Report Calls for Competing Race to the Top Plan to Save States Money

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INDIANAPOLIS – As many as 630,000 students nationwide could earn passport scholarships to attend the school of their choice under a new plan for Race to the Top that could save state budgets $5 billion over five years, according to a new study released Monday.

The report, written by economist Brian Gottlob, suggests that the federal government divert $4 billion of remaining stimulus funds – equal to the current RTTT dollars – to a school choice program for all 50 states to offer scholarships for children in grades K-12. Gottlob is a senior fellow with The Foundation for Educational Choice, the legacy foundation of Milton and Rose Friedman.


According to Gottlob’s study “School Passports: Making the Stimulus Pay Off for Students and State Budgets,” once awarded a lump sum grant, states would then decide how many scholarships to distribute, under what formula, and for how long. The money would last up to five years if scholarships of $2,000 to $2,250 were awarded in each state. As a result, the 50 states would save $1 to $1.6 billion annually with most savings occurring once states continue the program on their own, based on Gottlob’s analysis.

“This would be an opportunity for the largest voucher program ever and certainly would bring immediate education relief to students,” said Robert Enlow, President and CEO of The Foundation for Educational Choice. “It gives states seed money to kick off their own programs. And even a short-term voucher program would bring pressure on public schools to improve not to mention give children the school choice options their parents crave.”

Gottlob added: “What would catch the eye of lawmakers would be the savings for state budgets, particularly in such tough economic times.”

The report said the new approach would have a more immediate impact than the current RTTT approach. “With the largest portion of stimulus education funding effectively functioning as a ‘bail out’ of state education finance systems and school districts, many who saw the stimulus as a historic opportunity to generate educational reforms are now expressing disappointment,” Gottlob wrote in his report.

Among the 12 largest states where there would be scholarship grants, the annual budget savings would range from $24.3 million in Georgia to $166.1 million in California.

Please visit our website to read the full study at

Submitted by the Foundation for Educational Choice, a 501(c)(3) nonprofit and nonpartisan organization, solely dedicated to advancing Milton and Rose Friedman’s vision of school choice for all children. First established as the Milton and Rose D. Friedman Foundation in 1996, the foundation continues to promote school choice as the most effective and equitable way to improve the quality of K-12 education in America. The foundation is dedicated to research, education, and promotion of the vital issues and implications related to choice and competition in K-12 education.