In this recent article, market analyst Peter Yastrow warned that America is not only heading for a double-dip recession, but is “on the verge of a great, great depression.” Others have forecast similar bad news over the past several months. The consensus is that America’s economic growth engines, including the tech sector and housing market, are no longer providing dependable momentum for the economy.

The downturn hit the private sector first and hardest, but clearly now it has migrated to public sector budgets as well. (See “Budget Cuts to Darken SoCal Street Lights,” “Budget Cuts Force City to Stop Buying Toilet Paper.”)

In terms of the education sector, one of the worst things politicians can do now is lock down school budgets with rules that prohibit administrators from responding creatively to opportunities to get the job done with less money. Instead, this era of scarcity requires a political shift in the direction of innovative thinking, particularly with regard to the issue of money portability—the ability to shift cash and resources in more flexible, responsive ways. Such portability could include the following:

States need new policies that unbundle per-pupil spending. They need a funding mechanism that pays providers by the course, so that students can take courses outside their traditional schools. Consider a student who wants to take an advanced placement course that her traditional high school does not offer, nor will it offer any time soon. If funding follows the student to the course level, that student could enroll in an online school for the advanced course while continuing to take other courses and extracurriculars at the physical school.

In the same vein, money needs to be able to flow across school, district, and state boundaries.  Modern communication media mean that teachers and learning no longer need to be tethered to a building, or state or country for that matter. There’s a happy paradox in the news that even as some schools languish with underfunded buildings, dismal cafeteria food, and underpaid teachers, the students in those buildings are seeing the revitalization of opportunity, including improved access to masterful teachers, unlimited courses of study, and more engaging, game-like learning—all, in theory, for less cost than the old system. How heartening that in a time of scaling back, education is actually leaping forward with innovation that can reach even the most rural and urban students.

Money portability means that schools have breathing room to shift around their resources. Teachers need to be able to teach in multiple locations at once over a digital platform without being restrained by geographically based certification restrictions or payment caps. Districts need to be able to use their instructional materials budgets for digital content and Internet devices, if that expense provides more and fresher content for a lower cost, when amortized over its useful life. Students need to be released from seat-time requirements and instead earn credits based on mastery to allow for faster advancement in some cases. They need choice of providers, so that money goes to whoever delivers best. Of course, all of these ideas for relaxing inputs need to come with tighter accountability measures to ensure specific, demanding outcomes.

Money portability is a policy priority because it empowers schools to harness innovation. Good innovation can justify optimism in an era that some dismiss as hopelessly stalled. Money portability is a crucial step to allowing the public sector to navigate the recession.


  • Heather Staker
    Heather Staker

    Heather Staker is an adjunct fellow at the Christensen Institute, specializing in K–12 student-centered teaching and blended learning. She is the co-author of "Blended" and "The Blended Workbook." She is the founder and president of Ready to Blend, and has authored six BloomBoard micro-credentials for the “Foundations of Blended Learning” educator micro-endorsement.