Study Calls for New Approach to School Financing

At a time when the mood on Capitol Hill is to slash spending on everything, some education and finance specialists are calling for a new approach to shoring up the nation’s deteriorating school facilities that would rely on strong accountability measures to attract investors.

In a study from the American Enterprise Institute’s Future of American Education Project released Monday, finance expert Himanshu Kothari says public-private partnerships can be “a promising avenue for tapping the resources needed to address capital needs.”

But first, Kothari writes in “Facilities Financing: Monetizing Education's Untapped Resource,” policymakers will have to change how facilities are financed and come up with more innovative approaches “to create the space” for private investors to get involved.

Specifically, he says educators will have to be held accountable for academic and financial performance, regulations limiting the reach of charter and other nontraditional schools will have to be changed, and school officials will have to be allowed to pursue nontraditional financing options to keep their facilities up to date.

With a strong shift toward more private investment in facilities’ building and management, Kothari continues, schools would be able to divert funds to other programs, including teacher salaries.

“This reallocation of funding will help reduce the achievement gap, recruit and retain teachers, and provide additional support to special education institutions,” he says.