Direct Funding to Users: A Schematic Analysis

Direct funding to users, or student-choice programs, are usually referred to as 'voucher schemes' in the literature. The literature, however, has little to say about vouchers in the context of post-secondary education. A voucher scheme at the elementary or secondary school level operates in an environment of com- pulsory attendance and makes vouchers available to all school-age children who use them to buy education at the school of their choice. At the post-secondary level, where attendance is not compulsory, a voucher scheme would have to take into account (among other things) how many vouchers to make available, how much they should be worth, and who would receive them. In this respect vouchers resemble scholarships. They could, of course, be made available to all students admitted to an accredited post-secondary institution; on the other hand, if the supply of vouchers were limited, they could be rationed on the basis of academic achievement, family income, athletic ability, competi- tive examinations, etc. The term 'voucher schemes' has become synonymous with systems that emphasize student choice in determining the allocation of resources to and within education. The coinage of the term is generally attributed to Milton Friedman, who used it in his 1955 essay, 'The Role of Government in Education'.1 In 1980 Friedman re-examined and reaffirmed the concept in a much-publicized book he wrote in collaboration with Rose Friedman, 'Free to Choose'.2 More recently still John Holland and Saeed Quazi,3 in a study done for the Secretary of State, reviewed the voucher literature and proposed a scheme that incorporates a financial aid component with a means test. Generally speaking, the reasons put forward for adopting a voucher scheme are these: greater social equity, improved institutional efficiency, enhanced federal visibility in funding of post-secondary education, and promotion of specific fields of study.