Unbundling school: How a new financing mechanism is building modular education for the future

Parent satisfaction with public schools has been declining for several years. In EdChoice's national polling in June 2026, fewer than half of public school parents in the US say they are very satisfied with their child’s school.

This data is a result of three converging anxieties of families: COVID gave parents an unfiltered look at what their children's learning looked like day to day; the visible harms of social media on adolescent mental health are now compounded by newer, larger worries about artificial intelligence (AI); and uncertainty is growing about which skills will matter in tomorrow's job market.

After years of shouldering these pressures, families are now demanding innovative solutions and greater autonomy over their child's education.

Two significant market responses are emerging concurrently: a new generation of school models is emerging to answer what a future-ready education looks like, and a new policy mechanism in some states is lowering the barriers for new education and school entrepreneurship.

Traditional K–12 education (for pupils aged 5–18 years old) was never built to reward the mastery of learning itself. It was designed to sort students by test scores, age and grade level.

For a century, that design held together because the result and the work were inseparable: producing the essay meant doing the thinking. Generative AI (GenAI) exposes this flaw and renders much of the century-old school design obsolete.

GenAI tools can now produce the essays, problem sets and multiple-choice answers that schools grade, at a level that exceeds most human performance. In an educational model that rewards the output and de-emphasizes the process of learning, students are left with a rational question: why learn at all, when the work can be offloaded?

In response, new alternative school designs are being founded by teachers and school leaders who are similarly disillusioned with traditional school design. Many are also intent on structuring these schools explicitly around what researchers call durable, or “human authentic”, skills, such as relational intelligence, agency, self-directed learning, creativity and more.

Across the country, vanguard models built on this premise are gaining traction with families. Red Bridge, a K–8 school (for ages 5–14) in San Francisco that was founded in 2020 by veteran educator Orly Friedman, is organized primarily around student agency – defined as the ability to set meaningful goals and have the will and skill to achieve them.

Rather than sorting children by grade level, Red Bridge groups students by their capacity to drive their own learning. It promotes them through “autonomy levels” as they demonstrate they can set and follow through on their own goals. And it awards mastery-based learning credits in place of traditional grades.

On the other side of the US, The Village School in Arlington, Virginia – a PreK–8 (ages 4-14) microschool founded in 2018 that is now expanding into high school – takes a learner-centred, project-based approach built on mixed-age developmental groups, experiential learning and problem solving.

The school is explicit about its stance toward the AI era: it promotes AI literacy while deliberately emphasizing the uniquely human skills that machines cannot replicate.

A growing chorus across the education landscape is recognizing human flourishing and durable skills as central to this new era of schooling – and to long-term economic security. As a result, these school designs often resonate deeply with discontented and often anxious families.

If these vanguard models represent what anxious families are looking for and what disillusioned educators value, the interesting question becomes how to encourage more of this educational entrepreneurship so that supply meets demand.

Certain US state legislatures believe the answer is a specific policy tool: the Education Savings Account, or ESA. A wave of states – including Arizona, Florida, Iowa, Utah, West Virginia, Arkansas and Tennessee – have passed universal or near-universal ESA programmes.

Texas recently pledged $1 billion towards its own ESA initiative. Instead of funding a seat in an assigned public school, the state deposits a portion of what it would have spent per student, typically $7,500 to $10,000 a year, into a bank account the family controls.

Families can spend it on private school tuition, tutoring, curriculum, therapies or other approved educational services. Depending on how eligibility is defined, between eight and 18 states now run programmes open to most or all families, and several more are expected to launch by the end of 2026.

Beyond expanding access, ESAs are having a second, less obvious effect: the services of traditional schools are becoming unbundled and enabling parents to customize their child's learning experience with new precision.

Conventional schools – public and private alike – are traditionally sold as a single bundle. Tuition or tax dollars fund not just instruction, but transportation, athletics, extracurriculars, childcare, cafeterias, and a wide range of compliance and support functions, regardless of whether a given family’s child uses any of it. That bundle is a major reason school is expensive: every family pays for the whole package, regardless of fit.

ESA dollars in the hands of parents are pulling that bundle apart. Rather than purchasing “school” as a fixed package, families are directing funds toward the specific mix of services their child actually needs—and skipping the rest. A family that doesn't need bus service or a cafeteria can put those dollars elsewhere. As parents' expectations of what a school must provide narrow, the cost of running one falls: providers no longer need to staff and fund services a given family isn’t using.

The result is a more modular education ecosystem, where independent providers each optimize a single service – instruction, tutoring, enrichment, transit – rather than one institution handling all of them under one roof. That modularity is also what makes these providers agile: a microschool that only handles instruction can adapt its model, curriculum, or hours far faster than a school built to administer a much larger bundle of services.

While traditional schools with decades, sometimes centuries, of inertia toil over what stays, what goes, and what shifts for an impending AI world, these alternative schools and their designers have the advantage of building from first principles right now – unbundled, modular and built for a single family's needs rather than every family's needs at once. Families are lining up to enrol, public dollars in hand.

The shift toward unbundled, customized education raises many questions.

How do families decide what's best for them? How do we, and should we, measure and evaluate these school models?

Unbundling also shifts logistical responsibility onto parents – transportation, scheduling, and vetting quality are tasks that a single institution used to handle. How do families navigate this?

It is also unclear how higher education will respond to these structural changes in K–12 education – or how its own selection criteria may adjust.

What is clear, however, is that the combination of new funding mechanisms meeting parents with new priorities is changing what a meaningful share of US families expect school to offer.