This story is one in a series exploring the basics of key issues in education in Indiana. See all of the stories in the series.
Indiana has the nation’s most expansive, fastest-growing, and soon-to-be-largest private school voucher program in the nation, and it’s only four years old.
The speed of the growth has helped private schools, notably some Catholic schools that had been threatened by enrollment declines, and redirected millions from traditional public schools, drawing complaints from public education advocates.
If the program continues to grow, debates about direct public support for religious schools and program costs could intensify.
More kids eligible
From the start, Indiana’s program made more kids eligible than other large, general enrollment voucher programs, notably those in Wisconsin and Ohio. Most voucher programs are aimed at specific groups of students, such as disabled students, or are confined to a single city. It’s also common for voucher programs to be limited only to very low income students.
But the 2011 law that created Indiana’s voucher program allowed qualifying students anywhere in the state to access tax dollars that had been set aside for their public school educations and use the money to pay private school children. Voucher in Indiana are not restricted to just students in cities or schools with poor academic performance. And the original income limits of the program allowed middle income families who earn up to $62,000 for a family of four to to access vouchers at 50 percent of the amount that poorer families could receive. (Families of four with incomes of $42,000 or less can qualify to spend up to 90 percent of the state aid set aside their public school education on private school tuition.) New laws have since allowed children of parents who initially qualified only to see their incomes grow to keep their vouchers.
The political fight
The battle over vouchers is one of the most polarizing disagreements in education. The theory behind them — that students can use them to find schools that better fit their education needs and market forces from competition will force schools to improve to attract or retain students — is mostly identified with conservatives. While some notable Democrats support the idea, others who generally favor expanding school choice in other ways — including President Obama and U.S. Secretary of Education Arne Duncan — draw the line at backing vouchers.
Vouchers were one of the top goals in the legislative agenda of then-Gov. Mitch Daniels’ second term, when he, then-state Superintendent Tony Bennett and their allies in the Republican-led statehouse pushed through a series of major education reforms that helped vault Indiana into the national debate over education reform. Other new laws that year expanded charter schools, limited teacher union bargaining and overhauled teacher evaluation.
Among the advocates for vouchers in Indiana is the Milton and Rose Friedman Foundation. Named for the famed free-market economist, the foundation is one of the strongest advocacy groups supporting vouchers nationally. The national effort to expand the idea has helped the idea catch on in states like Ohio and Louisiana. But voucher proposals have also been defeated in other states, notably Utah and Washington.
The first year of the program, 3,919 Indiana students used vouchers, the biggest first year enrollment for a voucher program in U.S. history. That number almost tripled in the second year. In 2013 voucher enrollment more than doubled, helping 19,809 Indiana students to attend private schools. Some voucher-accepting schools came to depend on the state aid that came with them to support their programs. In 2015, the program grew to more than 29,100 participants, just behind Wisconsin, the nation’s largest program.
That’s still a small percentage — roughly 2.6 percent of Indiana schoolchildren — but voucher programs usually start much smaller. Ohio, which has the nation’s only other statewide program and had 2,713 students when it launched in 2006. Seven years later, it now has about 17,000 students enrolled. Wisconsin, which launched the nation’s first major voucher program in Milwaukee in 1990, began with just 337 students its first year before expanding to other cities and growing to almost 30,000 this year.
Then in 2013, the Indiana legislature expanded the voucher program allowing siblings of those already using vouchers to also enroll in the program. The bill also allowed children living in the attendance boundaries of a D or F rated school to obtain vouchers.
Failed court challenge
In 2013, a court challenge led by the Indiana State Teachers Association charging the program was unconstitutional was turned away by the Indiana Supreme Court. The plaintiffs argued the program violated the state’s requirement for a uniform public school system and improperly spent public dollars on religious institutions.
The union also argued vouchers drain money that public schools need to maintain high quality programs.
An influx of voucher students has helped stabilize enrollment and finances for several inner city Catholic schools in Indianapolis that were threatened by falling enrollment. Voucher advocates at the Indianapolis-based Friedman Foundation say they expect demand to continue to rise, which they believe could even prompt private school expansion in the next few years.
Currently there are no limits on the number of qualifying students who can seek vouchers. After three years of expansion, both of the program rules and participation, the question is whether the Republican-controlled legislature will change the rules again in 2014, leave the program as it is or consider pulling back, as some Democrats have urged.
State says costs rise for vouchers
Vouchers redirect to private schools a dollar amount less than the full per pupil state aid for each student that uses them. So a small amount is returned to state coffers and shared among all public schools after all the program’s expenses are paid. In 2012-13, $4.9 million that was saved was redistributed statewide. That’s up from about $4.2 million the prior year.
In calculating the cost to the state for 2013-14, state officials had to estimate how many of the program’s new participants would have gone to private school anyway. An Indiana Department of Education analysis of the state’s school voucher program estimated it cost the state $16 million that year.
After more changes to voucher eligibility, the Indiana Department of Education argued they cost considerably more in 2014-15: about $40 million. Voucher advocates disputed that figure, arguing that the department failed to estimate how many voucher users likely would have attended private school without state aid, inflating the cost.
Voucher opponents argue that recent rule changes allow many children, such the siblings of those already in the program, to use public dollars for private school even if they intended to enroll in private school all along. In that case, they actually cost the state money by using state aid they otherwise would have foregone without the voucher program. The state only saves money when a student who would have gone to public school instead goes to private school because of the opportunity to use a voucher.
But voucher supporters said the state essentially assumed a wide swath of private school students would never have attended public school, therefore creating all new costs for Indiana to pay for their education. That’s unrealistic, they argued.
In 2015, voucher advocates succeeded in persuading the legislature to remove a limit of $4,800 for vouchers that go to elementary schools. The amount of the voucher now depends only on how much state aid is set aside for each student’s education in their home school districts.
-Updated December 2015