Saturday, February 02, 2008

More Massive Endowments

I went to an event at AEI on Friday morning, focused on the question of whether Congress should obligate non-profit universities to spend a minimum percentage of their endowments every year, a requirement currently applied to non-profit charities. Parenthetically, it's worth noting that AEI puts on some of the best education-related events in town. The issues are timely, they get the right people in the room, and the discussions are pretty balanced, ideologically. The one downside is that the conference center is on the 12th (top) floor of the AEI building, which houses publications like The Weekly Standard along with organizations like the Project for the New American Century and, well, AEI. That means that if you go to enough of their education events, you inevitably have the experience of glancing at the person standing next to you in the elevator and thinking "Hey, I saw you on TV, you're that guy who seems to be hell-bent on destroying civilization as we know it." Is there an ethical obligation to say something in this situation? This troubles me.

Anyway, while I walked into the event glad that the endowment issue is causing people to scrutinize the much-understudied issue of how colleges spend their money, on balance I was against a minimum payout. Charles Miller, chairman of the recent Commission on the Future of Higher Education, made a principled argument against the feds interfering with institutional spending decisions while also pointing out that university endowments are encumbered by a lot of donor-directed legal restrictions on spending. Plus, he noted, any university financial official with half a brain could shuffle funds around in a way that would meet the letter of the law while leaving actual spending unchanged.

Other panelists, however, made some good counterpoints. For example, did you know that when it's reported that universities spend, on average, 4.6% of their endowments, that number includes the cost of managing the endowments themselves? Or that the single biggest category of donor-restricted spending is financial aid for low-income students? So when politicians suggest that institutions could do more to restrain prices for needy undergraduates if they bumped the payout up to 5%, that's not a crazy idea.

Richard Vedder also raised a larger issue: the generally unquestioned idea that colleges and universities deserve non-profit status because of the positive benefits they provide to society at large. Vedder argues that the empirical case for this, framed in terms of benefits vs. the cost in lost tax revenues, isn't as obvious as one might think. Of course, of course, much of what makes higher education valuable can't be measured in terms of dollars and cents. That said, I think the non-profit sector that most resembles higher education in longevity, attitude, and weakness for monumental architecture is organized religion, in particular the Catholic Church, and while the church spends money running charities and parochial schools for low-income urban students, colleges blow vast amounts of tax-subsidized funding operating professional sports entertainment franchises for the amusement of their students and alumni. There are few, if any, major non-profit sectors that are as fundamentally self-interested as higher education, where we're obligated to assume social benefits on faith in such a diffuse, attentuated way.

To be clear, I'm not advocating for revoking the tax status of your local university. Higher education does a great many things for a great many people, and in countles ways large and small enriches the world around us. But the time when policymakers and the general public simply take higher education's word for it--on spending, learning, and many other things--is, thankfully, coming to end.

Friday, February 01, 2008

NY Times Delivers the Standard Virtual School Story

Today’s New York Times features the standard story on K-12 virtual schooling. The Times deserves kudos for covering this increasingly important topic and for accurately pointing out that there are different types of virtual schools. But, after noting that the vast majority of students participate in supplemental, mostly state-run virtual schools, the article focuses 90% of its copy on the controversies surrounding full-time, cyber schools.

True, cyber school issues are in play in many state courts and legislatures. More importantly, they are full of controversies around unions, home schooling, and privatization—the red meat issues that make for good copy and get the usual suspects going on either extreme of conventional education debates. It all makes for a good story that can be easily covered in the usual way that education is covered. But, there’s a much bigger story still untold.

Just as modern workplaces bridge multiple online and offline communications modes, the future for education is neither a fully virtual nor a parallel system, but an integrated one. The overwhelming majority of students will continue to attend physical schools. However, increasing numbers of students will also take courses or parts of courses online, moving back and forth seamlessly between the traditional and virtual—just as they do in every other aspect of their lives.

Right now, there is an opportunity for the deep structural changes that we’ve seen the Internet spark in almost every other field. In each case, new organizations developed alternative management structures, distribution methods, and work models.

Virtual schooling can drive the same sorts of transforming changes in public education. While the importance of effective teaching and learning has not changed, the Internet has enabled educators to significantly alter the experience of schooling. Virtual schools are personalizing student learning and extending it beyond the traditional school day. They’ve created new models for the practice of teaching—with opportunities to easily observe, evaluate, and assist instructors. And they are pioneering performance-based education funding models.

That is why it is increasingly important to understand the broader innovations that are emerging from online schooling and their potential to leverage reform on a far larger scale in public education.

Thursday, January 31, 2008

Cutting it at the Front of the Classroom

The American Federation of Teachers has released a statement on a report we published yesterday. The report's called “Rush to Judgment: Teacher Evaluation in Public Education.” As the title suggests, it looks at the ways school systems figure out who’s cutting it at the front of the classroom and who isn’t. It’s a pretty important issue, given that the nation spends $400 billion a year on public school salaries and benefits.

The AFT’s statement declares that the report “acknowledges” what the union has “long known,” that “current testing systems are not accurate or strong enough to become the basis of a good teacher evaluation program.” The union went on to say that the report is “thoughtful and balanced.”

I appreciate people saying nice things about my work. I deserve far more compliments than I get. But I suspect that the kind words from my friends at the AFT might have something to do with the fact the union’s largest local, the United Federation of Teachers in New York City, is waging war against a recent proposal by New York City schools chancellor Joel Klein to rate teachers in the nation’s largest school system on the basis of their students’ test scores.

It’s a radical idea in public education, where teachers’ credentials have always mattered more than their performance. For the record, it’s an idea that I support. Teaching is, after all, primarily about student achievement.

But I argue in “Rush to Judgment,” which I wrote with Bob Rothman of the Annenberg Institute for School Reform, that test scores should play a supporting rather than a leading role in teacher evaluations.

That’s because only about half of public school teachers teach subjects or at grade levels where students are tested, eliminating the prospect of a system that’s applied fairly to all teachers. A second problem is that most standardized tests in use today measure a narrow band of mostly low-level skills and thus disadvantage excellent teachers able to move their students beyond the basics.

Kevin Carey, Education Sector’s policy manager, noted in a post here several days ago the progress that has been made in figuring out how to distinguish individual teachers’ impact on their students’ reading and math scores from the myriad of other influences on student achievement. It’s not defensible to use test scores in teacher evaluations without separating signal from noise in this way. And to their credit, Joel Klein and his deputy, Chris Cerf, the architect of the New York testing plan, are taking steps to do the right thing on this point. But there aren’t a lot of school systems in the country with the technical know-how to do what New York is doing.

As a result, test scores are best suited to play a secondary role in teacher evaluations and school systems should use schoolwide scores in their evaluation calculations, rather than individual teachers’ scores.

A key to stronger teacher evaluations, in both New York and nationwide, is taking a lot more seriously the scrutiny of teachers’ work in their classrooms. The typical teacher evaluation in public education today consists of a quick classroom visit by an untrained principal wielding a checklist that often doesn’t even focus directly on the quality of a teacher’s instruction.

As we argue in our report, evaluations should be based on clear, comprehensive standards of strong teaching practice that have emerged in recent years. And they should be based on multiple observations by multiple evaluators, with a substantial role going to teams of trained school system evaluators free of the inclinations to favoritism and conflicts of interest that plague principal-led evaluations—and that led to the rise of credential- and seniority-based pay scales in public education 80 years ago.

Credible, comprehensive classrooms evaluations supplemented with student test scores used responsibly is a strategy that the AFT should be able to buy into, at least if it likes our report.

Wednesday, January 30, 2008

The School Budget Crisis That Wasn't

There's something strange about the front-page school budget crisis story in the Washington Post this morning, titled "Housing Downturn Squeezes Schools."

All the major elements are there. "The rapid cooling of the Washington area's real estate market has hit school systems with force," we are told. There are "financial hard times." "As can be seen with jittery stock markets across the world, it is unclear whether the storm is over." "The economic instability could not have happened at a worse time" because NCLB mandates "threaten schools that fail to comply with restructuring and state takeover."

The only thing that's missing is...the budget crisis.

Seriously, I've read the article through twice, and other than a salary freeze in PG County, there's hardly anything there. The article notes that "In the District, next year's budget will probably drop from $796.2 million to $794.6 million because of declining enrollment." In other words, a 0.2% drop for reasons that have nothing to do with the housing downturn. In Fairfax County, the budget is increasing by 3.3 percent, but they may only cover the cost of AP and IB tests for low-income students, instead of everyone--which is likely to result in a 0% change in AP test-taking. Average class size may rise by 0.5 students. The Montgomery County budget is going up $110 million, but "proposals to save $546,060 by asking some teachers in the five secondary magnet programs to teach one more daily class have raised alarm." The Loudon County school budget is increasing by 14%.

It's almost like they decided to write the story first and then sent some staff writers out to do the reporting, and when the facts didn't match the framing, they just went ahead and published it anyway....

The problem here is that the Post doesn't seem to understand how school funding actually works. The article says that "school systems rely mainly on state and county government funding, and those governments draw most of their revenue from property taxes." That's only half true--county governments get their revenue from property taxes, but state governments get their revenue from income and sales taxes. And the dynamics of property vs. income and sales taxation are very different.

The basic formula for state budgeting is this: (Tax Base X Tax Rate) = Revenue = Budget. State income and sales tax rates are fixed and don't change very often. They produce a certain amount of revenue in a year, which the state legislature spends.

The basic formula for local budgeting, by contrast, works like this: Tax Rate = (Budget / Tax Base). In other words, elected officials start by deciding how much money they want to spend, and then set whatever property rate is needed to raise that much money based on the total value of taxable property.

When times are good and property values are rising rapidly--as they did in the DC area before the real estate bubble began to burst--county officials tend to enact generous budgets that increase in the range of 5% - 10% per year. Because property values increase much faster, the actual property tax rate goes down. But homeowners don't care about the rate, they care about the bill, and while they grumble about increased taxes, they also understand that--unlike with state taxes--local property values and school budgets are intimately related. Just as increased property values are good for the Fairfax school budget, a healthy Fairfax school budget is good for property values.

When property values crater, school officials ease up an the annual increases while increasing the property tax rate dramatically, because the tax base is shrinking while the budget is still growing--but again, nobody cares about the rate, only the bill. And people will still pay the increased bill, for the reasons above, and because while property taxes are based on property, they're not payed from property--they're paid from income, and local incomes are not crashing in DC in the same way that housing values are crashing. There's no "income bubble," people still have jobs--particularly when a lot of the economy is government-related--and so for the most part they can still pay their property taxes.

In other words, the Post wrote the story thinking that local budgeting works just like state budgeting--that a decline in the tax base leads to a commensurate decline in tax revenues, and thus spending. As the facts of the story itself show, this just isn't true.

Tuesday, January 29, 2008

The Higher Ed Lobby Strikes Again

Most of the Presidential candidates, particularly the Democrats, have pledged to do something about the high price of higher education. But while they're busy campaigning, the DC higher education lobby is working behind the scenes on Capitol Hill to sabotage efforts to make higher education more transparent, accountable, and ultimately affordable.

This begins with the recent initiative by Secretary of Education Margaret Spellings to provide parents and students with more information about how well individual colleges and universities educate their students. Part of this push has focused on accreditation, a voluntary, non-governmental process by which higher education essentially polices itself through periodic inspection and peer review by non-profit accrediting organizations. Accreditation is intricately tied to federal policy, because the feds only allow students to use Pell grants and federal student loans at accredited colleges. In order to ensure that the process has integrity (stay with me here) the U.S. Department of Education periodically reviews and re-certifies the accrediting organizations themselves. In other words, it accredits the accreditors.

Accreditation can have a lot of value in providing colleges with candid feedback, and it's done a good job of building a floor in terms of quality and financial integrity. If you pay your tuition to an accredited college, it's very unlikely they'll steal your money or hand you a worthless diploma. But accreditation does a terrible job of creating or providing any kind of public, comparable information about institution-level academic quality. The process simply isn't designed for this, which is why colleges never lose accreditation because they don't do a good enough job teaching their students. In the end, the academic quality component of accreditation often amounts to this:

Accreditor: Given your academic mission and student population, are you doing a good job educating your students?
College: Yes.
Accreditor: Are you sure?
College: Yes.
Accreditor: Okay then!

This is one reason that less than half of all recent colleges graduates scored as "proficient" on a test of literacy.

Since accreditation is one of the few federal leverage points on issues of learning (as opposed to research or financial aid) in higher education, Sec. Spellings has used it to push for more public information about academic quality. The institutions and accreditors have pushed back--hard. This all came to a head last month, when the federal panel that accredits the accreditors met to review the New England Association of Schools and Colleges (NEASC), which has been around since 1885 and accredits most of the Ivy League.

In past years, reapproval of NEASC has been basically a formality. But this year, the panel had a new member, Anne Neal, president of the conservative American Council of Trustees and Alumni (ACTA). As reported in InsideHigherEd, Neal proceeded to ask NEASC a series of discomforting questions that boiled down to "Do you have any standards or objective criteria for deciding if the institutions you accredit are actually teaching well? Do they? If you don't and they don't, how do you actually know?"

To which NEASC replied, in so many words: "No; no; we know it when we see it." And of course, they always see it.

At this point various parties involved started to challenge the entire premise of Neal's line of questioning, saying that it was beyond the purview of the panel to even ask whether accreditors have any kind of transparent process for assessing academic quality that could conceivably produce an answer other than "good enough." Behind the scenes, people started to say that if this kind of talk kept up, they would take the matter directly to Congress, which was (and is) in the middle of reauthorizing the massive federal Higher Education Act (HEA).

Now it appears that's exactly what happened. The talk around town is that the influential higher education lobby (described in this essential Washington Monthly piece from Politico's Ben Adler) has lined up substantial support behind an HEA provision that would short-circuit the Department of Education's entire effort, preventing it from requiring accreditors to require colleges to provide information about whether they're actually teaching their students well. The bill currently in the House says, in section 496:

"Nothing in this section shall be construed to permit the Secretary to establish any criteria that specifies, defines, or prescribes the standards that accrediting agencies or associations shall use to assess any institution's success with respect to student achievement."

In other words: While the federal government spends tens of billions of dollars a year supporting higher education, directly and indirectly through grants, loans, tax preferences, etc., it shall be legally required to take higher education's word for it that all that money is being spent well on behalf of students, regardless of any evidence to the contrary.

Keep in mind, this is not No Child Left Behind for higher education. Nobody is proposing that anyone other than the accreditors or the institutions themselves set standards for academic quality. They're just proposing that there ought to be standards or information of some kind that regular people and prospective students can actually understand, and that colleges should explain why they have or haven't met them.

What does this have to do with affordability? Simple: America's intractable college cost problem is actually in large part an information deficit problem. Because there's no real, comparable information about how well different colleges teach or how much their students learn, price and quality have become synonymous in the higher education market. Institutions accumulate prestige by spending their way up the rankings ladder, raising tuition and exclusivity along the way. The lack of data about quality (along with high barriers to entry) keeps competitors at bay. As long as this remains the case, no amount of additional Pell grants or reduced interest rates will be able to keep up with spiraling costs.

The Democratic nominee for president will either be Senator Clinton or Senator Obama, both of whom sit on the Senate HELP committee. That means that in the not-so-distant future, a Senator who may very well be the next President of the United States could be faced with having to vote up or down on a bill that will hamstring the ability of their administration to seriously tackle both the problem of inconsistent academic quality in higher education and out-of-control increases in cost.

Hopefully, someone will step in on behalf of students, taxpayers, and the public interest. But if the higher education lobby's history of short-circuiting needed reforms is any indication, the narrow self-interest of entrenched institutions may prevail once again.

What about the ladies room?

Forget about fancy, high-priced dorms--the University of Colorado at Boulder just sold the naming rights to a men's bathroom, complete with an inspiring quote: The best ideas often come at inconvenient times. Don't ever close your mind to them.

But what about the ladies? Certainly there's a successful businesswoman out there who would contribute her name for the sake of some potty parity. (Via Inside Higher Ed's reliably good quick takes.)

Monday, January 28, 2008

Charts You Can't Trust

Education Sector has a monthly feature called Charts You Can Trust, short policy briefs built around a couple of pieces of interesting data. You can read them all here. They're fun. We've always wanted to run a chart you can't trust, but never got around to it -- and now Sherman Dorn has beat us to the punch, with this piece on dubious graphics from the Friedman Foundation.

Subprime Student Loans?

Last Thursday, Sallie Mae announced a $1.6 billion loss—a bad day capping the end of a bad year for the company. Sallie Mae also announced that it would be cutting back on loans to nontraditional schools, especially schools with low graduation rates. Echoing the sentiments of banks who bet too much money on bad real estate loans, Al Lord, Sallie Mae’s chief executive, said "Sallie Mae has lent too much money to students who have gone to schools without very good graduation records." And now the company is looking to make some changes.

The first schools to feel the hit were for-profit career colleges—Career Education Corp., Corinthian Colleges, and ITT have all announced that Sallie Mae is cutting back on loans for their students. For-profit colleges are understandably nervous about this, and if these cuts start to limit students’ access to federal loans, it could be cause for concern. But right now, it looks like the cuts are mostly focused on the previously fast-growing private loan sector of Sallie Mae’s business—loans that don’t include the protections or guarantees of federal loans. And this may just be a good thing.

It’s not hard to see parallels between subprime mortgages and programs like Sallie Mae’s “opportunity loans” in which private loans were provided to students with poor credit ratings. While these loans might provide students with the money they need to attend college in the short-term, it’s hardly an opportunity if the students don’t have the financial resources to repay the loans. And hopefully it will encourage some of these colleges to shift their focus from simply getting students in the door, to also graduating them and helping them to get a job.

If You Pay Them They Will Pass

Seriously? Baltimore is putting aside nearly a $million to pay students to pass the Maryland state high school exit exams. This has got to be the worst example of how to engage students in their education, if that's in fact the point, although it was easy enough to find students who support this idea. Of course they do- it's $110 in their pocket if they pass- but I'll bet if you probed further you'd get a good number who'd tell you that it's not actually a smart use of funds. Better ways to engage students: make instruction more interesting and challenging, link the materials to their lives and experiences, help them understand why it matters. Not for $100 to pass a test, but the nearly 100 percent increase in earnings that college degrees will get them. Harder to do, yes, but that's what it takes if you want kids to care about school. As for the exit exams? They're gaining momentum in the states (about 1/2 have them now, or will by 2009) but it's not funding gimmicks that will make them work for students.

Frightening Bad Media Trend Convergence

Long-time Q&E readers know that we're particularly aggravated by two types of bad news stories with weed-like properties of propagation and ineradicability: the bogus trend story, and the voyeuristic female teacher / male student sex scandal. Inevitably, the two have now converged:

(AP) -- Heeding a steady drumbeat of sexual misconduct cases involving teachers, at least 15 states are now considering stronger oversight and tougher punishment for educators who take advantage of their students. Lawmakers say they are concerned about an increasingly well-documented phenomenon: While the vast majority of America's teachers are committed professionals, there also is a persistent problem with sexual misconduct in U.S. schools.

"Increasingly well-documented." Yeah, I wonder how that happened.

Sunday, January 27, 2008

The Wire, Season Five, Episode 4

This week, we learn that Baltimore is no city for old men.

First, Clay Davis continues hurtling toward an indictment, and gets the perp walk treatment from the DA to boot. I almost feel sorry for him, except not really. Then Commissioner Burrell gets the final word on his ouster. He tries to play the Daniels corruption card, but to no avail, because the truth hardly matters when it comes to politics, which he should have learned by now. Finally, Prop Joe's long, long run comes to an end. The Post's Tom Shales draws the parallel to Abe Vigoda's demise in The Godfather, which is a reasonable observation except he made it behind the thinnest of veils nearly a month ago, before the first episode had run. Maybe one reason newspapers are losing revenue and readers to the Internet is that their TV columnists don't know the meaning of "spoiler alert."

Ultimately all three got what was coming to them, and none were truly surprised. Joe's mistake was seeing himself as civilized, with his lawyers, bank accounts, and business-like reasonableness. But he was only a murderer and a drug dealer in the end, just like Marlo, and of the two of them, Marlo was the one smart enough to understand what that meant. Leroy Burrell may be "stone stupid," but he's headed to a full pension and sinecure in DC while Joe rots in a vacant with all the rest.

The rest of the episode was a little slow, I think. It was good to see Kima again, albeit to no real purpose. Beadie confronts McNulty, whose fake serial killer investigation continues like a slow-motion car crash. Lester enlists the help of old partner who got busted out of homicide because of some righteous confrontation with The Man. Hey, isn't that exactly what happened to Lester, almost to the letter? Saint Gus of the Newsroom takes a few more arrows on behalf of American Journalism. Carver decides he has no choice but to bust Colicchio for being a violent SOB, leading to a conversation with Herc that was one of the best moments of the season so far. Daniels barely settles into his new desk as Deputy-Ops before getting a call for Rawls. Maybe someone from the gay bar? Odds on that ever coming up again? Omar confronts Slim Charles but doesn't kill him, because a man's got to have a code.

Years-gone-by reference of the week: Prop Joes buy flowers for Butchie's funeral, telling the florist that he doesn't want one of those gangster arrangements, like the one Bodie (R.I.P.) bought for D'Angelo's funeral back in Season Two, Episode 7.

Next week: Looks like Cutty finally reappears. Dammit, where's Poot?!