How to Help DPS without Hurting Other Schools

There are approximately 47,000 students in the Detroit Public Schools who are struggling to get access to a quality education.  The reasons for this struggle are varied and complex, but one of the critical issues is the DPS debt.  Governor Snyder is committed to find a way to retire $515M of DPS debt.  It is vital that these debt obligations be met.  It is equally important, however, that these debt obligations be met without impacting the finances of other school districts in our state.

We need a solution that does not dip into the School Aid Fund (SAF) to provide targeted aid to Detroit.  Dipping into the SAF would simply increase the likelihood of other school districts joining Detroit in the insurmountable debt category.  In order to find a solution that does not hurt other school districts, it is time to take a serious look at non-government funding sources.

Recently, decades of mismanagement by the City of Detroit were resolved via a bailout that featured overwhelming generosity from non-government sources interested in preserving the financially troubled Detroit Institute of Arts (DIA).  It was an example of government officials looking beyond tax increases to solve a problem.  Do you share my belief that the students in Detroit are infinitely more valuable than the DIA?  Given the proper environment, the students in Detroit will create works of art and commerce more gratifying than anything currently hanging on a wall in the DIA.

So let’s find a way to promote this environment.

What if there was a way to help the students and still hold the bureaucracy responsible for mismanagement accountable?   It turns out there is a way.

What if instead of allocating funds directly to bureaucrats in school districts, school funds would be deposited directly into student-specific Educational Savings Accounts (ESA)?  The accounts would operate much like today’s Michigan Education Savings Plan for higher education but would be eligible for educational services at all levels.  By doing so, parents, not bureaucrats, would direct how that money is spent.

Furthermore, student-specific ESA’s open the door to 3rd party contributors with a vested interest in the success of an individual student.  Examples of such contributors include prospective employers struggling to find qualified workers, philanthropic foundation grants, or consumer loyal program participants interested in directing their loyalty awards to a specific student or group of students.

In order to erase Detroit’s debt, only $1,500 per student per year needs to be added to these accounts over the next 10 years.  Many Detroit schools are already operating with 3rd party contributions of well over $5,000 per year per student in exchange for work-study arrangements.  Loyalty programs are an $80B market nationwide.  Foundations stepped in with over $300M to bail out the City of Detroit.

The state simply needs to implement a mechanism for these organizations to contribute in a way that is specific to an individual student.  The best way to do this is an Educational Savings Account.

It is important to note that that ESA’s would help solve funding issues well beyond DPS.  Do you think that DPS is the only school district seeking additional funding?  What about students struggling with the high cost of college education?  ESA’s provide a way to address these issues too…without raising taxes.

Posted in Colbeck-Editorials, Editorials, Uncategorized.