Education entrepreneur spotlight: Nate Fellman and The Harkness House (part I)

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Editor’s note: Since the COVID-19 pandemic, educational entrepreneurship has boomed nationwide. New Hampshire has experienced significant growth in the number of entrepreneurs and innovators willing to take on the daunting challenge of building a new educational ecosystem. This year, we’ll be highlighting some of the people and organizations that have begun expanding the education marketplace in the Granite State, as well as the obstacles they face in creating nontraditional learning environments.

Our first installment highlights The Harkness House, a middle school in Nashua for families seeking a nontraditional experience that offers small classrooms and student autonomy. 

With an emphasis on smaller class sizes and putting students in charge of their own learning, The Harkness House in Nashua focuses on providing a top-flight education to middle schoolers. Nathan (Nate) Fellman and his founding educators, Stacey Baker and Jean Demers, built it all themselves.

A former eighth-grade language arts teacher and middle-school assistant principal in the Bedford School District, Fellman’s story as an education entrepreneur began with one main catalyst: COVID-19.

Amid all the negative educational consequences brought by the pandemic, Fellman found one silver lining. “We did see during the pandemic one positive thing, and that was…smaller class sizes,” he said. 

In August 2021, Bedford started split sessions at the middle school, dropping class sizes in half to around 13 students each in response to the pandemic. The results were eye-opening for Fellman. 

“When we had those small classes and everything was turned on its head and you really got to know kids…and you really got to understand what they were interested in, you saw kids come alive who would’ve flown under the radar, and really participate.” 

Fellman knew he couldn’t go back to teaching “the same old way.” So he left public education, determined to create an alternative learning environment for families seeking something different.  

Brainstorming what would eventually become The Harkness House, Fellman knew one thing for certain: “The biggest thing for me was a commitment to small class sizes.” 

This commitment to small classes drew homeschool parents like Carrie Hyde to The Harkness House. 

“For our three children, I think they really want to connect with other students their age, and that’s our biggest draw towards [The Harkness House], too, is that they’re only sixth through ninth grade,” Hyde said. “It gives our kids an opportunity to make connections with other students their age.”

Fellman also had a model in mind. The name “Harkness” comes from Philip Exeter Academy’s Harkness model: “Twelve students and one teacher sit around an oval table and discuss the subject at hand.”

This model of instruction—kids engaging in dialogue with each other and the teacher, rather than being lectured—was key to Fellman’s idea.

“This is how adults solve problems,” Fellman said. “They come to a room, they sit around a table, they look each other in the eyes, and they collaborate in this way.”

To make this idea a reality, Fellman had to jump through the necessary regulatory hoops. Although he personally found that the state approval process was not particularly daunting, he gathered that he was the exception.

“We hosted an educational entrepreneurs meeting here with a lot of people trying to start things up, and they were just overwhelmed and daunted because it’s a big application. There are a lot of laws,” he said. “And that I could see being very daunting.”

The minimum requirements for the approval of nonpublic schools are set by statute in the N.H. Code of Administrative Rules. The state Education Department offers guidance and application forms online. 

The most significant cost for Fellman was securing a space, renovating it, and getting it up to code. But because his 8,000-square-foot space had previously housed a school, he didn’t run into the usual zoning nightmare that many aspiring entrepreneurs face. Obtaining approval to operate a school where none existed before can be a serious obstacle. 

“In talking to people in the field and doing what we’re trying to do, there are a lot of zoning issues,” he observed. 

From local ordinances that prohibit people from offering educational services on their property to regulations that were written before the advent of alternative educational methods, a web of rules complicates the task of education innovation.

After securing final approval in August 2022, The Harkness House found its target audience. An education provider focused on making middle-school-aged kids engaged, autonomous, and owners of their learning resonated with one group in particular: the home-education community. 

“We went in there and they were engaged with Nate, the kids each had questions, and the way that he doesn’t talk down to them, he talks directly with them, he wants their input, and that they genuinely want to know what they want to learn,” Hyde observed.

In October 2022, The Harkness House launched by developing courses for home-education families. The school offers a la carte classes, as well as two-day and four-day programs for homeschool students. 

Starting with just one student, the school grew to 16 by the end of the academic year. 

“Every single one of our kids that started with us increased their participation with us,” Fellman said. In fact, eight kids who began as homeschool students are returning to The Harkness House in the upcoming school year on a full-time basis. This will be the school’s first full-time cohort. 

Among them will be Stella Kritikou’s three daughters. Enrolled in public schools prior to the pandemic, Kritikou knows she’s found the best fit for her kids. “Now that they’ve been there for almost a year, it’s actually great for them because having that small class has helped them be able to work with other peers in small settings,” she said.

Fellman’s goal for this fall is to enroll 16 full-time kids and 24 home-education students.

Full-time tuition is $14,900, while two-day and four-day programs are $3,100 and just over $5,000, respectively. “Around 50% of our kids are accessing EFA [Education Freedom Account] or ETC [Education Tax Credit] programs through the Children’s Scholarship Fund, which are so helpful for those families,” Fellman noted. 

Fellman hopes to further reduce his cost of tuition and make The Harkness House self-sustaining “by, in some fashion, using the service of education…to develop a product that then can be sold to a broader market.” His goal is to eventually film some of his classes and sell the tapes to home-education families (with consent, of course).

Long-term, Fellman’s goal is to fill his space with the 100 students it can hold. Class sizes would be capped at 12 kids each, and they would continue developing the curriculum in partnership with parents and students like they’ve always done.

“We’ll be involved a lot. We’ll be asking questions. We want to know what they’re learning,” Hyde said. “And they’re really good because before they go ahead and watch a movie or before they teach them something, they let us know what they’re doing, so they keep us on the same page. We’re not falling between the cracks.”

Keeping kids from falling through the cracks is a primary goal for Fellman. And that involves engaging students directly in their learning.

“Instead of that 100% top-down, [we’re] really saying, ‘What’s the 20% that every kid needs to know, be able to do?’ and giving the kids a voice at the table for that 80% on how we’re going to get there and what they want to engage in beyond that,” Fellman said. 

With that in mind, The Harkness House focuses on language arts, math, social studies, and science, while accepting maximum input from the students to develop their electives. 

“Nate’s very open, like as soon as he sits with the kids he asks them, ‘What do you guys want to do? Is this something you’re interested in?’” Kritikou noted. “He leaves it to them, and that’s great because usually these kids don’t get that kind of opportunity in public school.”

From courses like mythology and exploring media bias to the logic of coding, electives are based on student interest. “It allows us to be much more streamlined and do some things, and the core things, really, really well,” Fellman observed.

In this way, the school puts students in charge of their learning. Whether it’s allowing the students the freedom to choose which texts they read for language arts, taking a “virtual road trip” to learn about miles per gallon, gas prices, and budgeting, or turning one of the classrooms into a greenhouse to teach gardening, The Harkness House tackles the core subjects through this hands-on approach, bringing out the best in their students. 

“I think what [Fellman] does is he sees what the kids like, he knows what they have to learn, and he incorporates that into what it is they like, so they learn without realizing they’re actually learning,” Kritikou’s mother, Sofia Kretikos, added.

Student autonomy like this is made possible because of the small, individualized classes that define a school like The Harkness House, making it easier for educators to meet the different educational needs of each child.

“Why I recommend the school to everyone is they really give the opportunity for the children to learn in their own way,” Kritikou said. “It’s not something that’s forced on them; they get to choose,” adding that “some kids don’t learn with just reading a book.”

Through innovation and ingenuity, Nate Fellman and The Harkness House aim to make education more responsive to families and students by offering a nontraditional, highly adaptable, and individualized option. Harkness parents say it’s working. 

“Watching my 10-year-old granddaughter say, ‘I love to go to school’—she doesn’t want to miss a day—that to me was exciting because I’ve never seen a child that excited to get to school,” Kretikos observed, “and it’s all the way that he’s teaching.”

For evidence of customer satisfaction, Fellman offered an assessment from one of his students: “I feel like I’m learning, but I don’t feel like it’s school.”

The Harkness House, located in Nashua, can be found online at https://www.theharknesshouse.org/.

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From microschools to co-ops, entrepreneurs are creating new educational options in New Hampshire

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School closures during the COVID-19 pandemic led to a surge in education entrepreneurship across the United States. Large declines in student performance (see here and here) both during and following the pandemic, along with increasingly bitter disputes over school content and policies, are sending still more parents in search of alternatives. 

In New Hampshire, public school enrollment has fallen by more than 10,000 students since 2019. That’s in addition to a decline of 29,946 students from 2001–2019. During that same 2001–2019 period, spending on district public schools in New Hampshire rose by $1.5 billion, or $937 million when adjusted for inflation. 

As public school leaders in New Hampshire and elsewhere work on improving outcomes and making educational systems more responsive to families, some parents continue to seek alternatives for either the short-term or long-term. 

Whether to make up for learning losses, or to find a better fit for their children, many families are searching for something different than traditional schooling. 

In New Hampshire, as around the country, education entrepreneurs are meeting this demand in what is now a growing educational marketplace by creating nontraditional learning environments for students. 

Education entrepreneurship embraces a bottom-up, decentralized approach to schooling. The Live Free or Die state is home to a wide and growing range of educational alternatives offered by scrappy startups, frustrated parents, former public school teachers, and even national businesses.

In addition to private schools, which have to be approved by the state, a mix of new, private-sector alternatives are popping up in New Hampshire. They fall into the following broad categories: microschools, learning pods, homeschool co-ops/learning centers, and hybrid homeschools.

Here is how each of these alternatives differs from the others and from traditional educational offerings.

Microschools

A microschool is the “catch-all” term for learning alternatives offered on a small scale and in a more traditional school style. It describes a full-time or part-time learning environment characterized by small classrooms that enable an individualized approach to education.

Think of a modern version of a one-room schoolhouse, with an emphasis on student-led and project-based learning.

Often seen as a middle ground between homeschooling and traditional schooling, microschools typically include more than two participating families who are not homeschooling. They usually hold 10 to 50 students, but they can be larger or smaller. They are typically led by hired instructors and are often set in commercial spaces or community centers.

If organized as a small private school, a microschool would be subject to state approval and regulation. In 2021, in response to pandemic-created demand, the state Education Department published a primer on how to start a nonpublic school, which lays out the laws and regulations that govern nonpublic schools in the state. 

Not all educational alternatives, though, are organized as schools. 

Learning pods

Learning pods usually consist of a smaller group of students (typically 10 or fewer) gathering together with some form of adult oversight to learn and socialize. 

Pods are often created by families in a neighborhood or in a location that draws families from throughout a community. They are inherently flexible for the students and parents, gathering in convenient locations—often a participating family’s home—on certain days of the week for agreed-upon amounts of time. They can be led by parents or paid educators. 

Like microschools, they often include more than two participating families who are not homeschooling, but they are less closely aligned with a traditional classroom environment than microschools. 

A learning pod might be classified and regulated as a private “school,” depending on how it is organized and how instruction is offered, though these new entities do not easily fit the standard description of a school. Some learning pods involve homeschooled or pre-school-age children.

Homeschool co-ops/learning centers

Homeschool co-ops and learning centers represent a more decentralized type of educational offering. They are typically formed by groups of families meeting together to achieve common educational goals, but they aren’t necessarily organized as “schools.” 

Typically consisting of more than two participating families who have chosen to homeschool, homeschool co-ops and learning centers often function as homeschool resource centers. They allow homeschooled students to meet on a regular basis and participate in classes and activities led by either the parents themselves, in the case of co-ops, or instructors and activity leaders that the group hires, in the case of learning centers.

Homeschool co-ops and learning centers can be set in a variety of environments, such as participating families’ homes, commercial or community centers, or even outdoors. These include tutoring centers, such as Mathnasium and Sylvan learning centers, and unschools, which allow for almost complete self-directed learning by the students.

Hybrid homeschools

Hybrid homeschools share many of the same qualities as homeschool co-ops and learning centers. Like the latter, they usually have paid instructors.

The main differences are that there’s often a curriculum in place, many are faith-based, and they usually have a yearly program with about two days a week in “class” and the rest of the week spent at home.

Summary

These are the primary options education entrepreneurs have been offering as alternatives to traditional schooling since the COVID-19 pandemic. They share many of the same features, and sometimes their offerings overlap. People often use the terms “learning pods” and “microschools” interchangeably, for example, since they can be very similar in style and structure, though they aren’t always. 

Most education providers are self-identified, as rigid legal definitions don’t exist to classify them. Even within one “category,” the educational options in the marketplace vary considerably in their teaching philosophies, structures, and schedules.

Though these are the general categories of new educational offerings spreading quickly in the marketplace right now, it would be a mistake to assume that others won’t come along. Parents and entrepreneurs are constantly searching for new ways to meet children’s needs. There’s no reason to think they won’t invent even more creative options.



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Educational choice makes small but important gains in 2023

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Legislators have approved two relatively small but significant improvements to New Hampshire’s existing school choice options. 

The 2024–25 state budget increases per-pupil funding for public charter schools, and a separate bill expands eligibility for the Education Freedom Account (EFA) program. Both changes will offer Granite State students more educational options starting this fall.

Charter schools

Because charter schools don’t receive direct subsidies from local property taxpayers, as district public schools do, they receive an additional state grant per pupil on top of the per-pupil adequate education grant. 

The new state budget increases the base adequacy grant for charter school students from $3,561 to $4,100 and the supplemental charter school grant from $3,411 to $4,900, bringing the total per-pupil amount to $9,000—a 29% increase from the 2022–23 budget. The result is about $121.5 million in charter school funding.

New Hampshire charter schools are public schools operated by a nonprofit organization under a state-approved charter. A new national study shows that they can be extremely effective.

Stanford University’s Center for Research on Education Outcomes released a landmark study this month finding that “the typical charter school student in our national sample had reading and math gains that outpaced their peers in the traditional public schools (TPS) they otherwise would have attended.” Black, Hispanic, low-income, and English-language-learner students attending charter schools also posted larger academic gains than did their counterparts who attended traditional public schools.

Charter schools have become a popular option for New Hampshire families seeking an alternative to traditional public schools. Enrollment in charter schools for the 22–23 school year was a record 5,530 in New Hampshire, a 12% increase from 21–22 enrollment and a nearly 164% increase from 13–14 enrollment. 

Charter schools typically supplement their state education grants through private fundraising. The increased state aid will reduce the reliance on outside donations and put the state’s dozens of charter schools on somewhat better financial footing.

Education Freedom Accounts

House Bill 367 expands eligibility for an Education Freedom Account (EFA) from households making no more than 300% of the federal poverty level to households with income at or below 350% of the federal poverty level. That’s a 16.7% increase in income eligibility. 

This expansion increases the EFA eligibility level for a two-person household by $9,860, for a three-person household by $12,430, and for a four-person household by $15,000, providing many additional families with the ability to pursue alternative educational options best-suited to their children’s needs.

For context, a family of four making no more than $105,000 will be eligible to apply for an EFA under the new cap. 

EFAs are government-approved savings accounts that can be used by families to access a wide range of educational opportunities outside of their government-assigned public school district. The funds can be used for tuition at private and public schools, or for other state-approved education expenses, including supplies and tutoring services. 

The student’s per-pupil adequacy dollars ($4,857 on average as of 2022) are put into an Education Freedom Account from which families can draw for approved expenses.

Like charter schools, EFAs have also become increasingly popular since their adoption in the state, with current enrollment around 3,300. About half of those enrolled are students eligible for free or reduced-price meals.

Among those benefiting from expanded eligibility are single parents. Under the original income cap at 300% of the federal poverty level, a single parent making $60,000 a year would not have been eligible for an EFA. Now a single parent making less than $69,020 is eligible under the new income cap.

Expanded EFA eligibility and increased charter school funding offer a smaller advance of market forces into the provision of public educational services than supporters had hoped for this year. But the small gains will make a big difference to those families who now have access to an alternative education for their children. 



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N.H. eyes small expansion of Education Freedom Accounts

Since their adoption in 2021, Education Freedom Accounts (EFAs) have offered new educational opportunities for Granite State families.

An EFA is a government-approved savings account that can be used to access a wide range of educational opportunities outside a family’s designated public school district. If eligible, parents can direct their state funded per-pupil adequate education grant, an amount that averaged $4,857 as of 2022, toward their chosen alternative, provided those alternatives meet the state-set qualifications.

Instead of going directly to a student’s government-assigned public school, the student’s adequate education grant money is deposited into an account from which families can draw to pay for a variety of education-related expenses, including tuition, textbooks, technology, special education services, and more.

To qualify, a student must be a New Hampshire resident eligible to enroll in a public elementary or secondary school. Additionally, the student’s family household income at the time of application for an EFA must be 300% of the federal poverty level or less, as established annually in the Federal Register by the United States Department of Health and Human Services.

School choice supporters had high hopes of expanding EFA eligibility this session. Arkansas, Florida, Iowa, and Utah all passed laws this year to make all K-12 students eligible for an education choice option. Arizona and West Virginia already had universal choice programs.

Several variations of EFA expansion bills were introduced in the Legislature this year, but after May 18, only one option remains.

House Bill 464, which passed the House, would have expanded EFA access by adding a list of eligibility criteria with no family income cap. Those criteria include being homeless, in foster care, in a family of migratory workers, in a military family, learning English as a second language, being persistently bullied or disabled, living within the geographic boundaries of a low-performing or persistently dangerous school, being eligible for free or reduced price meals, or having a documented educational hardship.

The Senate Education Committee voted 5-0 to recommend that the Senate kill HB 464, which it did on May 18. That leaves House Bill 367 as the last option for making EFAs available to more students.

As introduced, HB 367 would have expanded eligibility for an EFA to households making no more than 500% of the federal poverty level.

However, by a vote of 187-184 the House cut the income cap down to 350% of the federal poverty level. This version of HB 367 received a 3-2 “ought to pass” recommendation from the Senate Education Committee, and the Senate passed the bill on a 14-10 vote on May 18. It goes to the Senate Finance Committee next.

Expanding EFA eligibility to 350% of the federal poverty level would increase the eligibility level for a two-person household by $9,860, for a three-person household by $12,430, and for a four-person household by $15,000.

Below are the maximum eligible income levels under both versions of this proposed expansion versus the current eligibility standard.

The bump from 300% to 350% of the federal poverty level represents a 16.6% increase in the EFA income cap. That’s a small bump, especially considering the huge gains made in other states this year. But it’s the only option that remains for New Hampshire in 2023.

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Teacher pay in NH lags the national average despite $1 billion in new spending

Teachers unions and school officials regularly advocate for higher public school spending on the argument that teacher pay is too low. In fact, teacher pay in New Hampshire is relatively low compared to other states. But that’s not a product of low funding levels.

Average public school district spending in the Granite State is is 14.4% above the national average, while our teacher pay is 5.3% below the national average.

What explains that discrepancy? School districts have used huge increases in funding this century primarily to hire new personnel, particularly administrators and support staff, rather than raise teacher pay, even as enrollment sharply declined. 

Our new public school spending study found that real (inflation-adjusted) spending on public school districts rose by $937 million, or 40%, from 2001-2019. Student enrollment fell by 14%, or 29,946 students, during this same time.

On a per-pupil basis, current spending, which excludes debt service and capital expenditures, grew by 74% from 2001-2019, but teacher pay rose by only 12%.

In 2021 (the most recent data available allowing for national comparison), teacher salaries in New Hampshire averaged $59,182 per year, while the national average was 5.3 percent higher at $62,304 per year.

The cost of living in New Hampshire is estimated to be 9.9 percent higher than the national average, which makes the lower teacher salaries in New Hampshire even more noteworthy.

Teacher pay is significantly higher in Massachusetts, even after adjusting for cost of living. Since they do not have as much staffing, Massachusetts public schools are able to pay their teachers higher salaries.  

The raw difference is $82,042 in the Bay State vs. $59,182 in New Hampshire.  Taking into account the cost of living, Massachusetts teachers are paid $7,606 more on average than New Hampshire teachers, a difference of almost 13 percent.

 

 

Massachusetts public schools spend their monies very differently than New Hampshire public schools do.  New Hampshire public schools have more staffing.  New Hampshire public schools have 18.2 full-time equivalent (FTE) staff per 100 students vs. 13.9 per 100 students in Massachusetts public schools.  For a school of 500 students, New Hampshire would have about 21.5 more FTE staff than a school of the same size in the Bay State.

Comparing New Hampshire to the national average, a 500-student school in the Granite State would have 26 more FTE staff, 14 more special needs students, 38 fewer English language learner students and 50 fewer students in poverty than the average school nationwide.

The low teacher pay in New Hampshire relative to the national average is not a result of low spending. Taxpayers have spent $937 million more on public school districts since 2001 above the level needed to keep up with inflation. Spending per-pupil in New Hampshire public school districts was $2,383 (14.4 percent) above the national average in 2019.

Rather, districts have chosen to focus on hiring, even as enrollment has fallen. As a result, average public school district employment levels are well above the national average while teacher compensation is below the national average.

If this discrepancy persists, it will become increasingly challenging for New Hampshire districts to recruit high-quality teachers even as declining enrollments reduce the demand for new teaching positions.

 

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As NH public school district enrollment fell by 30,000 students in 19 years, spending rose by nearly $1 billion

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From 2001-2019, New Hampshire public school districts lost 29,946 students, but increased spending by an inflation-adjusted $937 million, a new Josiah Bartlett Center for Public Policy study has found.

In percentage terms, inflation-adjusted spending rose by 40% while enrollment fell by 14%.

The increase in spending is even more dramatic when capital and debt spending are removed. Current spending (operational spending that excludes capital projects and debt service) increased by 74% from 2001-2019.

On a per-pupil basis, New Hampshire public school spending increased by 66.8%, adjusted for inflation. In nominal dollars, New Hampshire spent $8,245 per student in 2001. That figure reached $18,905 in 2019, representing a 129% increase before accounting for cost of living increases. Adjusting for inflation, the increase was a stunning 66.8%.

The increase was so large that New Hampshire went from being 4% below the national average in per-pupil expenditures in 2001 to 25.7% above the national average in 2019.

A large portion of this increased spending went to hire new staff. While the number of students in New Hampshire district public schools fell by 14%, staffing increased by 15%. (Teacher pay rose by 12%, indicating that the emphasis was on hiring, not raising pay.)

Parents might assume that nearly $1 billion in additional spending above the rate of inflation bought improvements in performance on national metrics. That did not happen. As current spending rose by 74% and staffing levels rose by 15%, New Hampshire’s National Assessment of Educational Progress Reading and Math scores fell by 4 points. Nationally, scores rose by 15 points, which means that New Hampshire fell behind relative to other states despite a massive increase in spending.

The big picture is that during the first two decades of this century New Hampshire spent 40% more to educate 14% fewer students, and those students wound up doing slightly worse in reading and math.  

The massive increase in resources devoted to K-12 public schools was not repeated in other areas of state and local government. From 2001-2019, employment in New Hampshire public schools increased by 3,359 FTE (Full Time Equivalent) employees.  Employment in public colleges and universities increased by 478 FTE employees. All other state and local government added just 332 FTE employees. 

While total spending on district public schools rose by 40% from 2001-2019, the percentages varied by level of government—local, state, and federal.  And inflation was an important factor. 

Total state taxpayer funding to district public schools increased in nominal dollars from about $878 million in 2001 to approximately $1 billion in 2019. However, much of that increase was consumed by inflation. When adjusted for inflation, total state appropriations to district public schools shrank from an inflation-adjusted $1.2 billion in 2001 to $1 billion in 2019—a decline of 17 percent. Most of this decline, 83.9%, is due to declining student enrollments. The remaining 16.1 percent was due to actual increases in state appropriations coming close to, but not quite keeping up with, inflation.

Total local appropriations, adjusted for inflation, doubled, going from $1.09 billion in 2001 to $2.19 billion in 2019. That’s a 101% increase in spending as the number of students served fell by 14%.

Local and federal spending increases per pupil were also large, even when adjusted for inflation. Inflation-adjusted federal spending per student increased by 84%, going from $500 in 2001 to $920 in 2019, and local spending per student increased by 135%, going from $5,223 in 2001 to $12,279 in 2019.

State spending per student, however, was fairly flat during this period, when adjusted for inflation. Inflation-adjusted state spending per student was 3 percent lower in 2019 relative to 2001, a decline from $5,791 to $5,604 by 2019.

The full report, executive summary, and tables can be downloaded below. The tables contain detailed spending numbers for individual school districts. 

Executive Summary: 01-19EdFundingReportExecSummary

Full Report: EducationSpending01-19Report

Appendix Tables: Ed Spending Report District Tables

 

 

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Why no one knows what an adequate education should cost

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The New Hampshire Legislature, in its wisdom, has decreed how much an adequate education costs. It’s right there in statute, RSA 198:40-a. 

Legislators wrote in three concise paragraphs that the cost of an adequate education totals precisely $3,561.27 in 2015 dollars, plus an additional $1,780.63 for students eligible for a free or reduced price meal, $697.77 extra for English language learners, $1,915.86 extra for special education students, and $697.77 extra for third graders who score below proficient in reading. (The statute requires those figures to be adjusted for inflation, which they have been.)

Four school districts, led by Contoocook Valley, have sued the state, claiming that an adequate education actually costs much more than the state provides. Fourteen additional districts have joined the lawsuit. 

When the state Supreme Court trial began on April 10, the attorney for the districts said “there’s no place in the state where an adequate education can be provided for less than $4,000 per student.”

In New Hampshire, public school districts spend, on average, more than $23,000 per student in local, state and federal funds on all expenses, including transportation, construction and interest. On average, 60% of that funding comes from local property taxes and 27% from state adequate education aid, state figures show. 

The large gap between actual spending and the state’s decree forms the basis of this lawsuit.

The state says the cost of a adequate education is whatever the Legislature says it is.

The districts say the cost is determined by how much the districts spend.

Economically, they’re both wrong.

Or more precisely, they’re both using the wrong measure. No one can know the true cost of an adequate education because no market exists to find it. 

There is no functioning K-12 education market in New Hampshire. By law, students are assigned to public schools based on where they live. Spending levels are set by government formulas, not by parents making choices among competing options.

Without a market in which competition spurs innovation and creates efficiencies, there’s no way to know how much an adequate education should cost.  

The districts’ spending levels are a poor measure because each district is its own regional monopoly. The small amount of competition from chartered public schools isn’t enough to trigger the sort of large-scale efficiency gains that drive prices down and productivity up. 

The state’s method of determining costs—legislative debate—also relies on what districts spend in the absence of a competitive market. Legislators looked at what was spent and calculated costs based on that. 

So we have a debate between government entities, each of which thinks it can set prices accurately on its own. Nowhere along the way have consumers been empowered to do what consumers do: improve quality and lower prices. (Case study: Wisconsin.)  

Imagine if grocery stores were provided by government in the same way public schools are. Each community got a government-determined number of stores, and people were assigned to shop at the store closest to their home. The government sent your grocery money directly to the store, not to you. If you wanted to buy from a different store, you could, but the government-provided store got to keep your government-allocated grocery money. What would happen to prices?

At the state Supreme Court, each of these two sides will argue that it has the authoritative method for determining the true cost of an adequate education. But what’s missing is the voice of the consumer.

The truth is that the only authoritative method for discovering the cost of an adequate eduction is the creation of an open and competitive educational marketplace. Government formulas are no substitute for individuals empowered to make their own choices. 

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Why universal school choice would help all N.H. students — and the public schools

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“Healthy market competition is fundamental to a well-functioning U.S. economy. Basic economic theory demonstrates that when firms have to compete for customers, it leads to lower prices, higher quality goods and services, greater variety, and more innovation.”

— Heather Boushey and Helen Knudsen, “The Importance of Competition for the American Economy,” The White House, July 9, 2021

Competition has been central to American life from the beginning. It’s at the core of the American identity. As the Biden administration has stated (in the quote above), competition has proven its public value by stimulating the innovation that improves quality and lowers prices. 

Libraries full of economic research bear this out. As a paper for the Organization for Economic Cooperation and Development put it in 2002: “Competition has pervasive and long-lasting effects on economic performance by affecting economic actors’ incentive structure, by encouraging their innovative activities, and by selecting more efficient ones from less efficient ones over time.”

This applies to all industries, including education. School choice is expanding in state after state because the data show that it works. And it works not just for students who enroll in alternative programs but for those whose families choose traditional public schools as well.

“We find evidence that as public schools are more exposed to private school choice, their students experience increasing benefits as the program scales up,” a 2020 study of Florida’s tax credit scholarships found. “In particular, higher levels of private school choice exposure are associated with lower rates of suspensions and absences, and with higher standardized test scores in reading and in math.”

That’s not a fluke. 

Of 28 studies that have examined the competitive effects of various school choice programs on students who remain in traditional public schools, two found negative effects, one could find no effect, and 25 found positive effects, as EdChoice details in its compilation of school choice studies titled The 123s of School Choice. 

What about educational outcomes, such as graduating from high school or college? No study has found a negative effect, and most have found positive effects. 

For example, a 2019 Urban Institute study of Florida’s tax credit scholarship program, the nation’s largest private school choice program, found that it generated a 12% increase in college attendance.  

The vast majority of research on school choice finds that the introduction of a choice program tends to improve test scores, educational outcomes, parental satisfaction, integration, and civic values and practices — while saving money. 

The financial effects have been studied the most, and their findings aren’t surprising. Of 73 studies of the fiscal effects of school choice programs, five found a net cost increase, four found cost neutrality, and 68 found that the introduction of choice generated cost savings. 

School choice works because the competitive forces unlocked by the creation of a robust marketplace generate the same positive effects in education that they do in other industries. 

“Students attending schools with more competitive pressure made larger gains as program enrollment grew statewide than did students at schools with less market competition,” the authors of the 2020 Florida study wrote.

Because competition has been proven to generate positive outcomes in education, as in other industries, protecting education from competition can only harm students. 

The fastest way to improve outcomes for New Hampshire students is to give them more options. This can be done with a simple change. 

Eligibility for both the Tax Credit Scholarship and the Education Freedom Account programs is capped at 300% of federal poverty level. Removing the income cap and making both programs universally accessible would stimulate innovation, and match more students with their best educational environment, more rapidly than any other reform. 

Were all students to become eligible for both programs, competition would quickly begin to work its magic. There is no faster, more effective way to improve outcomes for all students. 

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Education Entrepreneur Spotlight: Prax Village Homeschool Community

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Editor’s note: Since the COVID-19 pandemic, educational entrepreneurship has boomed nationwide. New Hampshire has experienced significant growth in the number of entrepreneurs and innovators willing to take on the daunting challenge of building a new educational ecosystem. This year, we’ll be highlighting some of the people and organizations that have begun expanding the education marketplace in the Granite State, as well as the obstacles they face in creating non-traditional learning environments. We start with Becky Anderson and Prax Village, a Seacoast community for home-schooling families. We hope you enjoy these profiles and stories of market innovation.

Prax Village: A thriving co-learning community
By Becky Anderson

Prax Village is a community of liberty-minded homeschooling families in the Seacoast region of New Hampshire. After two full years, our current member base includes more than 100 kids of all ages, from about 50 families. But Prax Village looked much different when it was established in the autumn of 2020.

A small group of like-minded families had collectively purchased and, through many volunteer hours and efforts, renovated a private community center that we call the Praxeum. The building and beautiful outdoor space on our property were used for charitable events, meetups, classes, and co-working. The Praxeum’s founders were at different stages in raising our families, yet we found ourselves always returning to a common goal: to form a support network for parents navigating the choice to raise our children outside of the conventional school system, and a strong, trusted social group for our kids as they grew.

In 2020, government-imposed COVID restrictions unceremoniously canceled many of our extracurriculars and homeschool groups, while also closing homeschoolers’ typical gathering places like libraries, museums and indoor playgrounds. Many new and long-time homeschoolers felt displaced and found themselves searching for in-person opportunities. Kids (and parents) really missed interacting with each other in a normal and natural way.

We already had a location, one of the biggest obstacles to overcome, and knew it was the right time to share it with more families, so Prax Village was launched. For an affordable monthly fee, members had just a couple of opportunities per week to meet at the Praxeum, along with seasonal special events. We trusted that this simple start would grow into richer and more robust offerings, and it has.

Through steady and organic growth, Prax Village has become a community that has greatly exceeded our initial expectations and continues to evolve and improve.

Prax Village members include kids from babies to teens, and many types of homeschoolers: brand new and seasoned, religious and secular. A wide array of educational philosophies can be found here. Many members join after moving from other states to New Hampshire for its high quality of life and increased personal freedom. Because we share common principles of liberty and a desire to raise responsible and thoughtful individuals, our members make up a strong and supportive community despite our diversity of educational styles.

Thanks to the enthusiasm and energy of parent volunteers, Prax Village now offers multiple classes and clubs five days a week, with a year-round calendar of 8-week sessions. We owe our success to members’ generosity with their time and knowledge. Over the past year, the schedule has included Spanish, soccer, book club, chess club, LEGO club, multiple art classes, music appreciation and chemistry — and that’s only a partial list!

We aim to cater to a wide variety of interests, from weekly Toddler Time for ages 2-4 with rotating parent leaders to a multi-year academic deep dive into Greek classics for ages 11 and older. Most families come to the Praxeum one, two, or three times a week for the supplemental classes that interest them most, and our 8-week sessions give everyone a chance to try out different things and maintain a flexible schedule.

We have established our own unique set of seasonal traditions — a Valentine Exchange, Freecoast Egg Hunt, Midsummer Potluck, Halloween Trunk or Treat, and Enlightenment: A Winter Solstice Celebration.

Organizers also create fun opportunities around the region exclusively for Prax Village members, like our field trip to the New Hampshire Farm Museum or sailing classes with the Gundalow Company. We have held food drives and toy drives, and seasonal clothing swaps with leftover clothes donated to the Pass Along Project. We are even beginning to see more time carved out for parents to connect and recharge, like Ladies’ Book Club and Anarcraft meetups.

In September, we tried something new and, for one weekend only, we transformed the Praxeum into Prax Museum: A Pop-Up, Hands-On, Kid-Made Science Center. Prax Village members invited friends, family and fellow homeschoolers to explore physics, chemistry, light, electricity and other amazing natural phenomena by interacting with dozens of exhibits and demonstrations. Popular exhibits included the impressive full-room pinhole camera, the Bernoulli blower, colorful shadows, and tricky goggles that turned the world backwards and upside down. Every exhibit was an opportunity to play with science and learn together.

Prax Village differs from the typical homeschooling co-op. We avoid long waitlists and limited enrollment. Because we are able to adjust our programming choices according to size and member demographics, new families can join at any time. We don’t provide core academics, as we understand that the parent is the expert in their children’s unique learning needs.

We aren’t a drop-off program. In part, this decision was made to avoid regulations and licensing, but by including parents in all that we do, we encourage strong friendships to form between whole families rather than only the children. Our large, weekly, unstructured gathering is an important social time for parents and kids alike.

With so many families leaving the public school system in search of other educational options, this is an exciting time for homeschoolers, and New Hampshire is the best place to be! Prax Village is positioned to continue leading the way as a community for liberty-minded homeschoolers in our state. If you would like more information about Prax Village or to become a member, visit https://praxvillage.org.

Becky Anderson is founder of Prax Village Homeschool Community.

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How educational entrepreneurship can create new opportunities for N.H. children

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By Kerry McDonald

Parents in the Granite State and across the country are clamoring for more educational choices, and greater access to those choices, so that they can find the learning environment that is the best fit for their child’s distinct needs and interests. As a longtime New Hampshire homeschooling mom, Kathryn Michelotti has seen the statewide growth of both homeschooling and other, more personalized education options over the past decade. Recognizing this mounting demand, Michelotti and fellow homeschooling mom Sharon Osborne opened Latitude Learning, a homeschool learning center, in Manchester in 2019.

Latitude Learning began as a small learning collaborative with a la carte classes and activities for local homeschoolers, but in the wake of widespread pandemic school closures and remote learning in 2020, Latitude rapidly expanded. The program quickly outgrew its small space and moved to a larger facility in Derry, where Latitude now serves 120 students, ages four to 17, by offering daily classes and clubs.

Seeing the success of Latitude Learning and the continued parent desire for more learning options in New Hampshire, Michelotti and Osborne are planning to scale their program statewide. “We hope to have a few more Latitudes around New Hampshire so more learners can thrive the way our students do,” Michelotti said. “I’d love to see a future where each child is involved in a learning center or school that reaches them, instructs in their individual learning style, and encourages them to develop their strengths and talents while supporting their individuality and promoting personal responsibility.”

This vision recently led Latitude Learning to be recognized as a quarter-finalist for the prestigious Yass Prize that rewards education entrepreneurs across the U.S. who are building innovative learning models. As an acknowledgement of their efforts, and to help further their expansion goals, Latitude Learning won a $100,000 grant this fall from the Yass Foundation.

“To be recognized and even awarded for what we are doing shows that others see we are on the right path,” Michelotti said. “Of course, we already knew this because we can see how happy our students are, but an outside organization like the Yass Foundation for Education’s acknowledgement of our mission is incredibly validating.”

New Hampshire is a national leader in both school choice programs and education entrepreneurship, helping to increase learning options for families. The state’s tax-credit scholarship program and new Education Freedom Accounts (EFA) enable income-eligible families to exit an assigned district school for a private education option that may work better for their child.

Meanwhile, entrepreneurial parents and educators, such as Michelotti and Osborne, are building new learning models and launching new educational programs that broaden the supply of available options. Most of these new educational programs are low-cost, but many of them also participate in the scholarship and EFA programs, enabling greater access.

Latitude Learning, for example, charges $600 for a 16-week semester of one-day-per-week classes, which is less than $40 per day. Families can choose how many days per week to attend. Latitude is also an approved provider for both the New Hampshire EFA program and the tax-credit scholarship program, making it more widely accessible to more families.

Encouraging the proliferation of low-cost, innovative education solutions throughout New Hampshire will enable more families to find and access just the right learning environment for their child. Unfortunately, regulatory hurdles and related bureaucratic barriers can make it difficult for education entrepreneurs to start and scale their small businesses.

For Becky Owens in Chester, trying to offer sporadic homeschool programs on her farm property turned into a regulatory headache that likely would have deterred many other aspiring education entrepreneurs from moving forward. Owens had been homeschooling her own five children for several years, after pulling her oldest son from the local public elementary school because it wasn’t a good fit for her shy, sensitive boy. She wanted a more personalized educational environment for him and her other children that would be responsive to their individual learning needs and styles.

A college professor for 15 years with a Ph.D. in education, Owens decided to create that personalized learning environment, and eventually expand her offerings to other children in her community. In 2020, she decided to host occasional nature hikes on her property for small groups of local homeschoolers. She had a handful of students register for one of her hikes, and she placed a chalkboard sign in front of her house with the words “Farm Rich Nature Hike” so families could find her.

This simple gesture set off a cascade of events involving the local building inspector, who issued her a “cease and desist” letter for her farm walks. Over the subsequent weeks, Owens had to prepare numerous documents for local officials, including an aerial view of her property, and appear before the planning board to ask for permission to operate as a home-based business. She also had a property inspection from the local fire chief, even though her program was held entirely outside. All of this was required just so Owens could welcome a few children to her property for a nature walk. Her walks never exceeded 10 kids.

Eventually, Owens received approval to operate as a home-based business. “As long as I was completely outside, with no more than four cars at a time, and the kids were not being dropped off on the street, then I could continue,” said Owens, who was granted permission to run a home-based residential business but was told any growth would be limited.

“I can’t hire staff because the building inspector said I can’t. If I hire just one person, I am no longer considered a home-based business,” she said.

Owens offers periodic nature hikes, as well as a program called “Pony Pals,” that provides horse-themed interdisciplinary academic work for children once a week for two hours at a time. Additionally, she offers a once a week program for foster kids that focuses on life skills. (Owens and her husband are also foster parents.) Per her home-based business approval, all of these programs are completely outdoors.

In 2021, however, Owens discovered that the fast-growing national microschool network, Prenda, was entering New Hampshire, and that the state was using a portion of its federal COVID relief funds to make Prenda learning pods available tuition-free for New Hampshire families. Owens gravitated to Prenda, appreciating its small, mixed-age model and focus on individualized learning. She signed up as a recognized Prenda guide, able to host these learning pods at her home.

Today, Owens leads two Prenda pods on alternating days and times throughout the week, each with a maximum of 10 children in kindergarten through sixth grade. A few hundred New Hampshire children are enrolled in Prenda pods throughout the state.

As a hired guide for a national microschool network, Owens is able to operate her indoor learning pod program out of her home, but she is barred from running a similar, independent microschool program on her property.

This discrepancy, triggered by local ordinances that often prohibit the creation and expansion of home-based businesses—and especially of education-related businesses—can block home-grown educational solutions in New Hampshire. It can dissuade entrepreneurial educators and parents from offering educational programming that nearby families may want, and it can tilt the scale away from local, entrepreneurial offerings.

“Something needs to be done,” Owens said. “These local roadblocks need to go away.”

Cultivating a low-tax, low-regulation landscape in New Hampshire that encourages small business has long been a priority for Granite State voters. The emergence of a new sector of education entrepreneurship, catalyzed in large part by the state’s growing school choice programs and increasing parent demand for new and different learning options, could be encouraged and accelerated by exempting non-traditional educational offerings from outdated and often irrelevant regulations. Home education is already exempted from state statutes that define education as occurring in “schools.” But today there are many more educational programs in New Hampshire and across the U.S. that don’t fit into the category of “school” or “homeschool,” and often run into regulatory snares as a result.

Providing broad regulatory exemptions for all non-traditional educational organizations in New Hampshire would encourage education innovation and experimentation. Devising this education-focused “regulatory sandbox” could help unleash the supply of more education options for families by prompting entrepreneurial parents and educators to build new and varied learning organizations.

Additionally, modifying local zoning ordinances to allow educational services by default in residential and commercial zones would enable more learning pods, microschools, and similar non-traditional educational models to emerge.

These common regulatory barriers to entry and scale impact education entrepreneurs nationwide, as my new report for State Policy Network describes. They preclude creative education solutions from being invented and extended, and limit the assortment of education options available to families. New Hampshire is well-positioned to lessen the regulatory burden on education entrepreneurs, and encourage the introduction of an array of educational possibilities. Parent demand for more education options continues to grow, and school choice policies such as EFAs and tax-credit scholarships continue to support that demand.

Now, state and local policymakers can encourage the supply of these diverse learning options by removing regulatory hurdles that prevent or limit education entrepreneurship throughout New Hampshire. Who knows what New Hampshire’s next award-winning learning model will be?

Kerry McDonald is an education policy fellow at State Policy Network and a senior education fellow at the Foundation for Economic Education. She is the author of the book, Unschooled: Raising Curious, Well-Educated Children Outside the Conventional Classroom.

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