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School Choice Vs present Monopoly System

Over the years, India has tried varied approaches to improve enrolments and the quality of school education. As the latest Pratham survey shows, there is a huge gap between our aspirations and actual achievements. In the process we have created a two tier system of school education. Those who can afford fees go to private schools and those who cannot, go to state schools. This gross inequality of schooling opportunities is the result of our current approach to education.

The school voucher is a tool to change the way governments finance the education of the poor. It is a coupon offered by the government that covers the full or partial cost of education at the school of the student’s choice. The schools collect vouchers from the students, deposit them in their bank accounts and the banks then credit the school accounts by equivalent money while debiting the account of the government. No money actually changes hands, only the voucher moves from the student to the school, and back to the government.

In the present system, the schools are accountable to the government. The voucher system makes them accountable directly to the students since they pay for their education through vouchers. If the student does not like the school, she can take the voucher to another school. Under the voucher system, the money follows the student. In the present system, the money follows the school.

The School Voucher provides:

Choice for students: The voucher empowers poor students so that they can attend a school of their choice. If the school does not meet the expectations, they have the choice to change schools.
Equality of opportunity: The scheme satisfies the basic human right that all children are treated equally and equal opportunity for education is provided to all irrespective of cash, caste or creed.
Competition among schools: Today private Indian schools only compete for the students with money. With vouchers, not only private schools, but also government schools will compete for all students, rich and poor.

Performance based payment: The revenue of a school depends on the number of students it has both who pay directly and those who pay through vouchers. Schools therefore have an automatic incentive to increase enrolments and to improve quality to retain students.

Win-Win outcome: Those government school students who get a voucher are able to change schools and do better for themselves. Evidence suggests that even those students who stay in government schools also perform better. First, the student-teacher ratio improves and second, schools become more attentive to stop student numbers from going down further. All students achieve better learning outcomes.

In a voucher system, instead of funding schools, the government funds students. The resultant choice and competition working together provides universal access as well as improving quality education.