Reforming Federal K-12 Education Programs to Expand Equal Opportunity

Executive Summary 

• On average, American K-12 public schools spend roughly $15,000 annually per student. Yet national test scores show that a majority of American students are not mastering basic skills: in 2022, less than one third of 8th grade students scored “proficient” in reading; among lower-income students, 42 percent scored “below basic.” 
• Federal K-12 education programs have eliminated the funding gap between public schools that serve rich and low-income children that undermined equal opportunity in the past. But achievement gaps persist and prolonged school closures during the pandemic caused lower-income and minority children to fall further behind their peers all across the country. 
• In recent years, states have enacted historic reforms to expand parental choice in education, including universal education savings accounts. Roughly 40 percent of American children—more than 22 million students—now have access to private school choice or an ESA, in addition to the millions of students who can choose charter schools. 
• While the federal government’s role in education is limited, the White House and Congress should use existing authorities to expand parental choice, reduce regulatory burdens on charter schools, and improve transparency. 
• To expand equal opportunity in K-12 education, the White House and Congress should update major federal K-12 education programs, including ESEA and IDEA, to complement the historic state-level reforms to give children better opportunities to learn.  

Background

Access to a high-quality elementary and secondary education is  fundamental to the American dream. The typical American child will spend roughly 2,300 days in school, or a third of his adolescence. A student’s experience in school will shape his future as an adult. Children who master basic skills, acquire a foundation of knowledge, and form positive relationships with peers and adults reach adulthood with an opportunity to pursue happiness. Children who struggle in school, fail to master basic skills, or spend years in dysfunctional learning environments come of age with significant disadvantages. 

In recent years, states have enacted laws to dramatically expand access to school choice programs and to create  K-12 education savings accounts (ESA). Parents can use ESAs to pay for tuition, tutoring, homeschooling, and related education expenses In 2023, seven states created new programs and nine states expanded existing programs. In 2024, Wyoming established a new school choice program, while Louisiana and Alabama established education savings accounts that will become universal over time.  According to EdChoice, “over 22 million–or 40 percent of students nationwide—are now eligible to participate in a private school choice program,” thanks to “75 programs across 33 states, Washington, D.C., and Puerto Rico.”

While these state level reforms have little to do with federal laws, the expansion of choice programs provide federal policymakers with opportunities to  further promote equal opportunity.

Nearly sixty years of federal K-12 initiatives focused on promoting equal opportunity 

For more than a half century, federal policymakers from both parties have passed laws and funded programs to provide equal opportunity to high-quality K-12 education. Beginning in the Great Society era, policymakers tried to reduce inequality in funding for and access to education,  particularly for economically disadvantaged children and children with disabilities. The Elementary and Secondary Education Act of 1965 (ESEA) described the purpose of the Title I program as: “to provide all children significant opportunity to receive a fair, equitable, and high-quality education, and to close educational achievement gaps.” A decade later, Congress passed the Individuals with Disabilities Education Act (IDEA) that intended to ensure all children had access to a “free appropriate public education which emphasizes special education and related services to meet their unique needs.” Subsequent laws aimed to help other groups—including American Indian and Alaska Native children, migrants, bilingual children, English language learners, foster children, and homeless children— access a high-quality education. 

Public schools serving higher-poverty communities spend more per-student 

Federal K-12 education laws have succeeded in two primary ways. First, they have greatly expanded access to public education. Second, they have reduced resource disparities between public school districts, which had long been a source of inequality of opportunity. Federal data show that high-poverty school districts now spend more on average than districts that serve high-income students. (See figure 1.)  Public school districts serving low-income students spend more per student than those serving affluent students in 40 states.

Source: National Center for Education Statistics.

For more than 50 years, state courts and legislatures have taken action to equalize school funding levels. For example, 27 state supreme courts have issued rulings that prompted school funding reforms. In addition, many states have reformed their school funding formulas to establish “weighted funding,” which includes providing additional funds to support low-income children, English learners, and special education students. The United States has broadly addressed the problem of resource equality between public schools, but inequality clearly persists in K-12 education. 

Socioeconomic achievement gaps expanded during prolonged school closures 

Unfortunately, the federal laws to aid K-12 public schools have not closed achievement gaps or ensured that all children have access to a high-quality education. Decades of testing data on the National Assessment of Educational Progress (NAEP) show persistent achievement gaps and alarming percentages of disadvantaged children failing to master basic skills. The COVID-19 pandemic and the widespread, unnecessary, and prolonged school closures in 2020 and 2021 worsened scholastic inequality. While national tests show that all students, on average, regressed academically following school closures, disadvantaged children suffered most. 

According to the 2022 NAEP long-term test, the scores of children from lower-income households declined more than their peers. The test scores of children eligible for the National School Lunch Program declined by six points in reading and eight points in mathematics between 2020 and 2022, compared to three and five point declines in those subjects among ineligible children. Black children’s math scores dropped by 13 points compared to a five point decline among white students, which “resulted in a widening of the white-black score gap from 25 points in 2020 to 33 points in 2022,” according to NAEP. 

The long-term academic achievement gap and the recent experience during the pandemic highlight other sources of inequality that federal laws and programs have been unable to address. For example, public school attendance laws across much of the country continue to assign children to schools based on their residence. As a result, American parents’ options for enrolling their child in a public school depends on where they live, resulting in different educational opportunities for children based on their parents’ ability to afford housing in affluent communities. In some parts of the country, school district boundaries are carefully manipulated to segregate low-income households from high-income ones. According to a 2022 Reason Foundation analysis, only 11 states currently have mandatory open enrollment policies for public school attendance.

Residential assignment of public schooling also contributes to the “two-income trap,” described in a 2004 book co-authored by Senator Elizabeth Warren (D., Mass.).   In the book, she recommended public school vouchers as a way to help families provide for their children’s schooling and overcome these systemic barriers to upward mobility. 

Federal subsidies have not addressed the significant inequality in children’s outside-of-school learning opportunities. For example, a 2006 analysis found that the richest 20 percent of American families spent approximately $9,400 on enrichment for their children compared to $1,400 spent by the poorest 20 percent. These differences in outside-of-school opportunities contribute to the socioeconomic achievement gap. In 2011, RAND Corporation researchers reviewed academic literature about the effect of summer vacation on achievement. They found that all students on average regress over summer, but the summer learning slide disproportionately affects disadvantaged children. “Most disturbing,” the researchers wrote, “is that it appears that summer learning loss is cumulative and that, over time, these periods of differential learning rates between low-income and higher-income students contribute substantially to the achievement gap.”

While many factors contribute to inequality in K-12 education, including access to good teachers, the importance of attending a well-performing school e and gaining access to outside-of-school enrichment became particularly apparent during the COVID-19 pandemic.

Understanding the federal government’s limited role in K-12 education

Recent federal initiatives suggest that attempts to improve K-12 school quality from Washington are unlikely to succeed. The No Child Left Behind Act of 2002  attempted to improve public schools’ performance by mandating student testing, increasing public schools’ reporting about academic results—including information about specific student groups’ performances—and establishing consequences for schools that continued to fail. During the Obama Administration, the Department of Education (ED) attempted federal funding incentives and waivers—including the Race to the Top initiative—to encourage states to adopt voluntary national standards. But both No Child Left Behind and the Race to the Top failed to spur meaningful student improvement. For the most part, these reforms have been undone over the past decade.Current federal law under the Every Student Succeeds Act requires states to provide minimal transparency about students’ academic performance through annual testing and public reporting. while granting states and local education agencies discretion over how federal funds are used within the public school system. My 2023 review of states’ compliance shows that many states do not publish K-12 school report cards and testing in a timely or transparent manner. An analysis by Education Reform Now, a nonpartisan think tank, echoed these findings. 

Some conservatives and libertarians have called for the ED to be abolished since its inception in 1979, arguing that federal education programs are unconstitutional and incapable  of effectively implementing policies affecting nearly 100,000 public schools across the nation. However, they have never been able to attract sufficient legislative support for measures that would significantly reduce the federal role in education. While calls for abolishing ED may be popular with some voters, abolition is unlikely to get the support of 60 senators. Moreover, shuttering the department would not necessarily end federal education formula programs that provide substantial subsidies to states and local education agencies. Lawmakers may be reluctant to cut the funding programs for schools that serve disadvantaged children. 

Recommendations for 2025 and Beyond:

In 2025, the White House and Congressional lawmakers should pursue realistic reforms to strengthen accountability and choice for parents. They can use existing authorities to increase school transparency and also enact new reforms that will improve opportunities for the nation’s disadvantaged children.

Executive Action 1: Reform federal programs that grant the administration statutory flexibility to expand parental choice

In 2025, the White House should leverage existing authorities to expand parental choice. For example, in late 2020, the Trump administration issued an executive order to “allow funds available through the [Department of Health and Human Services’] Community Services Block Grant program to be used by grantees and eligible entities to provide emergency learning scholarships to disadvantaged families,” citing the need to access in-person learning during the pandemic. This program received $770 million in FY 2023. While the Trump administration’s executive order was not implemented, the next administration could reissue an order to let states use this funding to provide new and better options to disadvantaged children.

Executive Action 2: Improve transparency of public school spending, performance, and parental options

The White House should direct ED to improve spending and performance transparency to give parents informed and timely options for their children. For example, ED should ensure state education agencies comply with federal law and maintain and publish student test results. Annual state testing and public reporting is only useful to parents if that information is published in a timely and accessible manner. ED should establish a national database and map presenting timely data on per-pupil spending by school in line with the requirements in the Every Student Succeeds Act. ED also should collect and report new information about public school attendance and zoning rules to establish transparency about state and local school districts’ rules for residential requirements.

Executive Action 3: The White House should reverse recent regulations for ED’s charter school program

The charter school program, which received $440 million in FY2023, provides financial support to public charter schools. The National Alliance for Public Charter Schools has warned that new regulations “will discourage potential applicants from applying and burden charter school leaders and grantees with compliance requirements contrary to the mission of charter schools.” Public charter schools offer  high-quality options for many families. A recent national evaluation conducted by Stanford University researchers found that children attending public charter schools received the equivalent of 16 additional days of learning than their peers in traditional public schools. Low-income and English learner students in charter schools also demonstrated stronger growth than their traditional public school peers. Withdrawing these unnecessary regulations and providing public charter school operators greater access to funding would allow charter schools to better serve students’ needs.

Executive Action 4: Issue policy guidance to leverage existing tax benefits to expand education options

The White House should review current tax laws related to education and child care. Specifically, it should leverage existing authority to expand parental options by issuing choice-friendly policy guidance. For example, the Federal Employer-Provided Child Care Credit was created to encourage employers to expand the availability of affordable child care for their employees. The Treasury Department could issue guidance clarifying that employers using this credit could also provide educational instruction at child care facilities, which could help establish new microschools that provide both child care and educational services to children.

Congressional Action 1: Reauthorize ESEA and IDEA to strengthen parental rights, choice, and accountability

Congress should reform ESEA and IDEA to grant states and local education agencies more flexibility to use federal funding to expand parental choice in education. For example, reforming the federal Title I program to allow funds to follow students to a school of their parents’ choice would improve educational opportunities for disadvantaged children. Congress should reauthorize IDEA, which was last reauthorized in 2004. While past efforts to reform these programs have proven politically infeasible, the growing momentum of choice programs in the states indicates new support for giving parents more options. Federal lawmakers should update these programs to support parental choice.

Congressional Action 2: Establish new tax credits to expand parental choice in education 

In 2025, Congress should reform federal tax law to expand parental choice in education, including the allowable uses of funds deposited in section 529 accounts, encouraging low-and middle-income families to save in 529 accounts, and establishing a new federal scholarship tax credit. In the past, notably  in 2001 and 2017, Congress established new laws that gave families more ability to save for their children’s education expenses, including private school tuition. The next Congress should enact new reforms aimed at helping low- and middle-income families control more resources to provide for their children’s educations. For example, in 2022, Senators Maggie Hassan (D., N.H.) and Susan Collins (R., Maine) introduced the Helping Parents Save for College Act, which would have expanded the existing “Saver’s Credit” to allow for tax credits for contributions into 529s. According to Sens. Hassan and Collins, the change would have allowed a credit “worth up to 50 percent, or $4,000, of 529 account contributions made by low-and-middle income families.” This tax benefit–particularly if combined with the legislative proposals to allow funds saved in 529 accounts to be used for outside-of-school expenses and tutoring–could dramatically expand parental choice options. In addition, Congress could establish a new scholarship tax credit to encourage donations to help lower-income children access better education options. The Education Choice for Children Act, introduced in the 118th Congress, would make $10 billion in tax credits available to taxpayers who contribute to organizations that award scholarships for private school tuition and tutoring. 

Congressional Action 3: Congress should improve education options for military-connected families.

Congress has a responsibility to ensure that the estimated 900,000 children connected to the military living have access to a high-quality education. While 60,000 of these children attend Department of Defense Education Activity schools, the majority of military-connected children attend schools based on their parents’ location, which results in a wide variation of educational opportunities. While the federal government provides funding assistance to the public school districts that serve military-connected children through the Impact Aid program, this does not guarantee that those children attend high-quality schools. A 2021 Government Accountability Office review found that military-dependent children face many challenges, including transferring schools “up to nine times, on average, before high school graduation,” and that “military families frequently cite education issues for their children as a drawback to military services, according to DOD.” Congress and the Department of Defense have a responsibility to ensure that, among the sacrifices the patriotic men and women serving in the military make to safeguard our freedoms, sacrificing their children’s educational opportunities is not one of them. Congress could reform the Impact Aid program to give military-connected families more choices. In addition, Congress could grant military personnel more flexibility to transfer their earned education benefits to their children, including for use during the K-12 years.

Congressional Action 4: Congress should reauthorize and expand the D.C. Opportunity Scholarship to benefit more disadvantaged children

Given its unique relationship with the District of Columbia, the federal government has an appropriate role overseeing public education in the nation’s capital. Twenty years ago, Congress established the D.C. Opportunity Scholarship program, with bipartisan support in Congress and local support from then-Mayor Anthony Williams. The program provided private school scholarships to children from lower-income families living in D.C.. In 2025, Congress should reauthorize and expand this program to offer scholarships or education savings accounts to additional families.It should increase appropriations for the program while also expanding eligibility to include children with disabilities, foster children, and other at-risk students. Expanding educational choice in Washington, D.C. would provide a model for other states and school districts across the country.

Conclusion

Access to a high-quality public education has long been a source of inequality in American society. Well-intended federal laws and programs established since the 1960s have unfortunately not succeeded in ensuring that all children have access to education that will prepare them to succeed as adults. In 2025, the White House and Congress should make reforming federal K-12 education laws and programs a top priority, particularly to address the learning losses caused by prolonged public school closures during the pandemic. Reforming these laws and programs to improve school accountability and expand parental choice would complement the ongoing state-level reform efforts. Congress and the states can work together to give more parents the power to choose their children’s school or use an education savings account to ensure that their child receives a high-quality education.

For further reading:

1. Dan Lips, Restoring Transparency and Accountability in K-12 Schools, FREOPP, 2023 
2. Dan Lips, The State of Equal Opportunity in American K-12 Education, FREOPP, 2019
3. Dan Lips and Don Soifer, Expand Microschools with Employer-Provided Child Care Tax Credits, FREOPP, 2022
4. Dan Lips, Reducing Inequality in Outside of School Learning, FREOPP, 2020