Legislators expanded the program in 2018 and required the state auditor to study the “fiscal” and “economic” effects of the program by 2023. The report by KSU’s Education Economics Center provides a first look at its impact.
If this scholarship program had not been available, the vast majority of these students would have attended public schools, where federal, state and local taxpayers would have covered the full cost of their education. To estimate its fiscal impact, one must compare the taxpayer costs of educating students with scholarships with the taxpayer costs of educating most of these students in public schools.
The average taxpayer cost per scholarship provided was $3,713 per student – significantly less than the $5,717 state average per pupil expenditures in public schools, and less than one-third of the total expenditures per public school student, $12,796, according to data from the Georgia Office of Student Achievement and the state Department of Revenue.
In 2018, 13,895 students received a scholarship under the QEE program. Using a cautious approach—that 90% of these students would have enrolled in public schools if these scholarships had not been available, the analysis found it would have cost almost $105 million to educate these students in public schools. The cost of educating all 13,895 scholarship students via the QEE program cost the state $51.6 million—which means the QEE program provided a total savings of $53.2 million to Georgia state and local taxpayers in 2018. Of these total savings, $19.9 million were savings for state taxpayers and $33.3 million were savings for local taxpayers.
The program’s “economic” effects are estimated by comparing high school graduation and college entrance rates between scholarship students and students in Georgia public schools. Data on students who received a scholarship from the largest SSO, Georgia GOAL, show that 99% of GOAL students graduate from high school, compared to 82% of public school students.
GOAL students also enter college at a significantly higher rate than public school students, 87% compared to 68%. Scholarship students who qualify for free or reduced-price lunch (one measure of economic disadvantage) also outperform their public-school peers by graduating high school and entering college at significantly higher rates.
Higher educational attainment is associated with a host of positive outcomes. Students with higher educational attainment earn more income throughout their life, pay more taxes, have fewer health care costs, and are less likely to commit crimes, all resulting in significant benefits to individuals and society.
In upcoming years, GOAL students’ future progress will provide us with data to analyze any difference in college graduation rates between GOAL and public school students.
Cautious estimates from the academic literature on the returns to educational attainment show that if students receiving scholarships from other SSOs graduate high school and enroll in college at a similar rate as GOAL students, Georgians would experience an economic benefit of $66.4 million from the scholarship students who entered ninth grade in 2018.
Overall, the report reveals that the QEE program offers significant cost savings to state and local taxpayers, and scholarship students have higher educational attainment than students in Georgia public schools, a win-win for Georgia students and taxpayers.