Course Choice Rather Than School Choice
How public education can evolve from vertically integrated monopolies to regulated marketplaces for learning
Abstract: This article revisits and extends an essay first written nearly a decade ago arguing for course choice rather than school choice. It examines where this idea has already been implemented in states such as Florida, Utah, and Colorado, and outlines federal, tax, and philanthropic policies that could accelerate adoption. The core proposal is that public schools should remain the community platform while accredited providers compete to offer individual courses.
Competition in the Education Industry was republished on Economic Memos in December 2025, although the original version was written nearly a decade earlier. The essay applies industrial organization theory to education reform and argues that the central problem in public education is not a lack of competition per se, but the fact that competition has been introduced at the wrong level.
The essay critiques charter schools and broad voucher programs because they attempt to create competition between entire schools. That approach duplicates buildings, transportation systems, administrators, and support staff—functions characterized by substantial economies of scale. In many communities, especially rural areas, the local school is effectively a natural monopoly. Creating multiple competing institutions in such environments can weaken all providers rather than improve outcomes.
The essay proposes an alternative model in which schools function as regulated platforms rather than vertically integrated monopolies. The central policy recommendation can be summarized in a simple phrase: course choice rather than school choice. The school district would continue to provide facilities, transportation, counseling, meals, and extracurricular activities, but students could choose among competing providers for individual courses such as mathematics, physics, foreign languages, or computer science.
The proposed structure is analogous to the one created by the reform of the electric utility industry. Utilities continue to operate the grid, while customers may purchase electricity from competing generators.
In education, the school remains the platform, while instruction becomes a contestable service. Although no state or country has fully reorganized K–12 education into a complete marketplace for individual courses, several jurisdictions have implemented important elements of this model.
In Colorado, Florida, Utah, and Louisiana, students may enroll in approved outside courses while remaining enrolled in their local public schools. In these programs, public funding follows the course, so families generally pay nothing when they choose from the state’s approved list of providers. If a parent prefers that a student take physics from a former NASA engineer rather than the school’s regular physics teacher, the course can be publicly funded if that instructor or organization has been approved by the state or district.
Minnesota’s Postsecondary Enrollment Options program applies the same principle to college coursework. High school students may take courses at colleges and universities at public expense, with no tuition cost to the family.
New Zealand’s Te Kura and Australia’s distance education systems also provide publicly funded access to specialized courses for students who remain enrolled in local schools, particularly in rural and remote communities.
These examples are broadly consistent with the model proposed in this essay, which also contemplates state or district vetting of outside providers. The goal is not an unregulated market in which any instructor automatically qualifies for public funding. Rather, approved providers would need to satisfy standards relating to subject-matter expertise, curriculum quality, student outcomes, and financial integrity. Once approved, these providers would be eligible to compete for student enrollments.
These systems demonstrate that the school-as-platform model is operationally feasible and that course-level competition can be introduced without requiring families to pay twice for education.
The most important barriers in states that have not adopted this model are political. Teachers’ unions and other stakeholders often oppose reforms that could shift students and funding away from traditional classroom assignments. Many policymakers are also reluctant to alter a familiar system when the benefits, while potentially large, are not immediate.
In states that have adopted elements of this approach, the main obstacles are administrative rather than ideological. Funding formulas must allow money to follow individual courses, accountability rules must define who is responsible for outcomes, and districts need systems for scheduling, transcripts, and quality control. These practical challenges slow implementation, but they are fundamentally management issues rather than conceptual flaws in the model.
The federal government could accelerate adoption while preserving local control.
One useful tool would be competitive grants administered by the U.S. Department of Education. States could receive funding to build course marketplaces, modern transcript systems, and interoperable student records that allow students to combine instruction from multiple providers.
Congress could also provide greater flexibility in Title I and other federal education programs. A portion of these funds could be used to purchase approved outside courses for disadvantaged students, giving low-income families access to specialized instruction that is often available only to wealthier households.
Rural education initiatives could help small districts aggregate demand and jointly contract for advanced mathematics, science, language, and career courses. This would be particularly valuable in areas where staffing shortages make it difficult to offer a full curriculum.
The federal government could support the development of common accreditation and data standards so that credits earned from outside providers transfer seamlessly across districts and states. National standards would reduce administrative barriers and increase confidence in course quality.
Research and demonstration projects could identify which course-level competition models most effectively improve student achievement and expand access. Rigorous evaluation would help states distinguish successful approaches from those that do not deliver meaningful benefits.
Continued investment in broadband and educational technology would make it easier for students in underserved communities to access specialized instruction from remote providers.
The federal scholarship tax credit enacted in 2025 may provide an additional mechanism for expanding course-level competition. Beginning in 2027, participating states may authorize Scholarship Granting Organizations to award scholarships to eligible K–12 students for a broad range of educational expenses. Because public school students are eligible, these funds could potentially be used to purchase accredited supplemental courses while students remain enrolled in their local schools. Congress or the Treasury Department could strengthen this connection by clarifying that approved single-course instruction is an eligible expense.
This modification or clarification of the federal scholarship credit is consistent with the argument developed in the original essay: subsidizing individual courses is likely to be more economically efficient than subsidizing the cost of transferring an entire student to a different school.
Private philanthropy could reinforce this model by subsidizing approved courses in areas where the social return is especially high, including mathematics, science, computer programming, engineering, and foreign languages. Foundations, corporations, and individual donors could provide scholarships or endowments that allow students to enroll in accredited supplemental courses at little or no cost.
A philanthropist interested in expanding the number of future engineers, scientists, or multilingual professionals might achieve greater impact by financing thousands of targeted course enrollments than by funding the construction of new institutions. Because the school remains the platform and only the instructional component is subsidized, these investments could leverage the existing public education infrastructure and deliver a high return per dollar spent.
Conclusion
The central insight of Competition in the Education Industry is that education should be reorganized in much the same way as other infrastructure industries. Schools should continue to provide the essential platform—buildings, transportation, counseling, and community -- while instruction becomes a competitive service delivered by diverse providers.
Rather than dismantling neighborhood schools, reform would open them to a broader educational marketplace. This approach preserves local institutions while introducing competition where it matters most: the delivery of learning itself. The future of educational competition lies not in school choice, but in course choice.