A perceived barrier to homeschooling for some families is that one or both parents must work outside the home. ESAs alone simply do not provide enough money for a parent to stay home to homeschool. ESA dollars would not spread as far as private dollars because of the price inflation that captive markets produce.
One example of how government money infused into a captive market inflates pricing would be Pell Grants, which were created to increase government loans to college students. Back in 1987, then-Secretary of Education William Bennett put forth what is now known as the Bennett Hypothesis, which stated that “… increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.”
Plainly, Bennett was predicting that as the “free money” poured into higher education, schools would raise their tuition to use up the available money. Students who had “free money” to pay for tuition wouldn’t balk or protest the cost increases like they would have if they’d needed to use their own money to pay the bill, as they had in the past.
That is exactly what happened. In 2015 a study confirmed, “We find that institutions that were most exposed to these maximums ahead of the policy changes experienced disproportionate tuition increases around these changes, with effects of changes in institution-specific program maximums of Pell Grant, subsidized loan, and unsubsidized loan of about 40, 60, and 15 cents on the dollar, respectively.”
The increases in “free money” didn’t help lower-income families have greater access to a college degree, either. The authors of Dollars, Cents, and Nonsense: The Harmful Effects of Federal Student Aid (Richard Vedder, Christopher Denhart, and Joseph Hartge of The Center For College Affordability and Productivity), summarize, “After reviewing the various federal programs that evolved to assist college students, we conclude that they have largely failed. For example, the proportion of lower-income recent college graduates is lower than when these programs were in their infancy. The programs are complex and Byzantine, leading to forms such as the FAFSA (Free Application for Federal Student Aid), whose very complexity has reduced participation by low-income students. The law of unintended consequences has reared its ugly head.”
Once again, the law of unintended consequences is ready to rear its ugly head through the introduction of ESA funds. As has happened with college education, middle and low-income families will be squeezed out of private school and homeschool participation due to the inflated prices that will result from the infusion of government cash.