Study Reveals School Choice Savings, Highlights Indiana's Decreasing Education Spending

A new study says school choice options in Indiana have saved the state millions in education spending. But researchers say the cost-savings come as the state spends less on education than it did more than a decade ago.

According to an analysis from the Center for Business and Economic Research at Ball State University, Indiana saved nearly $90 million during the 2019-2020 school year because of school choice. Much of the savings came from private school vouchers because those are funded at a lower per-student rate. 

But economist and study co-author Michael Hicks said the choice option most students in Indiana use is a transfer between public schools – and it saves the state money when kids go to schools that receive less funding per student in the state's formula.

"The real beneficiaries of school choice have been high performing local public schools," he said. 

Dagney Faulk, CBER director of research, said there hasn't been much analysis of school choice in Indiana, but she plans to look into the academic effects, as well as the changing financial impact, of choice in the future.

"We just need to do a better job of analyzing the impacts of that, because we spend a lot of money on school choice and we don't know a lot about the impacts," Faulk said.

Faulk and Hicks said the state's recent expansion of the school voucher program will likely reduce the amount of savings the state has seen so far. 

The study also highlights a decrease in state spending on education over the past decade when adjusted for inflation. The report says for every one dollar the state saved through choice, lawmakers have reduced state education spending by another seven dollars.

Contact reporter Jeanie at jlindsa@iu.edu or follow her on Twitter at @jeanjeanielindz.