	Background

Privately funded school voucher programs got their start in 1991 when an  Indianapolis businessman founded a local program that provided tuition  assistance to about 750 low-income students in grades kindergarten  through 8 (K-8). Programs Shared Characteristics and Challenges, but Varied in Size and Voucher Amounts

The privately funded voucher programs we reviewed had a number of  common characteristics, including several long-term challenges, but they  varied widely in the dollar amounts of the vouchers they awarded and  number of students served. Most programs collected only the information they  needed to determine student eligibility and administer the programs, such  as family income and number of siblings. Looking to the future,  program officials said voucher programs face two major challenges— specifically, sustaining programs for the long term and retaining students in  the programs. Some programs we contacted have begun developing ways  to address these challenges. Many  programs have established separate lotteries for private and public school  students. Information on the students or families who receive privately funded  vouchers is limited, as is information on the private schools the students  attend. In general,  researchers found that African American students in New York City who  used vouchers to attend private schools exhibited more substantial  improvements on test scores in math and reading than African American  students in the comparison group. These studies have also found that  the parents of voucher users in all programs were consistently more  satisfied with their children’s education, regardless of ethnic group. The studies of privately funded voucher programs in New York; Dayton;  and Washington, D.C., found that the parents of voucher users reported less  disruption in their children’s schools compared to the parents of control  group students.
What GAO Found

Privately funded voucher programs are a new development in the nation's experiment with school vouchers. These programs, started in the early 1990s, provide low-income families with private, nongovernmental tuition assistance at private schools for kindergarten through grade 12. Although private schools have long offered various forms of financial assistance, many of these privately funded voucher programs are different from traditional scholarship efforts in two key respects: they are open to any applicant solely on the basis of family income level, and recipients are free to decide which schools their children should attend. The 78 privately funded voucher programs GAO reviewed shared numerous characteristics and faced common challenges, but the programs varied widely in the dollar amount of the vouchers awarded and the number of students receiving them. The average voucher amount in school year 2001-2002 ranged widely among programs, from $600 to $2,000 per student, and program size ranged from as few as four students to over 3,000 students. Beyond the information needed to determine eligibility and conduct financial oversight, most programs reported collecting little data about participating students, their families, or the schools they attended. Program officials said that voucher programs face two major challenges--sustaining programs for the long term and retaining students in the programs. Some programs have begun developing ways to address these challenges. Rigorous evaluations of privately funded voucher programs in New York, Dayton, and Washington, D.C., provided some evidence that African Americans students who used vouchers to attend private schools showed greater improvements in math and reading than students in the comparison group and have also found that the parents of voucher users of all racial and ethnic groups were consistently more satisfied with their children's education than parents of comparison group students.