What Happens in Vegas Stays in Vegas – or Not?


Nevada’s legislature just passed legislation to launch the nation’s most expansive Education Savings Account program.


Pascal-Emmanuel Gobry recently wrote an article in the National Review entitled: “The Way Forward for School Choice — It’s Not Vouchers.”

What is the way forward according to Gobry? Education Savings Accounts.

He writes:

But the bottom line is that true school choice involves not just your choice of school, but your choice of schooling. Vouchers would change what a school would look like. K–12 spending accounts would change what schooling would look like.


We don’t know if Education Savings Accounts will work. They might or they might not. But I’d like to find out.

So my advice to leaders in Nevada is simple: beware of fuck-ups that will derail the program.

Perhaps the greatest threats to deregulation are high-profile mishaps that turn public opinion against the effort.

While there’s much I like about Education Savings Accounts, it’s not difficult for me to come up with a story where Education Savings Accounts are a total disaster.

Leaders in Nevada need to understand this. They need to sweat implementation. They need to protect against worst case scenarios.

Even the most ardent libertarians should understand that policies are not judged by their potential or actual utility; they are judged by the theater of public opinion.


Here’s some details of the funding of Nevada’s Education Savings Account program:

  • For children with disabilities or students from families with incomes less than 185 percent of the federal poverty level ($44,863 for a family of four), students will receive 100 percent of the statewide per-pupil, or around $5,700.
  • For families with incomes exceeding 185 percent of the federal poverty level, the funding amount is 90 percent of the statewide average basic support per pupil, or around $5,100.

The funding can be used for just about anything education related, including:

  • Tuition and fees at an approved private school;
  • Tutoring or other services provided by a tutor or tutoring facility that is a participating entity;
  • Tuition and fees for a distance learning program;
  • Fees for any special instruction or special services if the child is a pupil with a disability;
  • Fees and tuition for a college or university in Nevada if that student utilizes those expenses for dual credit.


Another way to think about the roll-out of an Education Savings Account program is that is a race between educators and charlatans.

Charlatans can move quickly. They can create tutoring programs with fancy websites, a great sales team, and a terrible product.

Educators, especially in an immature market without provider capacity, will move slower. It will take time for educators to become entrepreneurs, to take risks, to iterate their way into creating education products that can work under the new policy regime.

My strong prediction is that over the long-term educators will create incredibly innovative methods of schooling that can harness the flexibility of Education Savings Accounts.

But if they lose the race to charlatans, they might never have the chance to create these products: public backlash could kill the program; consumer stickiness could make it very difficult to recapture market share; weak information could make it difficult to distinguish between good and mediocre products.


Another way to think about Education Savings Account is that they pit consumer irrationality versus government inefficiency.

I’ve had many, many conversations with parents about education and they are often very wrong about issues where there is a strong research base that points in one direction.

I’ve also witnessed many, many school districts that make incredibly poor decisions about resources, time, and instruction.

In the short-term, there is no Nirvana here. This is, in part, why I’ve been drawn to charters: they allow for both educational expertise (charter founders) and choice (families selecting schools).

However, charters are still a tightly regulated and narrowly defined educational vehicle, and I understand their limitations.

This is why I’m excited about Education Savings Accounts.

Over time, I’m fairly confident that families will become better consumers faster than government monopolies will become excellent providers of education.

But you’re fooling yourself if you think either side is starting from a great place.


To summarize the above: regulate your deregulation.

Nevada has a chance to be a part moving our nation forward by creating the educational sector of the future.

But they need to get the early years right.

9 thoughts on “What Happens in Vegas Stays in Vegas – or Not?

  1. Tim

    “I’ve had many, many conversations with parents about education and they are often very wrong about issues where there is a strong research base that points in one direction.”

    I’d be interested to hear some examples of this. Apart from the basic safety and hygiene stuff, the research can be tortured into supporting almost any approach, from Sudbury to drill and kill. Isn’t giving the people what they want essential to choice?

      1. LJM

        Or vice versa. Also, “learning styles” is a very simplistic way of pointing out the demonstrable fact that different kids learn different things in different ways and at different times. And “testing” is a great mechanism for the kids who respond well to it. But it’s only one way to assess progress, and a fairly limited one, at that.

    1. cardiffkook

      My first thought is that the worst case Charlatans will try to duplicate what Chicago Public Schools forces on hundreds of thousand of kids. Seriously, I think doing nothing might be better than what the largest school districts are doing currently (at twice this expense).

  2. matthewladner


    I largely agree with your take- especially on the prevention of financial fraud-which inevitably needs a robust system of account oversight, auditing and criminal sanctions. This however is not the only form of accountability. One of the most interesting things that happened when Arizona passed the first ESA program was that the parents formed a listserv to compare notes on vendors and to give/seek advice. One of the fascinating things about the era we are living in is just that sort of thing- bottom up forms of accountability.

    So for instance, websites like Urban Spoon may be doing far more to hold dining establishments accountable than city health inspectors alone. Uber started as a wild experiment, but the routine rating of drivers by riders and riders by drivers keeps creates a wonderful level of feedback and transparency. Greatschools has a level of parental web traffic that would put any state department of education website to shame, and at least in my state, also has school ratings far more accurate than those provided by the state-urban spoon strikes again?

    I don’t mean to suggest that this function can be done entirely in a decentralized fashion, just that we are in a learning process regarding different techniques. The danger you point to however is very real so the hope is to find institutions that prevent fraud but without crushing innovation in the process.

    1. nkingsl

      Hey Matt – good to hear from you. I think a lot of the bottom up stuff will happen, but in my mind the analogy is more around medicine than restaurants. We have a fairly open supply market in medicine, and it’s still very difficult to get good information on providers…. I do hope education will be more transparent given that testing makes it easier to quantify quality at some basic level…

      1. matthewladner

        Yep-Mike McShane has been writing about research that shows that parent reviews can make a grade and a half level difference on an A-F grading scales in parent perceptions, which is very interesting. This just reinforces that Great Schools is way out in front of state systems, but of course like the RealClear/Drudge relationship with traditional media, Greatschools itself would be much diminished without standardized testing.

        We live in interesting times.

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