income students such as those on Forstmann’s program go.
Experts seem to agree on why private schools do better. They note that private schools attract better students and those with the most involved parents. And they can reject students with learning or social problems. As a result, private schools could lose their edge if vouchers flooded them with deprived kids. With vouchers, “private schools might become more like public ones,” says Jack Jennings, director of the Center on Education Policy in Washington.
But, as the response to Forstmann’s scholarship program shows, many low-income Americans want to see their schools fixed — even if that means using vouchers to prod faster change. “I’m not spending my energy trying to block vouchers,” says Paul Vallas, chief executive of the Chicago public-school system and a leading reformer. “We’re still going to need to fix public schools.”
How the Children’s Scholarship Fund Works
FUNDING With backing from financier Theodore Forstmann and investor John Walton, the Children’s Scholarship Fund raises $ 160 million for 40,000 families to spend on private-or parochial-school tuition.
PUBLICITY Applications distributed over the Net and through churches and stores. Income limit is $ 51,975 for a family of five. Word spreads through public service announcements and Forstmann’s appearance on Oprah.
SELECTION The CSF receives 1.2 million applications, representing 44% of eligible parents in Baltimore and 29% in New York. Lottery selects winners of four-year scholarships. Parents chip in $ 1,000 a year.
RESULTS Winners receive information packets identifying local schools that have places available. Counseling for families is available from 40 local organizations scattered around the country.