Bending the Arc of Innovation to Benefit All Students

New schooling models need income-based sliding scale funding to become truly universal

Three kindergarten children explore a community garden

In a recent issue of Education Next, Derrell Bradford and Michael Petrilli tackled a critical school choice question: should wealthy families benefit from private-school choice programs? On one side, Bradford argues that including all families, even the wealthy, helps build a broader political coalition. Petrilli counters that funds should target lower-income families to ensure state fiscal responsibility.

Buried within the debate is an intriguing idea where they seem to have common ground: income-based sliding scales for determining the amounts of funding families receive in their Education Savings Accounts (ESAs). But their reason for suggesting sliding scales—a fiscally responsible way of ensuring universal choice—misses what may be the most promising (and most crucial) aspect of ESA policy.

ESAs do more than expand school choice; they create a vehicle for incubating new education models that could one day replace the outdated conventional “grammar” of schooling. Over time, these new models funded by ESAs could surpass today’s traditional schools in their capacity to engage students, accelerate learning, and equip students with the skills and adaptability needed for the modern world. But without well-calibrated sliding scales, ESA-generated innovations in schooling will likely bypass disadvantaged students, thereby deepening societal divides.

The innovation potential of ESAs

The conventional model of schooling is outdated and overdue for replacement. It was designed over a century ago to organize students into age-based cohorts; move them in groups through single-paced, classroom-based, teacher-driven instruction; then rank and sort them for different stations in an industrial economy. At its inception, it was the best-known model for providing mass education. For most people it’s just the way “school” has always been. But a model designed around standardization and batch processing inevitably lacks the flexibility and customizability to address the diverse needs and circumstances of today’s students, especially given the heightened demands of the modern world.

Unfortunately, replacing the conventional model is easier said than done. My recent Education Next article argues that most efforts to transform schooling fail because they remain trapped in value networks that uphold conventional schooling. These value networks—which include families, policymakers, educators, higher ed institutions, etc.—resist changes that threaten the status quo. As a result, efforts to redesign schools typically produce incremental improvement, not true transformation. Real change requires building new models of schooling outside established value networks.

Enter ESAs, a funding mechanism that allows innovation-minded leaders to cut ties with conventional value networks. Programs funded by ESA dollars aren’t bound by regulations like seat time, core curriculum, and teacher credentialing. ESAs also allow these programs to launch with the purpose of serving families who are eager for something different, rather than having to cater to the majority of families who just want a better version of conventional schooling. The freedoms afforded by ESAs allow providers to experiment with new “grammars” of schooling. Not all education programs that take ESA funding will push the frontiers of school innovation; in fact, many families will likely spend their allotment on conventional private schools that align with the family’s preferred curriculum or pedagogical philosophy. But some ESA-funded programs—such as the growing array of microschools and hybrid programs—thrive on the flexibility that ESAs enable.

A catalyst for disruptive innovation

By providing an escape route from conventional value networks, ESAs unlock unprecedented opportunities for disruptive innovation in schooling. But what is disruptive innovation? It refers to a phenomenon whereby new business models start off serving the fringes of a sector but eventually transform it. Well-known examples include Netflix (movies), Amazon (consumer goods), and Apple (home computing). In education, ESA-funded disruptive innovations have taken root by appealing to students and families who are eager to leave conventional schooling behind for something different—think homeschoolers or the chronically disengaged. But over time, they could evolve to attract students and families away from conventional schooling, thus reshaping the entire educational landscape.

Note that disruptive innovations never start out looking disruptive. It wasn’t Netflix’s rent-by-mail DVDs that disrupted Blockbuster; nor did early Nokia camera phones disrupt Kodak. Likewise, we shouldn’t expect emerging models of schooling as they exist today to disrupt conventional schooling. Rather, it’s the school models we’ll see a decade from now that could become compelling alternatives to today’s status quo.

What could disruptive models of schooling look like? They could look like microschools across a metro area forming a network that allows them to collectively offer experiences like team sports, band, theater, and school dances. They might be school sites that work like shopping malls, where independent course providers, tutoring centers, coding camps, makerspaces, and companies offering internships are all co-located to make it easy for students and families to assemble highly customized schooling experiences. Or imagine a single microschool expanding into a large franchise of schools across the country, thereby achieving the scale needed to systemize a model for helping any student—regardless of background—ace elite college admissions.

It’s impossible to predict exactly what future disruptive models of schooling will look like. But we can say this for certain: any new school models that seek to grow their market share will have to figure out how to attract families who are currently content with conventional schooling.


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The disconnect between costs and needs

If ESAs are to catalyze disruptive innovation, there’s one aspect of this disruption phenomenon that we need to keep in mind. The priorities that shape the improvement trajectories of new schooling models—and whether they benefit all students—will depend on the incentives set by state ESA policies.

Often with disruptive innovation, the improvements that companies are motivated to pursue are those that help them move upmarket, reaching more customers and earning higher profit margins. In most markets, the more demanding customer tiers will pay a premium for higher-quality products. This is why Netflix expanded from DVD rentals to streaming, and why Amazon evolved from shipping just books at book rate to offering one-day delivery of practically everything.

But in education, there’s a problem with this pattern. Education’s “most demanding customers”—those with greater needs and more challenging circumstances—are often not those who can afford to pay higher prices for improved services.

Consider special education. Learning challenges do not fall disproportionately on the children of the wealthy. In fact, children from low-income families are more likely to have special needs. But greater need doesn’t equate to a greater ability to pay. If ESA policies don’t offer a premium to providers that serve students with special needs, innovative new models of schooling will largely pass on serving those students—except those from wealthy families who can supplement their ESA dollars with money out of pocket. State mandates requiring providers to serve students with special needs won’t solve the problem given that special education’s average cost per student exceeds ESA allocations. Providers in low-income communities will just go out of business.

Now consider circumstances other than special education. Many of today’s microschools are built on some basic assumptions about the families they serve. For example, they assume that families can provide their own transportation and meals, arrange childcare that complements a shorter school day, supplement their microschool experiences with extracurriculars that the school doesn’t provide, and pay for things like therapy or educational specialists on their own. These assumptions make microschooling an unworkable option for some of the families that could benefit the most from an alternative to conventional schooling. But with the right incentives, some microschools will work to figure out how to serve students they can’t serve well right now.

States need sliding-scale ESAs to ensure these students aren’t overlooked. Without additional revenue to offset the higher costs associated with higher needs, providers won’t invest in the improvements necessary to support high-need students. Innovative providers must have a business case for serving students with greater needs and lesser means.

Bending the arc of innovation

Without a mechanism that rewards schools for serving students with greater needs, we risk seeing a generation of new schooling models that only cater to students and families with inherent advantages. We’ll likely get models that are ever expanding the breadth, flexibility, and rigor of what they offer middle- and upper-income families while never tackling the expensive circumstances that make them hard for many lower-income students and families to take advantage of. If that future of limited scope comes about, don’t be surprised when people who are eager for innovation but mindful of equity join forces with those opposed to ESAs.

In the end, for ESAs to become a legitimate form of public education funding, they need to provide a strong market signal that motivates providers to serve the public good. By tying higher funding to the ability to effectively serve students with higher needs, states will foster innovative new models of schooling that benefit all students.

Thomas Arnett is a senior research fellow at the Clayton Christensen Institute.

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