Out of Pocket? Out of Reach: How Hidden Costs Affect Participation in a Means-Tested School Choice Program

ABSTRACT

We examine how low-income parents who apply for North Carolina’s Opportunity Scholarship program navigate major obstacles to their full participation in this means-tested private school choice program. Using a mixed-methods approach, this study draws upon administrative data from the state agency that oversees the program, surveys of every applicant family across two consecutive school years (2015–16 and 2016–17), and focus group data from two regions of the state. We uncover four major themes related to applicant families’ decisions to explicitly or implicitly decline the offer of a private school voucher: Program eligibility requirements, parents’ difficulties acquiring program information to assist with the application process, students’ inadequate academic preparation, and financial barriers to participation. Even though eligible families can qualify for financial assistance of up to $4,200 per year, hidden costs appear to play a particularly important role in voucher use. We discuss the policy implications of these findings and offer recommendations.

KEYWORDS:

• Private school vouchers
• school choice
• means-tested program
• market-based reforms

Acknowledgments

This paper benefitted greatly from feedback received by the participants at the 2020 International School Choice and Reform Conference, NC State University’s Educational Evaluation and Policy Analysis Program brown-bag seminar, and the Meredith College Educational Series on Public Policy. We are also deeply indebted to Drs. Carolyn Sattin-Bajaj and Robert Fox who reviewed drafts of the manuscript and provided helpful feedback and to Duke University graduate students, Martine Aurelien, Kerry Condon, Stephen Pangle, and Chandler Rowland for their valuable research assistance.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. This comparison reflects all sources of funding (local, state, and federal) received by both sectors. Because the voucher program does not receive any funds from local or federal sources, it is also instructive to compare the voucher value to the portion of public school funding that comes from state sources only, which is $5,634. The voucher value is 75 percent of this amount.