School Vouchers for Better Education

-Labisha Uprety

This article was originally published in The Himalayan Times on 11 October 2015.

Education, a fundamental right, has always been commonly perceived as a good that demands complete state provision. This notion, however, has been time and again challenged by the failing state of public schools, particularly in economically and politically unstable nations like Nepal. In 2015, only 33.18 per cent students who appeared for SLC examinations from public (community) schools were able to achieve pass marks or higher, compared to 89.30 per cent of students who passed from private (institutional) schools.

Considering the fact that the government spends most of its resources on public education, these numbers beg that we revisit our public education system and devise a better system that does justice to the amount of resources being spent on it.

Fundamental learning

Admittedly, there were almost three-fold more students appearing for these exams from community schools as compared to institutional ones. However, increasing enrollment rates in private schools, particularly low-cost private schools even by the economically challenged, speak of better confidence of parents in institutional schools. We see that private schools follow one fundamental rule because of which accountability is sustained; the dependency of these school on direct fees. Because public schools are funded regardless of how many students come in or how many teachers show up, accountability is sorely missing. How can the government then partake in this accountability issuance while still being amongst the primary funders of education? School vouchers could be a possible solution.

Understanding school vouchers

The concept of school vouchers has barely been scratched in Nepal. What are these school vouchers then? In 1955, Nobel Laureate Milton Freidman in his essay ‘The Role of Government in Education’ popularised the concept of school or education vouchers. These vouchers are funded by the government but control over them is exercised by parents. These vouchers usually cover up to a certain percentage of the costs of educating a child in a school system, say about 50 per cent, and the remaining amount is covered by parents or additional private sponsorship.

Voucher accepting schools are usually independent schools that are required to maintain certain standards of minimum common content in curriculum and sanitation measures among other indicators. The use of such vouchers thus greatly reduces the cost of a good private education to parents who are willing but unable to educate their child in such an environment.

A 2009 UNESCO report states that the state spent USD 77 per pupil per year in Nepal. Considering inflation and other economic factors, we could assume that this amount may have risen to USD 100 by 2015. Though a seemingly small amount compared to other nations’ per pupil expenditures, this amount can be redirected to lowcost private schools where tuition fees per month average around Rs 1,500 to Rs 2,000. In this manner, USD 100 can support up to five months of a low-cost private school study. The rest can be paid for by parents via cash or this can be further decreased by institutional scholarships if the child is bright and able. Vouchers can be either universal or targeted. Universal vouchers are vouchers given to each municipality based on number of students attending class whereas targeted vouchers are given to a special class of people, such as the under-privileged.

Why school vouchers?

Why should school vouchers be a seriously considered option? To start with, it shall mean better resource allocation whereby states fund students directly rather than pouring money into dismal public schools year after year. This gives parents and students more choices as to where they would like to pursue an education. The state can thus educate more children with lesser per pupil spending when it looks to covering less than 100 per cent education cost of low-to-medium income families, and it can still reserve the right to provide for 100 per cent for the poorest sections of society while allowing them control over where they would spend that money. A direct transfer of money for goods thus ensures accountability and better motivated teachers, as they will no longer be able to rely on a perennial income regardless of their performance.

A beautiful aspect of the school voucher system is that schools engaging in this shall have to be able to retain a certain percentage of students every year to stay open; if they are unable to do so, they may close or perhaps transfer ownership. Existing schools could choose to undergo certain legal amendments to establish themselves as voucher accepting schools, or additionally, a new breed of schools could crop up for the demand.

With the end of the Education For All initiative in 2015 and the subsequent failure of the School Sector Reform Plan (SSRP) that aimed to achieve a 70 per cent plus national SLC pass percentage by 2014, the nation is in an abject need of a better education plan. School vouchers, which ensure accountability and control by students — who are of course the most important actors in deciding their own future — could become an imperative application to improve overall literacy in Nepal.


Labisha Uprety is Communications and Research Assistant at Samriddhi, the Prosperity Foundation.