Arizona’s system is set up much like Florida’s. The program allows tax payers to make 100% tax deductible donations (against their state taxes) to a voucher granting nonprofit, which then gives the money to the student. The nonprofits are allowed to keep 10% of the donated money, which is how the Senate president cleared $125,000 last year.
But Mr. Yarbrough is not just a champion of tax credit vouchers. He also profits from them personally. The story of how that happened raises questions about President Trump’s campaign promise to spend $20 billion to increase school choice. There’s a strong chance that he’ll do that through tax credit vouchers — a mechanism that Betsy DeVos actively campaigned for before she became Mr. Trump’s education secretary.
This double dipping is unusual, most states don’t permit it. Tax credits are popular as a way to fund vouchers because they can be spun as a tax cut for the people making the donations. Funding in this matter makes it harder to track the money and whether or not is actually improves educational outcome.
Yet the group doesn’t do all the work involved with accepting donations and handing out vouchers. It outsources data entry, computer hardware, customer service, information processing, award notifications and related personnel expenses to a private for-profit company called HY Processing. The group paid HY Processing $636,000 in 2014, and millions of dollars in total over the last decade.
The owner of HY Processing? Steve Yarbrough, along with his wife, Linda, and another couple. (The “Y” in “HY” stands for “Yarbrough.”) According to The Arizona Republic, Acsto also pays $52,000 per year in rent. Its landlord? Steve Yarbrough. In June 2012, Mr. Yarbrough bought a car for $16,000. In July 2012, Acsto reimbursed him the full amount.
Still it's too early to make a conclusion about online learning.
Though students who pursue an exclusively or substantially online education usually see their earnings go up following their efforts, it’s typically not enough to cover the amount they spent on tuition and fees, according to a working paper by Stanford University economist, Caroline Hoxby, distributed by the National Bureau of Economic Research this week. What’s more, the earnings increase is rarely enough to recoup the cost society pays — in the form of federal student loans — to send them to school, the study found.
The findings come after years of growth in enrollment in online education, buoyed by deregulation and evangelists’ claims that the courses offer the benefits of a college degree at a fraction of the cost, both in time and money spent. Up through 2003, less than 50,000 students enrolled in primarily online education each year, the study notes. By 2013 that number had increased nearly ten times to 423,968. But the paper, which is based on Internal Revenue Service data of Americans who attended exclusively or substantially online colleges between 1999 and 2014, raises questions about whether these students are being served well.
Despite Hoxby’s troubling findings, it’s hard to say whether online education in and of itself is inherently problematic or whether certain models could be successful. Goodman’s research on a Georgia Institute of Technology online master’s in computer science program indicates that, if done right, an online degree can provide a decent education at a fraction of the cost.