Allowing students greater ability to customize their learning at the course level would necessitate new fiscal arrangements. State policymakers could consider one of two approaches: one that would maximize student freedom and prove more transformative, and one that would accomplish most of the same objectives through more conventional state oversight.
The first approach would entail enacting Flex Learning Accounts, which parents would oversee to direct funds among eligible providers to advance their child’s education. A new statewide entity under the Department of Technology Management and Budget could operate strictly to administer the state-appropriated funds.[*]
The amount deposited in a student’s Flex Learning Account should correspond with the basic foundation allowance amount approved by the Legislature for that year, currently a little more than $8,000. Students eligible for federal lunch assistance due to low household income would receive an additional at-risk per-pupil amount recognized in statute: $945 in 2019-20.[†] These amounts should stay tied to the Legislature’s relevant appropriations for the foundation allowance and the per-pupil at-risk allocation, respectively. The Legislature should also work to incorporate a mechanism that redirects school aid dollars to extra support for participating students with disabilities.
From each Flex Learning Account, a small flat fee set as a percentage of minimum foundation allowance would stay with DTMB to offset costs for financial administration. An additional 3% of the allowance would automatically be directed to a student’s primary enrolling district, the share equivalent to a public charter school’s authorizer fee. This amount would be reserved to pay the district for the cost of maintaining student records and other accounting and counseling services. Using fiscal year 2020 rates, nearly $245 would automatically flow from a student’s account to the home district. Nearly $7,900 would remain to the family’s spending discretion. Low-income students would have nearly $8,800.[‡]
The second and less disruptive approach would be to fund customized course options and services through the foundation allowance received by a student’s home district. For participating economically disadvantaged students, districts could also draw from a per-pupil share of state at-risk funding.
Course prices would be set by providers, whether they be school districts, charter schools or institutions of higher education. Since these entities will be competing to register students, prices will reflect demand, scarcity, quality of instruction and other associated expenses. The only requirement for setting the price of courses, either by districts or other public providers, is that those prices would be transparent and not discriminate between students. Standard community college or trade school tuition rates would apply for students who choose one of those respective routes.
Course providers would receive 50% of the fee up front, whether directed by families from an account or paid for by the district of enrollment according to recognized legal terms. In either case, the initial payment would become non-refundable following a brief drop period. A successfully completed course would deliver the remainder of the course fee to the provider. This approach is used in both Utah’s Statewide Online Education Program and Louisiana’s Course Choice Program. Otherwise, the funds would revert to the primary enrolling district. This by itself would establish a higher level of accountability of effective use of taxpayers as school districts have always receive funding without any regard for student performance or course completion.
Students with multiple incompletions in a given school year should be restricted from participating in the Flex Learning program for the following year. On the other hand, a student who successfully graduates early, the remaining foundation allowance dollars that would have been paid out on a normal four-year high school schedule should be evenly divided between the enrolling district and a scholarship in the student’s name to pay for postsecondary education.[§]
Flex Learning should enable the opportunity to “purchase” not only individual courses, but also additional education-related expenses and services, from different providers. This could include reimbursements for transportation to a nonresident school or career program. It could also pay for internet devices or services needed to access virtual courses. By rededicating funds to solve transportation or internet service problems, this would allow more students – particularly rural students – to take advantage of a broader selection of learning opportunities.
Other allowable expenses would include special education therapies, tutoring, remedial services or outside educational coaching and guidance from any district or charter school. A statewide online exchange where districts post service availability would help parents find the precise services their children need. In typical cases, career counseling and other academic guidance services would continue to be provided by a student’s home district. But families could also choose to undertake a fully self-directed, blended learning experience and shop around for guidance services. Still, in any case, students enrolled in Flex Learning would retain their status as a public school student.
School districts could benefit financially from Flex Learning arrangements for multiple reasons:
- All districts would have the opportunity to grow revenue by receiving funds as a course or service provider.
- Some smaller districts might be able to better allocate resources by not having to dedicate resources to lightly enrolled courses that could effectively be outsourced to another district or provider that specializes in that area.
- Districts would retain a small share of the basic foundation allowance amount for students who enrolled in courses elsewhere. All districts receive significant funding in addition to the minimum foundation allowance, and some of this funding is not tied to enrollment levels.[**] Districts would retain this extra money to cover the minimal impact on their fixed costs, which they should constantly be striving to reduce.
[*] Five other states allow parents of eligible students to apply for publicly funded Education Savings Accounts, which can be used to pay for private courses, services and other education-related expenses. See “School Choice in America Dashboard” (EdChoice, 2020), https://perma.cc/ZS3V-BJXQ. The chief difference for proposed Flex Learning Accounts in Michigan would be that funds could only purchase courses and services from public education agencies or providers sanctioned by these agencies. According to the Constitution of Michigan of 1963, Article VIII, § 2: “No public monies or property shall be appropriated or paid or any public credit utilized, by the legislature or any other political subdivision or agency of the state directly or indirectly to aid or maintain any private, denominational or other nonpublic, pre-elementary, elementary, or secondary school.”
[†] MCL § 388.1631a(4) and (19)(d). This figure is derived by multiplying .115 times the statewide weighted average foundation allowance, a figure calculated by the author as $8,213.83 for Fiscal Year 2019-20. Flex Learning Accounts should fall under the last of four eligible purposes for designated At-Risk Funding: “ensuring that pupils are proficient in English language arts by the end of grade 3, that pupils are proficient in mathematics by the end of grade 8, that pupils are attending school regularly, that high school graduates are career and college ready.” See MCL § 388.1631a(1).
[‡] The 2019-20 minimum foundation allowance is $8,111. The 0.5% fee to DTMB would round to $41 per student account, and the 3% enrolling district fee would total $243. Subtracting the combined $284 from the standard allowance would leave $7,827 in the account; for economically disadvantaged students who receive the additional $945, the remainder would total $8,772.
[§] This differs slightly from Idaho’s Advanced Opportunities program, which gives each student an $1,800 scholarship for each year they are able to skip. Scholarships can be used at any in-state public postsecondary institution. See “Advanced Opportunities” (Idaho State Department of Education), https://perma.cc/97GL-HE5R.
[**] “2019-2020 School District Foundation Amounts” (Michigan Department of Education, 2020), https://perma.cc/AA9T-LWRG. In 2018, 36.4% of all combined Michigan school district and charter school revenues came from outside the foundation allowance. Author’s calculations made from National Public Education Financial Survey and Center for Educational Performance and Information data.