Nevada's Scholarship Lifeline: Temporary Relief, Long-Term Uncertainty

Following the Interim Finance Committee’s party-line rejection of Gov. Lombardo’s emergency request, the administration came to a rescue. It announced last week that the AAA Scholarship Foundation would step in to support students at risk of losing their scholarships.

This is great news since Nevada’s Opportunity Scholarships Program provides crucial financial assistance to families seeking alternative educational options for their children other than the traditional failing government school system.

The AAA Scholarship Foundation is Nevada’s largest scholarship-granting organization, and it will dip into its $13 million of reserves as a short-term solution allowing eligible families at risk of losing their Opportunity Scholarship until Sept. 11 to apply for coverage.

We must stress that this is only a stop-gap measure with potentially negative consequences long-term if legislative Democrats continue to block any expansion to the program.

While AAA’s reserves of $13 million may seem substantial, they are finite and only a temporary band-aid on a much larger wound.

AAA Scholarship Foundation’s dominance within the Nevada market is undisputed, and this short-term solution only further consolidates their hold, risking a monopolistic scenario.

A key component of school choice is healthy and robust competition among the scholarship-granting organizations, or SGOs, and the schools themselves.

By blocking Lombardo’s work item during the Interim Finance Committee hearing, legislative Democrats have continued to destabilize the program, creating market conditions where smaller scholarship-granting organizations are at increased risks of disappearing.

Implications for School Choice

The potential dwindling of SGOs in the market due to the unwillingness of Democratic legislators to properly fund the program can lead to:

Reduced innovation and a lack of competitive improvements within the SGOs;
Potential price inflation in the administrative costs or other related fees; and
Increased risk for Nevadan families as dependence on a single scholarship-granting organization could lead to systemic shocks threatening the entire program were AAA to face financial challenges or controversies.

There is little doubt that opponents of school choice are hoping for these potential risks to materialize. It will give them messaging ammo to attack the program as flawed despite it being a crisis manufactured by their refusal to expand the program.

As our own Geoffrey Lawrence noted recently in the Las Vegas Review Journal, Lombardo’s administration should make the bold move of bypassing the legislature completely and going directly to the people.

Nevada needs to significantly expand this popular program not only to ensure no child loses access to the quality education that meets their needs but to also absorb the extensive waiting lists of Nevadan families hoping to receive a scholarship.

Failure to do so will be a disservice to a popular and successful program that provides an escape valve for many Nevadan families.

Behind every scholarship is a student with dreams, aspirations and a family seeking the best for them. It’s imperative that we prioritize students and ensure they have access to the education they deserve.

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