School Choice : Frequently Asked Questions

 What is School Choice?

Every parent wants to provide their child with everything within their means that will ensure a bright future. School choice means that parents' should be able to choose the schooling they think is right for their child.

Education vouchers, cash stipends, tax exemptions for education and reforms in government schools funding are instruments which government can use to increase school choice for parents.

Today school choice exists for rich and middle class parents who have a variety of private schools they can send their children to. Parents with low incomes are also making large investments in their children's future. Some low income parents spend upto 50% of their income on the education of their children.

However there are still poorer parents who, in spite of their aspirations, cannot afford to choose the best education that their child can get. These parents are forced to send their children to government schools.

Parental choice can help make government schools more accountable and efficient, by allowing parents to make the most basic decision about which school their children will go to. This is the best way of achieving the twin goals of delivering the child's right to education (now enshrined in the constitution), and the parents' right to choose what is best for their child.

 What are school vouchers?

A school voucher is a special scholarship, which allows eligible parents to put their child in any school, government or private. Once enrolled the the whole or part of the school fees are paid by the government. School vouchers let even poor parents have a choice about which school their children go to. Today government provides funds to schools-government and private-aided. These schools then provide education to students. We believe that education for the poor can be greatly improved by issuing vouchers to those in need. School voucher is a coupon of a specific amount that can be redeemed at any school chosen by the parent.

Existing model of funding education
In the present system, the schools are accountable to the government bureaucracy. Funds follow schools, which in turn, provide education. The government pays teachers irrespective of their performance and schools are mostly indifferent to disgruntled parents or students.

Voucher system of funding education
In the voucher system, schools are accountable directly to parents since they pay for the education through vouchers.

If the parent does not like the school, she can take her child along with the voucher to another school. Under the voucher system, money follows the student. Schools-government or private-to get the voucher, have to compete and satisfy the poor parent. Parents decide and parents choose, not government bureaucracies.

Types of vouchers
Vouchers can be universal covering all children (Sweden, Chile, and Netherlands). They can be Means-Tested covering only those children from families below a defined income level (Cleveland, Milwaukee and Washington D.C.). Vouchers can also be issued to failing students or to students from failing schools (Florida, Ohio). Here, children who are performing poorly in public school or who are attending failing government schools are eligible. Special-Education Voucher Programs include children identified as having special educational needs (Ohio Autism Scholarship Program, Florida-McKay Program). Read our review of the voucher programs of eleven countries.

Indian states have the necessary ingredients for a successful voucher program. CCS would like to tap into this potential and demonstrate the efficiency of education vouchers in improving access to quality education for the marginalized. Global Experiments in Education Vouchers Sweden, Netherlands, Chile, Italy, USA, UK, Colombia, Denmark and New Zealand have a universal education voucher program where the government subsidises education for all children by way of vouchers. Czech Republic, Cote d' Ivorie have a targeted or selective voucher program.

 How can a non-school choice system be changed to a school choice system smoothly?

Since it is a systemic change, the change could start with pilot projects and then grow in scope and size. Such voucher pilot projects could be conducted at a local level, and structured to suit the needs of the particular communities they serve. The government can also provide vouchers to selective groups- specially the underprivileged sections of the society in the following manner:

* Conduct voucher pilots in urban areas where the number of schools, both private and government, is not an issue but the main concern is the quality of schooling.

* Conduct voucher pilots in peri-urban areas like resettlement colonies or areas where no government schools exist. Whereas building new government schools here would take time, the problem of schooling for these children needs to be addressed immediately. School vouchers would be a quicker, equitable and efficient solution.

* Implement in tribal areas where the supply of schools is a chronic problem with some support to the private partner for capital costs of a new school and covering the running cost by guaranteeing 50-75% students in new schools through vouchers.

 Is it anti-government schools ? Is it privatization of education that is anti-poor?

School vouchers are an innovative form of public-private partnership. It is pro-competition and pro-development. If government schools become better than private schools, then parents wanting the best for their children will shift their children to government schools. Most government schools are better equipped than the budget private schools that the poor use, in terms of infrastructure of libraries, labs, and playgrounds, amount of funds they have per student, and qualification and training of the teachers. On head-to-head competition, government schools should out-compete budget private schools. The government schools need stronger incentive to compete and vouchers provide that much needed incentive. Public and private schools co-exist today. They will under the voucher system.

 Are vouchers just about choice?

Although the central idea of the voucher system is to provide quality education of choice, it also brings with it accountability, transparency, financial prudence and infrastructure development which ultimately culminates in the establishment of an effective and equitable education system.

 Will School Choice burden the government funds?

School Choice, because it brings in more transparency and accountability in the education system through efficient use of public funds, it in fact reduces the government's expenditure. Further, since school vouchers, the School Choice vehicle, cater only to the recurring cost of educating a child (all or a part of fees, stationary, uniform, etc.), the government saves the capital expenditure involved in erecting new schools.

 What is a cash stipend?

A cash stipend is a cash allowance given to poor parents provided they fulfill certain conditions. An education cash stipend would be conditional on the child attending school regularly.

The most popular type of cash stipend includes a combination of education, health and nutritional initiatives and is extensively used in Latin America and the Caribbean where it was initially developed. In South Asia, Bangladesh has a large scale cash stipend programme for girls education.
Cash Stipends are direct subsidies that give monthly cash allowance to the poor provided they meet some criteria. The stipends are conditional upon usually sending the child to school or taking the child for regular health check ups. The most popular type of conditional cash stipend includes a combination of education, health and nutritional initiatives and is extensively used in Latin America and the Caribbean where it was initially developed.


Cash Stipends for Education
In South Asia, Bangladesh has tailored this idea to resolve its high drop out rates among girl students. The program was so successful in achieving its objectives that a new program covering all primary students was later implemented.

Here, a cash stipend in the name of the girl child is deposited in the mother’s account. The stipend is renewed on achievement of minimum attendance and student performance criteria. Moreover, the girl has to remain unmarried until she is 18 years old.


Cash Stipends and ‘quality’ and ‘universalisation of education’
India has a two-tiered system of education. Those who can afford, go to private schools; those who cannot, go to government schools. Government schools are typically characterized by poor learning outcomes, high teacher truancy, high student dropout rates and a complete apathy towards students. Direct cash stipends to the parents (or specifically, the mother) can empower them to send their child to a school of their choice. It mitigates the economic constraints of parents who would rather send their children to work than to school. Besides, parents who have fully understood the value of education can personally add to the cash stipend to send their children to better (if, more expensive) schools.


Cash Stipends provide direct subsidies empowering beneficiaries to decide for themselves what is good for them
If we believe government has an obligation to fund education for the poor that need not mean it should build boxes, hire teachers, buy blackboards and other aids. All children deserve the best education that money can buy. If government has to fund education, let it do so by funding the individual. FUND STUDENTS, NOT SCHOOLS. Fund the consumers (parents and students) and not the providers of education. Let individuals decide the education they want.

Cash Stipends leave the profile of the education expenditure to the parents’ discretion. Parents may choose government or private schools; use the stipend for uniforms or textbooks or mid-day meals for the child. The stipend is only contingent on the student’s performance in school.


Who are the beneficiaries? How do we determine them? How do we prevent fraud and leakages? These are some common legitimate concerns in any cash stipend programme. Cash stipends are generally means-tested covering only those below a defined income-level. It can be further stratified to include gender, disability or into disadvantaged groups within these income-levels.


In the case of Bangladesh, a simple bank account in the mother’s name is used for depositing the cash stipend. Smart Card technology is another inexpensive and efficient instrument that can be used to mitigate implementation challenges. The booming micro finance sector is pioneering such resource delivery technologies.
Such technologies maximise the amount of taxpayers’ resources to the intended people by drastically reducing leakage and fraud.

 What is a tax exemption for education?

Taxpayers in India are already exempted from paying taxes for money they spend on their own children's education. If a person wants to help children go to a school of their parents' choice by paying the school fees, those fees should also be exempt from taxation. Such tax exemptions should be extended to corporations which will encourage them to help fund the education of poor children. They can then setup scholarship funds and privately funded education voucher schemes, that increase parental choice. Tax exemptions will increase people to people cooperation in achieving education for all.

 What is a budget private school?

Budget private schools, are low cost private schools serving the poor. Recent research corroborates what would be apparent from a walk through almost any slum colony, that poor parents are increasingly sending their children to such budget schools. These schools are often unrecognised, and have only the most basic facilities. Government policy, however, has turned a blind eye to the service provided by these schools. While the government continues to support failing government schools, it has also imposed several regulations and licenses making it difficult for budget private schools to operate legitimately. The illegal and unrecognised nature of these schools has made it difficult for them to access formal capital and bank loans. Add to this, the constant threat of being forced to shut down by government agencies. There is an urgent need to deregulate and de-license the education system. If we are to educate millions of children, we need more of these budget private schools. Parental choice is irrelevant if there are no schools to choose from.

 Are there any private budget schools in rural India?

28% of the population of rural India has access to fee-charging private primary schools in the same village (Muralitharan and Kremer). 18.8% of children aged 6 - 14 in rural India attend fee-charging private schools (ASER). Muralitharan and Kremer found that villages with high teacher absence in the government schools are significantly more likely to have private schools, and that this result is robust to being aggregated at the district and state levels. They also found a robust negative relationship between per capita income and the prevalence of private schools at both the district and state-levels, confirming that it is areas with poor government schools as opposed to richer areas that are more likely to have private schools. The challenge for policy is therefore to think about ways in which the superior efficiency, flexibility, and accountability of the private sector can be leveraged for better educational outcomes for all children. A scholarship/voucher system is a promising way of doing so.

 How can private schools afford to be budget schools?

Private-school teacher salaries in rural India are typically less than one-fifth the salary of regular government school teachers (and are often as low as one-tenth). This enables these private schools to hire more teachers, have much lower pupil-teacher ratios, and reduce multi-grade teaching. An idea of the relative cost-efficiency of the private schools can be gathered from the fact that the total monthly revenue of a typical rural private school is often less than the monthly salary of one government school teacher.

 What about the performance of teachers in budget schools?

Private school teachers are significantly younger and more likely to be from the local area as compared to their counterparts in the government schools. Research shows that they are 2-8 percentage points less absent than teachers in government schools and 6-9 percentage points more likely to be engaged in teaching activity at any given point in time. One reason for this is likely to be that head teachers in private school are much more likely (and able) to take disciplinary action against shirking teachers than their counterparts in the government schools. We found that only 1 head teacher in the nearly 3000 government schools we surveyed reported ever dismissing a teacher for repeated absence. Researchers Muralidharan and Kremer note that shirking teachers in the private sector are around 175 times more likely to have disciplinary action taken against them! Combining the effects of a lower pupil-teacher ratio and a higher level of teaching activity leads to a child in a private school having 3-4 times more "teacher-contact time" than in a government school in the same village.

 Why parents choose budget schools over free government schools?

Private schools start teaching English significantly earlier, which is something that parents repeatedly say they value in interviews. Private schools on average have inferior infrastructure and facilities compared to government schools, and the teachers have typically not undergone teacher training. But in spite of this, children in private schools have higher attendance rates and superior test score performance, with the latter being true even after controlling for family and school characteristics. These factors probably explain why even parents from highly disadvantaged backgrounds are willing to pay fees for their children to attend private school as opposed to attending the free government school in the same village.

 What kind of a licensing system are we talking about?

The government has detailed specifications for classroom size, playground facility, to hiring, firing, and salaries of staff and teachers. Undoubtedly all these regulations are well intended. But the outcomes more often are perverse. Deepalaya, a school for slum children in Delhi, has been refused recognition by the government for more than 10 years on the grounds that it does not pay the stipulated salary to its teachers. One of the most daunting licenses is the Essentiality Certificate (EC). An EC is an essential document certifying the requirement of a school in the particular zone, on the basis of which land is allotted to the society for the purpose of building a new school. An EC is stipulated to avoid proliferation of schools, which could make existing schools redundant. The Department of Education decides the need for a school in a particular zone. By restricting the supply of schools in an area, it restricts the role of the market in assessing the demand for school education. Denying a school an EC creates an artificial scarcity of schools and allows existing schools to exploit their customers.

 How Delhi got rid of the Essentiality Certificate?

There are almost 12 lakh out-of-school children in Delhi. In several districts, in spite of the demand, only a few schools were allowed to exist. In December 2005, Centre for Civil Society, organised a meeting with legislators of Delhi to address the licensing issue. We especially highlighted the pitfalls of the EC and urged the Education Minister, Arvinder Singh Lovely, to repeal it. In March 2006, we achieved a major breakthrough with the Minister removing the cap on the number licenses given out by the government to open schools. Delhi is setting a great precedent and hopefully the other states will follow soon.

 What reforms in government schools will increase parental school choice?

Government schools will benefit parents the most when parents can exercise control over where their children can go to school. Since poor parents are forced to go to government schools, teachers and administrators have limited incentives to improve educational outcomes or parent involvement. Decentralisation of education administration to urban and rural panchayati raj institutions, enrollment and performance based funding for schools and charter schools are some ways of increasing parental school choice within the government school system.

 Case for Child-based funding

In India, there is no correlation between government school funding and the number of students. Schools with fewer students, resulting out of a high drop out rate, often receive the same amount of funds as those catering to large number of students. The existing model of funding leaves little incentive for schools to be bothered about their drop out ratio and student performance. While there are some rules for private aided schools, the majority of government schools follow an arbitrary system of funding. Weighted student formula is one way to increase the competitiveness of government schools. The same formula can be used to fund private aided schools so as to reward better schools, as decided by the criteria discussed above. Alternatively, government can distribute education vouchers so parents, especially those who are economically weak, can choose between schools-private or government.