The State of Educational Choice

Andrew Clark, president of yes. every kid., joined me to discuss the current landscape of educational choice in the United States. The conversation delved into the rise of Education Savings Accounts (ESAs), specifically their widespread adoption and impact on public schooling and education spending. Clark shared insights from his experiences as a lobbyist and argued for the popularity of universal ESAs and the importance of ensuring their successful implementation. The discussion also touched upon accountability within the schooling system, potential pitfalls, and the importance of empowering families to make educational choices.

Michael Horn

Welcome to the Future of Education. I'm Michael Horn. And you're joining the show where we are dedicated to creating a world in which all individuals can build their passions, fulfill their potential and live a life of purpose as they define it. And to help us think through what that looks like and how we get there, I'm delighted that we have Andrew Clark. He's the president of yes. every kid. We'll learn more about that and their vision for how we advanced truly this learner-centered future in this conversation ahead. But first, Andrew, great to see you. Thanks for being here.

Andrew Clark

Thanks. Thanks for having me.

Michael Horn

Yeah, no, you bet. So, like, before we dive in, right. And talk about the work you do, just like think it'll help folks to understand the journey you've taken into this conversation around educational choice, specifically working in education along with the work of what, yes. every kid. does, which of course, it's a 501c4 organization. You don't see those quite as often in education. We see a lot of C3s, so we'll dive into that in a moment. But your purpose really is unleashing the extraordinary potential of every kid by treating them with dignity, empowering them to make decisions for themselves and give voice to every parent, student and teacher who shares that goal. So love to hear your journey into that work and what that work itself looks like.

Andrew Clark

Yeah, of course. So, yeah, 501c4 is a lobbying organization and I am a lobbyist by nature. I'm not an education guy at all. And I like to say education came looking for me. I didn't go looking for it. But the way that that happened is I was working in Arizona, working on state budget issues, and at the time, ESAs were being hotly debated. So there was a small ESA program in the state, one of the very first that have ever passed, in fact, the first. And the debate over the expansion of that program had people thinking it was going to go to the ballot and be a big fight.

Andrew Clark

And so people were asking if we'd be willing to fund that initiative. And I just didn't know a lot about education. And so we started doing a lot of research to see if that was worth getting engaged on because the implications of education spending are significant on state budgets, as you know. And in doing that, what shocked me is when you put together what I'd consider, the more classically Democratic arguments about education and the more classical Republican arguments, the public essentially rejected both arguments pretty soundly.

Michael Horn

Say more.

Andrew Clark

Yeah. So, you know, the traditional argument from Democrats has essentially been public schools are grounded in the community. They just need more money. Right. And if I can just have more money, they'll be fine. And you know, public's great with investing in public education, but they don't think that's the end all be all and they don't think that things can go unchanged. Whereas the Republican argument was essentially like, hey, public schools are terrible and they just need a whole lot of competition. That competition is going to force excellence and test scores and that's what we want.

And the public is dubious on test scores and they don't like the kind of competitive nature of it. Like none of that really resonates either. And so put those two arguments up against each other, there really wasn't any constituency being like, yes, that's what I want.

Michael Horn

Super interesting.

Innovative Policy Strategies Needed

Andrew Clark

To me, that was eye opening going, how do you have a space in which the two competing ideas are both unpopular? As a lobbyist, that's a really weird phenomenon. It just made me say, hey, I think what's going on in this space actually doesn't make any sense. And there's an opening to do something much more innovative and novel that people will actually enjoy. And so that's kind of what led to ultimately starting to run some experiments on different types of policies that we could talk about. But I can give you two examples. One of the things I saw early on is if a program in education was universal versus being low income, it was way more popular with the public, like 35% more popular. And essentially no advocacy group was working on that to the degree that I would have expected. And so I was like, hey, why don't we start working on bills that are universal and just saying, if it's a low income bill, we're just going to reject it.

We're just going to be opposed to it, even though we support more freedom generally. And as you can imagine, for a lot of school choice advocates, that irritated the crap out of people. But I'm like, I'm going to reject your bills. That was novel at the time. And there's a couple other policy areas like that where I just over index to saying like, why don't we just do things that people like and that make good economic sense and good educational sense? And let's just bank on the fact that if people see benefit in it, they're going to vote for it, they're going to re-elect people that do that and that's going to have a more transformational effect than advocating for something people don't want. Which sounds intuitive, but it was relatively novel at the time. And that ultimately led to me working with some other people and together we all created yes. every kid. And that's what we do. We just lobby for laws like that and try to get them in place.

Michael Horn

Super interesting. And you do the work beyond Arizona now it's nationwide, right?

Andrew Clark

Absolutely. Yep. We work in about 36 states right now.

Michael Horn

Yeah. And I guess the reason it's counterintuitive, as I would think about it, is a lot of folks might say like, yeah, we agree, you know, universal may be the goal or yes, that's going to make it more popular, but we have a win right now. We can impact this population, let's go for it. And they accuse you, I guess, of being against incrementalism toward that goal or something like that.

Andrew Clark

That's certainly my reputation in the space. I would argue everything we're doing is incremental. It's just a question of where you're going to draw those lines and what you're going after. And I think education is particularly influenced by this rise of Taylorism, which is this philosophical backdrop to the industrial revolution that basically said people, people don't matter, processes are what matter and we can optimize processes and everything just becomes a top down exercise. I think the people that go into education carry that mentality or that culture into the space. And that's true whether you're on the programmatic side, you know, you're trying to actually put schools together, or if you're on the advocacy side, you think I'm going to do this thing because academics think it's wise or think tanks thinks it's wise. And I'm going to impose that. Whereas in most spaces that are bottom up, you go the other way.

You're like, what do people see benefits in? What are customers going to gravitate to? And you design around that bottom up feature that just there's just not a lot of people that have that ethos in education.

Michael Horn

Space, from a job speed on landscape through my work that I hear the logic there for sure. So one of the big things that you all have been working on and pushing, you mentioned it briefly, these ESAs, education savings accounts, this notion not just of school choice, but educational choice more broadly. It's something that my audience is certainly familiar with. We've talked a lot about it in the show, so. But I think, you know, 2025, we're having this interview, beginning of the year. Where are we nationally on ESAs? What's the state of choice? I think there's like 11 states maybe with universal choice. But is that right? Who are they? What does that even mean?

Andrew Clark

Yeah, I would say the world is transformed in my view anyways. So the original thesis for a lot of this is hey, we've got a very again Taylor top down education center today where the government says in law you as a family will put your kid in the public school or we will send you to jail. And then inside of that school we're going to dictate how the day goes for you. And it's all very carefully orchestrated. And what we said at the time when we started back in 2018, 2019 was we just need a way out, just an exit, a right of exit to go try something else. So if that system doesn't work for you, no problem, let's get out. And that was the, a lot of the premise for these original universal ESA accounts, which is now up to a dozen states.

Michael Horn

A dozen states. Okay.

School Choice Programs Surge Nationwide

Andrew Clark

Yeah. And I would say, you know, you've got about 40% of kids in America that have access to some kind of private school choice program. This is booming. It's not just happening in legislative, it's also having huge political impacts. Like the idea is very popular, it's 75, 80% popular. And so when opposition has come out and tried to take people out in Texas or Arizona or Iowa or Arkansas, what has happened is the people have advocated for school choice, have won and won by pretty wide margins and then that just encourages the next group to go after it. And so now it's kind of sweeping. I think it's not crazy to think you're going to have 18 or 20 states that have school choice programs by the end of this session and you could have 60, 65% of kids in the country having access to private schools through these programs.

Michael Horn

And so it's public dollars. Yeah, yeah.

Andrew Clark

With subsidized dollars. Yeah, it's a pretty massive change in the country.

Michael Horn

And so if we hit 18 or more by the end of the year, I assume you're thinking like Texas, Tennessee, like states like that are the ones that tip next. I'd love to hear your crystal ball on that. But are we talking about educational savings accounts specifically in all these states universal, or are we talking about different forms of tax scholarships or vouchers? Like where are they landing in this choice landscape as we're seeing this sweep of legislation?

Andrew Clark

Yeah, so certainly Texas is going to be the point of contention for everybody just because they've got north of 5 million kids and the entire country has 55 million kids. So you're talking about a significant portion of the total student body population in the United States is grounded in Texas and it's one of the few states that's still growing. Almost everybody else is on the decline. So the fight for Texas will be significant. I think the macro trends you're talking about is most states are still going for ESAs, which in policy terms just means I'm going to take a subsidy, I'm going to put it in a government controlled account, I'm going to create a bunch of rules around that account and then a family can come in and dictate where the money gets spent out of that. So most states are still needing to do that. But you're starting to see this, what I would consider the next wave coming out, which is these personal tax credits, which is just basically saying if you don't take your kid and put them in a public school, if you decide to do something else, we're just going to give you your money back.

And so Oklahoma already has this in law. I think you'll see this in several other states emerging this cycle, maybe three or four of them, where they're just literally like any other, tax credit, child care tax credit, child tax credit, et cetera. They're just going to give you your money back and you'll have the freedom to spend that however you will. So I don't think it'll be nearly as much money as you see in an ESA. It might be 3 or $5,000 as opposed to 7 to $10,000 in an ESA, but it will have significantly more regulatory freedom.

Michael Horn

Interesting. So essentially we're saying you do not avail yourself of the public school. Sure, people without kids don't either, but this is a way of giving you some of that money back so you can make a different choice with your child. Is that essentially the theory?

Andrew Clark

That's exactly the logic, yep.

Michael Horn

Okay, so I want to come back to some of these strands in a little bit, but I want to know in particular, there were three states where at the ballot box it seemed like there were some pretty big defeats of choice in terms of referendums, namely Kentucky, Nebraska and Colorado. What happened in those three states, because my impression, I'll lay out my priors, was what yours is that like, yes, this is a red state phenomenon for the most part, but, but it seems incredibly bipartisan support for it within those States, people of all stripes seem to really like the Education Savings Accounts in particular. So like what happened in those three states, because of that referendum. A lot of the stuff you've talked about has been policy at the state house level.

Andrew Clark

Yeah. So I'd say strategically there's two big inflections in policy design choices that have huge impacts on the the way that the public perceives them. So one is this question of who is eligible, Is it going to be eligible for every kid in the state or is it just going to be eligible for some kids? If it's eligible for every kid, it is about 30 percentage points higher than if it's just some kids. And some kids could be low income kids, special needs kids, it could just be an overall cap, whatever. But the difference in political popularity is massive on that one line alone. And the second part of it is if it's just a private school choice option, people are way less inclined to be supportive of it as opposed to if it is agnostic to whatever works for the kid. So an ESA is designed to say, look, if you want to put your kid in public school part time and private school part time and tutoring a little bit, and we don't care, you pick whatever you want. That's a very popular idea.

People want all the options. They don't want to be pigeonholed into just private schools. That's not a very popular option. And so the mistake that I think a lot of these very well intentioned advocates have made is they think, man, if I just go put a $10 million program on the ballot, which is the Nebraska proposal, that's going to be fine because it's not going to scare anybody. And who would oppose $10 million? It's so small. But what happens is teachers unions aren't idiots, right? They're going to go after a small threat just as hard as they're going to go after a big threat. And if they go after a small threat that's not very popular, that small threat's going to die. And so if we could rewind the clock, I'd love to sit down with the advocates doing that and saying, hey folks, there's no reason to walk in with an idea that's 30% popular just because you think it's good.

Talk to the customer, the customer wants everybody to be eligible. $10 million isn't going to get that job done. Go bigger, actually be more ambitious. And what you'll find is when the public's with you, then you'll actually win at the ballot. So I think in all three states we go through it, but they all three made that mistake essentially in crafting policy that wasn't politically savvy.

Michael Horn

And so the big, just to reiterate what you just said, the big issues universal, not for some. And two, it sounds like a voucher that is like essentially a ticket to a private school and that is your only choice. That is not popular either. People want a more expansive set of I get to direct my kids' education and including public options that you know, ideally, and we heard this in Florida, they start innovating, right? The public options as they start to see different ways to structure education as well through these different funding mechanisms over time.

Andrew Clark

What the parents are upset about is they want control. It's not that they want a different tax status for the school. That is not right.

Michael Horn

If it's the private first, public is not what's driving this. I want control. Okay, all right, let's flip to implementation. That's a good gateway into this because you are not just advocating, as I understand it, for policy, you're also advocating around implementation as well and thinking about this. And there's a lot of debates about how ESAs are put into place specifically. The first one is maybe where it lives and how we manage it. Are we using, you know, a third party technology like Odyssey or something like that to help distribute funds step up for students? Is the Department of Education trying to stand up something? How do you think about the where it lives and how we manage it, how we disperse funds, et cetera questions?

Andrew Clark

Yeah, I think on the first step you're right that most advocacy groups come into legislation, they're like, I have a big idea. And they give the big idea to politicians. The politician puts the big idea into a law and the law just says here, here's the big idea. Give people money essentially, right? And then they give it to a department who's like what the hell are you talking about? What am I supposed to do with this? And at that point most of the advocacy groups are gone. What we try to do that is different is we want to stick around and say, hey, here's what the intent was, here's the thinking behind it and here's how you could actually apply that. And I think that's really important to carry that through line all the way down because the passing the bill is just the very baby steps. All the real work happens after that. And there's a moment for choosing in the aftermath there on what are these going to look like in practice? And I'll just give you maybe two mental models to think about what this could look like.

One way that this could play out is going to be like health insurance. So if you think about the way that health insurance works in health care, those companies, those third party companies are basically tasked to ration your healthcare. They're there to think through like what's the appropriate use of the healthcare system and how do I make it as cost efficient as I can and safe. So that's one option. I'll give you another design option which would be like Social Security where we're trying to eradicate senior poverty and we just send people a check and we say this is for you to take care of yourself, I wish you the best. Right? These are two very different approaches. They're both welfare programs, but very different policy designs and ESAs are going to run into that. Those kinds of choices.

ESA Decision: Customer or Third Party?

Andrew Clark

Are we going to make it more like a health insurance model or we're going to make it more like Social Security? So when we say we're trying to empower parents, both could empower parents. But one model, there's going to be a decision maker that's a third party. And then the other model, the decision maker is going to be the customer, the end user, which one are ESA's going to decide? And for us we have a very clear point of view which is the customer ought to make the decision. That doesn't mean there's no regulations. It's pretty reasonable that any public funds given are going to have some regulations. But there is a very binary choice between who the actual decision maker is. Is it going to be the government or a third party or is it going to be the customer? We think it ought to be the customer. Most people in the space think it ought to be the third party.

And I think that's a very bad idea. You just look at how popular health insurance companies are, right? I mean you just watch the poor CEO got shot and half the country cheered. I think that tells you just how unpopular that idea is. But I think that is a very real possibility of where education's headed to if we don't head this off.

Michael Horn

So let's play that out on a few things. I had never thought about that mental model with ESAs because I think of it as fundamentally a consumer powered choice, more akin to say a health savings account than a health insurance plan. But it's interesting when you frame it that way. So some of the downstream decisions of that, I guess in the health insurance model would be restrictions around what you can spend on, restrictions on pricing perhaps of the schools and things of that nature. Just sort of play that out. What are the implications where you see that taking hold based on what some people are advocating for and how you would do it instead?

Andrew Clark

Yeah, I think health savings accounts are probably like if I give you the two extreme wings there between Social Security and health insurance. Yeah, Health savings accounts are probably somewhere in the middle ground and maybe probably more tilted towards the customers. So I think they're a fine model. Right. If I go see a chiropractor, I can pay with my HSA and I don't have to get that pre approved. I might have to submit it afterwards and maybe the HSA company would reject it. There's some rules around it, but for the most part I can pay for pretty wide latitude of whatever I want to. That is different than like if I go see a doctor with my insurance company, they're going to call Blue Cross, Blue Shield or United or whoever and say, can this person get this treatment? And if the answer is no, they're going to say no.

Right. Like, doesn't matter what you and your doctor negotiate out, that insurance company is going to make the decision. And that's the way most of these ESA programs are working right now is I say, okay, I want to buy, you know, Bob's textbook. If the department hasn't pre approved that purchase and or Class Wallet or Step up hasn't pre approved that purchase, you're not going to be able to buy that book. I think that's the bad model and the one that we're running the risk of slipping into. We want to be much more in the HSA mold where it's like, hey, I can buy textbooks, that's what's approved. And then as a consumer, it doesn't really matter what textbook I buy, as long as it's a textbook, we're all okay with the fact that that's on the net, that's going to be a positive for society.

Michael Horn

So it's interesting you say that because I've seen accreditation pop up as a requirement in some of these programs, which I have to be super honest, has like shocked me on a number of levels. And maybe that's speaking toward that is like, okay, if it's accredited, we say that's pre approved and therefore you're good no matter what. If not accredited, we're going to have to have another conversation. Is that.

Andrew Clark

Absolutely. And this is where, you know, most people who advocate for ESAs and other kinds of freedom are really, really offended when they get attacked by critics who say, like, oh, this is going to raise prices and send in grifters and cronyism, I actually welcome the criticism, like, bring it on, because it keeps us clear on where the risks are and they're not wrong about the risks. So the risk is you get somebody who comes grifting along. Let's say you have a textbook company, they're going to say, man, only my textbook should be approved. Those guys, textbooks that's full of crazy garbly gook and kids will learn God knows what. So you got to make sure you only approve my books and not their books. Right? And that's. This is just classic government. You can only buy my therapies, not theirs.

You can only buy my tutoring service. You got to make sure that my employees are approved, not their employees. That's just what happens when you get a regulatory environment is you get regulatory capture. People want to make their business not providing customers some benefit. They want to make their money by getting the government to get rid of their competition. And so one of the reasons that you want to try to make sure you don't have that is think of the higher ed space that you've talked a lot about. Higher ed space does that exact problem. They say, like, you can't create an alternative.

You know, the folks at the University of Austin, people are all excited about that. That's unaccredited right now. You can't use your 529 or your Pell or any of that public subsidy money to go to that school. And why isn't it accredited? It's got some of the best professors in the country, maybe in the world, working there. Why isn't it? Because they've made it a 5 to 10 year process to get accredited. Well, what happens? That means no competition can come into the space. That means higher education goes sky high all the time and it never stops. There's no incentive to bring it down. The same thing will happen in K12 if we allow the same kind of regulatory barriers to exist.

If it's hard to come in and sell a textbook, well, then the existing textbook guys are just going to jack the prices up. It's going to be really hard to get in. So this is kind of why these debates matter so much, is if we want to get to a world that is low price, high quality, happy customers, you have to give people freedom to come in and enter the market and freedom to buy in the market really easily. And most of the advocates and lobbyists in the space they're being paid to try to capture the market for some regulatory space. And so both politicians and just normal people have to be outspoken, loud advocates for the ideas of freedom and markets or education is going to stifle and do what it's always done historically in this country, which is it's going to get captured by the special interest.

Michael Horn

Just to play that out. The counterargument I suppose would be, well, if we don't have lists, we're going to get, you know, hacks and frauds coming in and taking dollars. And I think I'm going to anticipate your argument back would be like, well, we have some of that anyway and it's going to be discovered a lot faster if individuals can make these choices than we're hoping that government somehow discovers it. Right. Because in some ways that's a feature, not a bug actually of more choice. Am I anticipating the debate correctly?

Andrew Clark

Yep, you got it. I mean, this is, you could think of it in Milton Friedman's vernacular. Right. When it's, when it's me spending someone else's money, I'm much more prone to spend it maliciously than if it's me spending my money. Right. And so depending on how you think about it, if it's you spending the government's money, your incentive is to spend as much of it as fast as you can. And, you could be relatively reckless. If you're spending your own money, you're going to guard it very carefully.

Most people, most families want what's best for their kids and they're going to make hard trade off decisions. I think that's one of my favorite things about your job to be done research. It's showing, it's illustrating the trade offs. Right. That's what we want people to do. Yeah. And that's again why you want the market dynamics to flow.

So yeah, public schools spend money on all sorts of crazy things. Margarita Rosa at Georgetown has essentially made a career out of the crazy things people have bought inside of public schools. You're not going to get rid of waste fodder abuse, but you can put in reasonable mechanisms without corrupting the market.

Flexible Spending with Educational Savings Accounts

Michael Horn

And so that's, I mean, in my mind that's been the, one of the biggest arguments for ESAs is it really is putting money in a wallet that is yours and you don't have to spend it all in one year. You can save it over time. And so that doesn't introduce, it doesn't just introduce the notion of choice. It also introduces the notion of value and trade offs as opposed to a voucher, which is like a ticket for one thing, regardless of economic value and, and doesn't have those trade offs and choices and fractionalization and value assessments that an individual might make. Let's go on, just to stay on this though, on what you can spend on. Do you think there should be categories of things or like how do you, you know, where do you draw the line or, or no line. Right. Because you know, I obviously we've seen the headlines, equine therapy and you're like, actually it's a really important thing for some families and kids, so probably a really good thing.

And by the way, you know, schools send their kids to field trips to Disney World and stuff like that. So like where is the line and where isn't the line in your view?

Andrew Clark

Yeah, and I, my personal view is the best case is like the child tax credit that we saw issued during COVID There were a list of uses for that. They were pretty broad and you know, the IRS reserved the right to come in and audit and make sure you spent the money on your child. Makes sense. Pretty reasonable. Didn't prohibit anybody from doing what they wanted to do for the most part. But it also made sure that if there was fraud that the government had a mechanism to come in and enforce it.

Michael Horn

Come back in and unfold it. Okay.

Andrew Clark

That's the best case scenario.

Michael Horn

Got it. Okay, so let me ask this question which is a lot of these ESAs, even the ones that are universal, meaning access to it is open, they're not fully funded, as in that there's a line item, as I understand it, that could cover every single person in the state and it is double funded in many cases in the sense that there's an account for the public schools and then there is also an ESA. That introduces an interesting sort of case of rationing or choices around who do you market this to first perhaps you can't foreclose people, but maybe you can if there's waiting lists, like how do you navigate that focus, access, set of questions in these environments? And maybe I just named the corollary up front, which is like at what point do we say, okay, the dual sort of funding structure was really important so we don't, you know, get their ire up front. But at some point like there it has to be replicative of, you know, what was there. How do you, how do you think about that?

Andrew Clark

No, I think, I think the original strategy we had of let's just give people an exit was a good one for its time. I think the problem is if you leave that old system in place, exactly what you're saying is happening. One, you would hope that the money, you know, that was 15 or $20,000 in the public school system would now be the 7,000 in the ESA. And we would say, great, the government has now saved $13,000 and it's a win win and everyone's happy. But what happens in reality, we've created a lot of dependency in the current system. They don't let go of a dime and then it becomes additive. So that's a problem for the government in terms of its overall spending, but it's also a problem for the market because what happens is you get New York City spending $40,000 a kid, what do they do? They just start spending money on every crazy thing you've ever imagined in human history, regardless of whether it makes sense or not. And people begin to expect that level of service even if it doesn't make sense.

So it's like, why does this school have a climbing wall? And why does it have a restaurant? Why does it have crazy things? I have the money and if I don't use it, I lose it, so I've got to keep spending it. Well then what happens is when an alternative comes up and says, hey, I'm gonna now give your kid a better education at a significantly lower cost, they're like, yeah, but where's the cool climbing wall? Right, right. And so now the expectation level for service gets higher. So the promise of like bringing the cost down, which then increase access for everybody, it starts to diminish because the service expectations are higher, which is a little, a little bit wonky. But it's to say that if we don't get the, the existing public school system transformed as well into a place where it has to care about what families want and be responsive to what families want, the promise of this idea to transform education, it's not going to deliver. And so I think the next big wave is we have to go back to public schools and say, hey, it's time for you to also come back to a system like esas where parents are going to decide, do I give you all $15,000 or do I peel a thousand of that off and go use it for a tutorial when you don't meet my needs? I think we need to, we must get the definition of public schools redefined from the public system owns and operates the dollars and the families comply to a system where the families own the dollars and the school meets their needs. And if we can do that, all sorts of good cascading effects will happen. And if we don't do that, I think we'll stall out again.

Michael Horn

Also interesting off that right. Is this notion of overserved and that is critical to disruptive innovation. And one of my arguments around why we can't disrupt schools at the present, you know, traditional system in the United States is there's no non consumption and there's very little sense of overserved. But it's my argument about why have ESAs have emerged, I actually think some of the most well off families that are like, you know, I don't need the 10, you know, English as second language instructors and the football team and the this and that. Like I just want this, this, this, this, this boom. Thank you very much. I'm great. And that's sort of where the disruption will really start I think if we're going to really see a revolution of how education, learning, schooling occurs in this country.

Andrew Clark

Yeah. And maybe if I just double click on that because you and I do the same research methodology which is this jobs to be done. And we asked the people who have left the public school system, why did you leave? And almost universally what they say is I just wanted basic life skills. Like I just want to be able to do math and read and just, you know, some fundamentals: wash their clothes, pay bills, like the easy stuff. And so what they go and search for in the market usually costs about $5,000 a year. So they're leaving a free service that costs $15,000 a year to go to a paid service for 5,000. But they're doing it because they want less, which is really remarkable to watch. So I'm with you.

I actually think we probably in a space where 65, 70% of the current offering in a public school, people don't actually want to buy. And if they were given the choice, they wouldn't buy. Which is a pretty fascinating intellectual thing to get to doodle through.

Michael Horn

No, I think that's exactly right. I mean look, it's the classic case why iPhone, new iPhone sales are slowing down and spreading out. People are like, I don't need the extra whatever gimmick. I'll hang on for another year to my phone. Right, exactly. So, let me go to this, which is accountability. I think it's implicit in a lot of what you said. But it seems to be another place where there's a lot of opinions on both sides of this.

And on the one hand you sort of say, actually the quote unquote accountability of no child left behind, etc. Etc. was more transparency, perhaps less accountability because not clear always what happened out of that. There were some punishments attached to it, but for the most part there were ways to ward them off. This is perhaps true accountability, goes the argument, because families say, you're not serving me, I can leave, I'm going to move to another option. And I have control over that. Whether it's mid year, mid month, end of the year, right? So much faster cycle times. The flip side of it says, sure, but these are public dollars and we want some sort of layer of are kids actually learning how to read? Are they actually learning how to do math? Things of that nature.

And so we want some minimum set of baseline assessments, maybe, perhaps they could be more growth based, but we want some sort of public mechanism still in place. How do you think about this question? What do you see happening?

Andrew Clark

So I think the way you framed it up I would vigorously agree with, which is we don't have accountability today in public schools, we have transparency at best. And we could go through a litany of examples. But Chicago, Baltimore, New York, you know what you see is enrollments dropping wildly, right? Like people are just straight up walking away from public schools and on these standardized test scores, you've got tons and tons of schools, just Google it. Chicago proficiency rates. You'll be like, wow, there's 30 schools where not one kid is proficient in English or reading or English and math. And then you'll be like, great, so what happened, you know, the next year nothing changes, right? Year after year the behavior stays the same, but as they lose kids, their pure pupil dollar amount goes up. So if anything, they're almost getting more money for, for not changing at all, for being resistant.

That is not accountability. That is again, at best, that's transparency. But it's not actually changing anything. So I'm with you. The idea that somebody could actually then say, like, if you're not helping me, I'm going to go somewhere where I can be helped and my money's going with me. That's actual accountability. That has teeth to it. So I think that if you value accountability, and I certainly do, that's the accountability you want.

The standardized test score isn't going to get you there. Now that said, I do think, look, reading is good, math is good, right? And if you're investing in this as a taxpayer, you want to have visibility into it. I think when you mandate testing on every single kid, it's not useful for parents, they don't want it, they're not asking for it, they wouldn't buy it. That's not a great way to do it. I think the way that we do it with NAEP, which is just this randomized group of voluntary participants, makes way more sense because then you get visibility into what's going on without anybody being forced and without teachers trying to optimize to the test. So I think that's the kind of thing we should do. And you could do it across a broad range of things, micro schools, private schools, whatever. It's voluntary.

You can get much more transparency, much more visibility into where kids are actually learning and where they're performing without anybody being forced into anything. So if I were the state, I would invest money into a NAEP style system, if not NAEP entirely itself, to try to get that visibility without coercing people.

Michael Horn

It'd be interesting. I hadn't thought about this before, but one of the challenges is, I understand it that NAEP faces is frankly budgetary, it's all from the federal government. But if the state were to say, hey, we're going to contribute X amount in because we want, you know, to leverage the sampling mechanism and this well regarded assessment that's already structured, but do it every single year, say, or you know, maybe that's a way to get the funding up to be able to do something like that. And then I imagine this is a question though, but I imagine your second statement would be like, and some parents probably do want assessments to know, hey, how's my kid doing against on this or that or whatever else. And so they could pay for, or they could choose schools that administer. And then I guess the question is what becomes public or not in those choices. I'm curious your take.

Andrew Clark

Yeah, as you know, the philanthropy community gets really obsessed on this idea of navigation where they're like, we're going to tell people what they want and we're going to tell them what good and bad is. And when you ask people like would you pay for any of the services that government or philanthropy suggests? And the answer is always no. So it's like, would you pay for this testing service the way that we do it today? The answer is almost, yeah, uniformly no. So what I would do is say, hey, in your ESA or voucher, tax credit, whatever you're designing, testing is one of the things you can pay for in whatever you want. And then you, as a family, you decide what's actually creating value. And that way, you know, if it's a Google review Or a Yelp review or it's a standardized test or it's whatever, I don't care. Right. You as an entrepreneur, come up with whatever feedback mechanism you think families will be like, yes, that's going to help me decide where to put my kid and why and whether they're succeeding.

Great, go out and sell that. Is that worth $20? Is that worth 200? Is that worth 2,000? Right. Let's find out what the value of that is. And that way we actually start getting real products and services that families value and use as opposed to the ones philanthropy or government's value that nobody finds value in and nobody uses and we just hemorrhage crazy amounts of money on for no particular reason other than making people irritated except for academics who love it.

Michael Horn

Well, it occurs to me as if certain places write in provisions and policy around navigation requiring a coach or something like that to help advise. Frankly, like the AI tools that are coming out right now that are going to know your situation are going to make that so cheap and easy and to say nothing of social trust and so forth, that if they're, if those policies are not written at an extremely sort of like outcome level as opposed to process level, they're going to be outdated within days, right.

Andrew Clark

Yeah. I think this is the overarching argument I'd make is Taylorism. I'll give it a lot of crap, but I actually think it was great. The industrial revolution was awesome. It made things super cheap. But it's made for machines and people are not machines. And so when you're dealing with the people business, let the machines do the machine thing. But if you're trying to say, what's the right coach for my kid? There's no process to tell you what the right coach is.

It's you sitting across the table from the coach having a conversation saying, is this person going to love my kid? Are they going to resonate with each other? Are they going to understand each other? Is this relationship of trust? There's nothing that you can do to replace that kind of just authentic relationship that goes back and forth. And s I think you're not going to design a law that says, hey, let's optimize for that. The only thing you're going to do is empower people and let them make their own decisions. And that's why, you know, freedom almost always beats some kind of top down control.

Michael Horn

And presumably someone could pay for that navigation or counseling or whatever else.

Andrew Clark

100%.

Michael Horn

Okay, last question as we wrap up here. This has been a pretty wide ranging question, or conversation rather on how these things should look in practice. I'm curious, are there other implementation questions on the ground that you think are not getting enough attention or are really sort of bubbling up right now that we haven't talked about that we ought to focus on as we wrap up this conversation?

Andrew Clark

Yeah, I would bucket the implementation thing kind of three waves. There's the how do you sign up for it? Which sounds really stupid, but there's a million debates on like, how do you sign up for these programs? And kind of who gets qualified and then which time period. We could nerd out on all of those. But this is one of the reasons why we advocate for universal, not just for because it's good policy and good politics, but because it's good implementation. So if it's a low income program, you have to go ask people, how much money do you make? Please submit all your form forms. And then somebody has to process. It takes forever. Whereas if it's universal, it's just, are you a person who lives in the state? Great, you're approved.

Streamlining Government Program Enrollment

Andrew Clark

Off we go. But there's a ton of fights on the how do you sign up for? So I think it should just be easy to sign up for. It should take seconds, right? Verifying your taxpayer should be stupid simple. The second one is easy to use, which is where I think we spent most of our time talking here, is like, how do you use these darn things once you're approved? And then the third part that is there is in an ideal world, people should love these programs. It's free money. Who doesn't love free money? Right? Like, I think there's all sorts of good arguments against free money, but if you're gonna do it, it should at least be enjoyable. The fact that we torture people is kind of crazy, but there's almost no feedback mechanism to see if anyone cares, because nobody cares about the family in government, which blows my mind. So one of the big arguments is, hey, you actually need to circle back with the family and say, was this experience enjoyable? Did it meet your needs? Right.

Jobs to be done? Was your job hired for? If yes, cool, we're probably doing something right. If no, where did we break it? Let's go back and fix it. And until we can get that kind of feedback loop going and get incentives aligned, it's going to be hard for these programs to work in practice.

Michael Horn

All right, I lied. I want to stay on that last one for a moment because one of my arguments to folks like Joe Connor and other entrepreneurs in the space, building systems to help with the disbursement of dollars is that as they move up market. Right. Part of the feature set that they probably will have to have is some of those feedback mechanisms, as well as, frankly, navigation supports, because they'll sort of become. I hate the Yelp analogy, but I'm going to use it for a moment, like sort of the Yelp, like, marketplace, if you will, for me, helping to figure out or find things that I might not even know about otherwise. That's my own opinion of how they might evolve naturally. I don't think there needs to be policy to do it. I just think it's part of the feature set.

But I'm curious, is that how you're thinking about this, or do you have other ideas in mind?

Andrew Clark

No, I think if a marketplace is allowed to thrive and it's out. What you see in these early days anyways, of school choice is people start by saying, I don't even know what my options are. I've always been told what to do. So they just default to essentially a private school, or what you'd think of as a bundled solution. It has all your products and services in one place. And then as they get more comfortable, they're like, I really want to do math over here and I'd like to do athletics over there. And they start to unbundle. They start to pull off services and go to different places and different vendors for them.

And so somebody who's been in a program for two, three, four years looks very different than somebody who's there the first time. But my expectation is just like, you know, when we transitioned from cable companies to Apple tv, it got annoying really fast. You're like, my God, I'm tired of having 32 subscriptions. I just have one again. Yeah. So what happens is you start to rebundle. And my guess is you're going to, you know, any.

Any good market has this process of bundling and unbundling, and that's what drives innovation at its core. But I expect you to see we've had 100 years of a tightly bundled system. Now we're just starting to have the first two or three years of unbundling. But the natural evolution of economics would tell you it's going to rebundle. So somebody's going to say, hey, you just tell me what your kid is like and I'm going to come back to you with suggestions. And you just, you pay me and I'll take care of transportation, I'll take care of everything. And you know, you might end up paying a premium for that service, but it might be really worthwhile.

And then somebody will get irritated and break that model and we'll just turn and turn and turn until, you know, the experience and education is the greatest thing that none of us have ever imagined, which is the way that that all again, all human experience goes.

Future of Customized Service Bundles

Michael Horn

We should wrap up there. But I will say I think it's a really good point and that rebundling will be around different spools, if you will, from the current one, which will be the real magic. And to your point, figuring out the right mix and sort of services and so forth and trade offs that individuals will make saying like, well, it's still not 100% but nothing in life is. It just reduced the friction of me having to make every single choice. It's a lot of work picking all the summer camps as parents we have to do. So if there's a couple bundles from which I can choose and the more it can be customized around, you know, this is my circumstances, my kid, all the better, right?

Andrew Clark

Absolutely. That's what we all want. We all want an EZ Bake Oven. That is also exactly the way we want it. Right?

Michael Horn

Well, with that is the final word. Andrew, thank you so much for joining us. This has been a fun conversation. I've learned a lot and just appreciate the work you're doing.

Andrew Clark

Of course I appreciate the work you're doing. It's excellent.

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