As Education Choice Grows, Expect More School Unbundling, But No Great Unbundling

Every few years it seems that hype grows around the possibilities of unbundling education. The latest fuel is the emergence of at least 14 states with education savings accounts (ESA) programs that allow families to pay for a variety of educational programs and supports from public funds.

As a recent article in Education Next, where I’m an executive editor, proclaimed, “While parent-led unbundling is not a new phenomenon, the current movement has expanded so quickly that it’s been dubbed ‘the Great Unbundling’ of K–12 schooling.”

But we should be cautious about such grand statements. Good theory on innovation can help us parse out the hype from what’s likely to play out.

First, in favor of the argument that we will see more unbundling, despite the media’s conflation of ESAs with vouchers, there is a substantial difference between the two that can drive unbundling.

A voucher allows an individual to use a set amount of funds on one specific service, in this case tuition at a private school. Think of it more like a ticket. The voucher can’t be separated into smaller, discreet parts. As a result, the consumer doesn’t have much incentive to think about things like cost-quality tradeoffs and value below the amount of the voucher. They don’t benefit from spending less than the value of the voucher. They use the voucher to get access to a school, and then it’s done.

An education savings account, on the other hand, deposits funds into an account that a family controls. Like a bank account, they can use the money in a variety of ways. They don’t have to spend it all in one place. They can decide to spend on a microschool with limited offerings that costs less than the funds available in the account because they know they’ll have other funds remaining to spend on other services like tutoring, enrichment activities like music or sports, specific academic programs, or even tickets to SeaWorld akin to a school field trip. As a result, they have lots of incentive to think about cost-quality tradeoffs and to consider a broader universe of education possibilities that transcend schools. Families can theoretically even decide not to spend all the money deposited in the account in any given year and save the money for future purchases or investments in a child’s education. Much as is the case with the emerging research around income stipends such as the Chelsea Eats Program, although the funds come from a third party—in this case the government—the money now belongs to the families; they are able to break it out as they need to support their needs and specific circumstances.

At the same time, just because families have the option to spend on a variety of educational services and unbundle schooling, doesn’t mean they will choose to. A good theory—the theory of interdependence and modularity—helps illustrate why. It casts cold water on the notion that this will be the “great unbundling of school” rather than a “relative unbundling.”

Photo by NEXT Academy on Unsplash