North Carolina scores low marks when it comes to fostering a welcoming regulatory environment for educational innovators and entrepreneurs, according to the Education Entrepreneur Freedom Index.

The goal of the index, developed by EdChoice and the yes. every kid. foundation. with assistance from the Libertas Institute, is to spur discussion around regulations affecting educational entrepreneurs seeking to open innovative schooling options that meet the needs of students and families. Such options — including home school co-ops, private schools, microschools, learning pods, and more — have exploded in popularity in recent years as school choice programs have expanded and more parents sought alternative educational options for their children during the pandemic.

Unfortunately, regulations can limit parents’ choices and stifle entrepreneurs’ efforts to meet market demand. As the index explained:

Education entrepreneurs (“edupreneurs”) are creating and operating unconventional learning environments in response to growing demand for alternative education options that meet the individual needs of children. Each state has a unique regulatory landscape that imposes more or less complicated regulatory burdens on edupreneurs. … Over-regulation means that families have fewer opportunities to access solutions that meet their individual learning needs.

Some of the legal and regulatory barriers that educational entrepreneurs must reckon with include compulsory education laws, home school or private school laws and regulations, child care regulations, zoning laws, business licensure requirements, and fire and safety codes.

The Education Entrepreneur Freedom Index evaluated the regulatory climate in each state based on the following 10 questions:

1. Can the educational environment operate without getting a state business license under state law?

2. Does the state allow for unlicensed, unregistered, unaccredited, or unapproved non-religious, nonpublic schools?

3. Does the state allow nonpublic schools to operate without imposing educational requirements on teachers?

4. Does the state’s homeschool law support or facilitate the operation of the educational environment?

5. Can the educational environment operate in accordance with the state’s homeschool law without registering?

6. Does the state allow homeschool instruction without imposing educational requirements on instructors?

7. Does the state allow child care facilities to operate without imposing educational or qualification requirements on administrators/supervisors/teachers?

8. Do the state’s child care laws and regulations provide a clear exemption for “Drop In/Open Door” programs?

9. Do the state’s child care laws and regulations provide a clear exemption for educational programs for school-age children?

10. Does the state adapt the application of occupancy code requirements in recognition of the existence and needs of small learning environments?

Each affirmative response received one point, while negative responses earned no points. Higher scores indicated less burdensome legal and regulatory climates for educational entrepreneurs.

North Carolina scored a 3/10, showing that there is significant room for improvement to make the state a more welcoming place for educational innovation.

Scores of North Carolina and Select Neighboring States on Education Entrepreneur Freedom Index

Source: Education Entrepreneur Freedom Index (Feb. 2024)

Every state has a unique regulatory climate, and nontraditional learning environments come in many shapes and sizes. In order to facilitate a comparison across the 50 states, the index considered how each state’s regulatory environment affected the following type of provider: “a small, non-religious educational setting that allows unrelated school-age students to participate in educational activities in the space for some portion of the week.”

The index doesn’t include all the barriers that might stifle educational entrepreneurs, such as zoning laws and accreditation requirements, so it doesn’t provide a comprehensive picture of North Carolina’s regulatory climate. Nevertheless, it can serve as a springboard for discussions about how North Carolina can lessen burdensome regulations and thereby encourage the growth of innovative educational options that serve students and families.