Wealth Disparities

Kevin writes below about the headline from the report released yesterday by the Delta Project on Postsecondary Costs--that students are paying more for college, but not getting more (and in some cases getting less). But another important finding from the Delta Project's report is the large and growing wealth disparity between private research universities and pretty much everyone else. While spending per student at most institutions has remained flat or declined over the past 10 years, spending per student at private research universities has increased steadily.

As today's New York Times article states:

[The study] describes a system that is increasingly stratified: the smallest number of students — about 1 million out of a total 18 million students — attend the private research universities that spend the most per student. The largest number of students — 6 million — attend community colleges, which spend the least per student, and have cut spending most sharply as government aid has declined.

Figure 14 from the report shows this disparity:

While no one is suggesting that we redistribute wealth among colleges and universities, policymakers should be concerned about this trend. If we continue on this path--and in particular, if states continue to reduce subsidies to public colleges--we could end up with a two-tiered higher education system: a few students will be able to attend elite, well-funded institutions, while the rest of us get our college degrees from schools that are constantly cutting corners.

This Is How You Spell "HAHAHA We Destroyed The Hopes And Dreams of A Generation"

For months I'd assumed that the time would come to use that as a blog post title, but it didn't, and I'm hoping that as of Tuesday it never will. So suffice it to say that Maureen and I made the trek up to Ottobar in Baltimore tonight to see Los Campesinos! and you should buy both the albums they released this last year. (Think Belle and Sebastian with more of a punk sensibility.)

The State and District Dilemma of the Stimulus Package –Supplanting Language will be Critical

Leaks about the content of the House version of the stimulus package surfaced publically this morning (2009%20Stimulus%20Executive%20Summary.pdf). State and school district budgets are clearly facing difficult times, and an infusion of federal funds will be a welcomed event. Education related, the package includes $79 billion for general state fiscal relief, ($39 billion of which is for K12 schools and higher ed) plus Title I ($13 billion), special education ($13 billion), school modernization ($14 billion), technology ($1 billion) and several other smaller investments. But, will states and districts be able to use these new funds without violating “supplement not supplant” provisions that typically accompany federal funding for schools? The details here will be critical. Generally when the federal government provides funding to states it includes boilerplate language requiring that states and school districts supplement the state and local funding provided for a specific purpose for example serving Title I students, and not supplant these funds (use federal funds to reduce the state and local funds provided). The purpose for this language is clear. The federal government wants the investment that it makes actually get to the students that it is trying to serve – in this case Title I students. Absent this language, states would quickly thank the federal government for their investment in Title I, reduce the state and local investment in economically disadvantaged students, and use the freed up funds to redirect to whatever priority the state thought was important like balancing their state budget, or creating some new state initiative like expanding the gifted and talented program. To stop this redirection of funds from happening supplement not supplant language is added. Those violating the requirement must return the funding to the federal government. There is a complex auditing process that accompanies this whole thing.

Of course in the current budget situation, supplanting may be exactly what is intended. State budgets are a disaster. For example in California where they face an over $40 billion budget hole, the current proposal on the table would cut funding for the 2008-09 school year by $2.1 billion and defer $2.8 billion in funding until the 2009-10 school year (here). There would be additional cuts in the 2009-10 school year. And since states can’t print money, states must either cut programs or raise taxes – both of which are bad for the overall economy (think Hoover’s cuts at the start of the Great Depression). So it completely makes sense for the federal government to provide funding to states, and Congress may not have as much concern if a school district uses its new Title I funds to keep from eliminating its arts and music programs and other such actions. But since this is not an allowable use of Title I funds, the district’s business officer will need to do some fancy accounting to launder the Title I funds to free up some funds that can be used for arts and music. Then two years from now the business officer will need to convince the auditors that the laundering did not violate federal law. Then the federal governments will send out their auditors to check the district auditors. Looks like lots of work for the bureaucrats. Keep an eye on the supplement/supplant language in the stimulus package as it moves forward because this is an area where details matter.

Report: College Students, Professors Getting Raw Deal

Everyone knows that college is getting more expensive, but it's easy to get lost in the vagueness of that general knowledge and lose track of exactly how expensive, how that rate of change is changing, and (in particular) where all those additional dollars go. Fortunately the good people at the Delta Cost Project have taken the time to analyze vast amounts of revenue and spending data submitted by colleges to the U.S. Department of Education and report their findings, which were released today.

They found that average tuition for full-time undergraduates at public research universities increased from $4,486 in 2002 to $5,825 in 2006. (All numbers are adjusted for inflation and presented in constant 2006 dollars.) That's an increase of 29.8 percent during a time of economic expansion. Tuition is going increase terribly in the next few years, and it will be blamed entirely on declining endowments and state appropriations, and those problems will certainly be culprits, but let's not forget that tuition also increased terribly when state revenues and endowments were on the way up. (This is partially mitigated by a simultaneous surge in enrollment.) The pattern for public master's degree institutions was virtually identical: tuition went from $3,652 to $4,710, a 29.0% increase

Some may say that this overstates the problem because many students don't pay the full sticker price, and in the past there's been some truth to that. But apparently things have changed. Here I'll just quote directly from the report:

Among public institutions, sticker prices routinely increased less than gross tuition revenues. This happens because more public institutions are using differential pricing to capture greater increases in tuition from students other than in‑state undergraduates. These higher tuitions can come from out‑of‑state students and international students, or from professional schools such as business, law and engineering where full-cost pricing is increasingly common. Institutions are also turning to user fees to fund many functions (e.g., technology fees), which have become a significant source of revenue. This means that focusing on sticker price increases alone understates the real impact of price increases for many students.

One could argue that price increases aren't necessarily bad for students if the money is used for things that benefit students, like education. But it turns out that's not happening either. At the same time that tuition jumped 29.8% at public research institutions, education and general spending per FTE student increased by only 2.5%. At public master's institutions, which imposed a 29.0% tuition jump, spending on education declined by 2.1%. Many students are spending more and getting less.

The report then puts these two sets of numbers together to calculate the student share of costs for education and related expenditures. In 2002, the ratio was 39% at public research universities. By 2006 it had jumped to 49%. Same thing at public master's institutions: 36% to 46%, in just four non-recessionary years. That's a scary trend. Education expenditures as classified under the federal reporting system, moreover, include the total costs of professors' salaries. Since many professors spend only part of their time teaching, these numbers significantly understate what students are paying for the educational services they receive.

Where, then, is the money going? In public institutions, it's mostly a matter of holding overall spending fairly steady while shifting more of the revenue burden to students. Private institutions, by contrast, have seen really spending growth. But the overall trend is clear: even as colleges are charging students much more and reducing the proportion of money spent on education and professor's salaries, they're spending a relatively larger amount of money on "administration, maintenance and support."

In other words, if you're a college student and you feel like you're getting a raw deal, you're probably right. And if you're a college professor who feels the same way, you're probably right too. 

Duncan Takes the Hill

At first, I didn't think my Education Sector colleagues and I were going to get into Arne Duncan’s Senate confirmation hearing yesterday. Arriving at 8:00 for the 10:00 event, we were surprised to find a line of 50 people already camped out in the hallway. They were a pretty disheveled crew, and they weren't exactly jazzed about the Duncan event. A couple were dozing off. But as 10:00 approached and the line grew to several hundred people, these early birds at the front began to disappear, replaced by well-heeled lobbyists for major education organizations, including a half dozen from the National Education Association. It turns out that the organizations hired a company to have homeless people arrive at 4 am to hold places in line for them (a thriving business on Capitol Hill, I discovered). At a rate of what one of the company’s representatives said was $30 an hour, the NEA spent over $1,000 to get its team in the room. The homeless seat-savers, of course, only saw a fraction of the fees. Perhaps they should unionize.

The hearing itself was pain-free for Duncan. He had some good opening lines—“never before has being smart been so cool” and “we can’t wait [to help disadvantaged kids] because they can’t wait.” We learned that he scored 20 points against Duke in a losing cause when he played basketball for Harvard. And for those trying to get a read on Duncan’s likely priorities at the Department, some of his comments were telling.

“I’m a big fan of “growth models,” he said, referring to calls in the policy community to shift the way the No Child Left Behind Act requires states to measure school performance to take into account how much schools improve individual students’ achievement over the course of a year, in contrast to measuring the law’s early focus on gauging how many students in a school meet state standards—a strategy that didn’t take into account the many non-school factors in student achievement and thus gave schools serving affluent schools an advantage.

He weighed in on the school time debate, saying “our day, our week, and our year are too short” in education.

He also sent a strong signal to the education establishment that he would support school reform. He plans, he said, to “challenge the status quo every single day.” I’m not sure that’s what the NEA lobbyists paid big bucks to hear, but that’s what they got.

“Teacher quality,” he said, “must be addressed on many levels: recruitment, preparation, retention, and compensation.” He endorsed pay for performance for teachers and praised the federal Teacher Incentive Fund, the $99 million program that promotes performance pay. “We can’t do enough to incent talent,” he told the members of the Senate Heath, Education, Labor, and Pensions Committee.

Notably, Senator Tom Harkin, a pro-labor Iowa Democrat who president over the hearing on behalf of chairman Ted Kennedy, gave a shout out to Teach for America, the alternative-certification program founded by Wendy Kopp that the unions are not thrilled about (TFA gets $14 million a year in federal appropriations, Harkin told the hearing). Duncan echoed Harkin’s praise of TFA and Kopp and extended it to other social entrepreneurs working in school reform, including Jon Schnur, a former Gore aid and founder of New Leaders for New Schools. He’s working on the Obama education transition and is a likely candidate for an administration job.

But Duncan is a pragmatist, not an ideologue. He’s looking for solutions. Tapping the drive and the talent of education entrepreneurs like Kopp and Schnur makes sense to him. But so does expanding preschool and early childhood education. New research on the importance of intensive early language instruction in helping poor kids develop the cognitive skills they need in schools but often don’t get at home makes this a no-brainer, so to speak.

So is putting health clinics in schools in poor neighborhoods and keeping schools open 12 hours a day to teach parenting classes and English to immigrants, all things Duncan endorsed at the hearing. “The more schools become community centers the better,” he said. He wants to improve learning from within schools and without. Smart.

The College Savings Delusion

While riding Metro home from work last night, I looked up and noticed one of those advertisement placards they run inside the cars, which was promoting the District of Columbia's 529 plan. The slogan was (I may not have the wording exactly right): "Math is complicated. Saving for college is simple." And I got to thinking: Is it? Really?

The ad was clearly aimed at families in the middle class and below, and was meant to appeal to their anxieties about paying for their children's higher education. Such concerns are justified; college is getting more experienced by the year. But let's stop for a moment (or two) to recap why it's so expensive. For the past several decades, the government--primarily states--has been slowly but steadily pulling back from funding higher education at the same time that colleges and universities have been relentlessly raising raising prices and increasing spending. The policymakers in a position to make such decisions don't want to spend more money to fix this problem--they're the same people who decided to pull back funding in the first place. Nor do they want to have a huge fight with the colleges and universities about the relentless tuition increases, because that would be hard. But they still have this problem of families worried about college, and these people are upset, and they vote. So they hit on a solution: more college savings! To sweeten the pot, they throw in a bunch of tax breaks (because spending public money on tax breaks somehow isn't spending public money), which end up primarily benefitting upper-middle class and rich people because they're the people who are actually in a position to worry about big taxes on capital gains and save lots of money in the first place, so it ends up becoming a bonanza for people who don't really need the help, but that's okay, because we're building an ownership society and lower- and middle-class families get a little taste too. As an added bonus, the savings go into the stock market, which allows policymakers to make certain assumptions about yearly returns based on the long-term historical return to the S&P 500 or what have you, which has the effect of essentially creating money out of thin air that can then be applied to the future projections of the ever-rising cost of college, which further relieves policymakers from having to spend actual money addressing said problem, and instead they can spend it on something else, like the [Insert Policymaker's Name Here] Center for the Study of [Insert Policymaker's Name Here], or tax cuts for the rich, or both.

Except it turns out the that stock market is run by liars and thieves who, instead of efficiently allocating capital to productive purposes etc. etc., actually spend their time constructing ever-more-elaborate schemes to defraud the entire world out mind-boggling sums of money. Worse, they turn out to be really stupid thieves who ended up blowing up the entire edifice on their way out the front door with all the money they stole in plain sight of the aforementioned policymakers who were apparently too busy doing things like choosing the font size on the stationery for the Center for The Study etc. to notice. 

As a result, there are now tens of thousands of families across the land with children starting college or in college who would have been better off sticking their money in a mattress than investing in a 529 plan. Heck, they'd have been better off sticking 70 percent of their money in a mattress and spending the other 30 percent on a flat-screen TV and a Wii, because at least that way they'd have a fun way to spend time with their kids during the day while they're not at the job they've just lost and their kids aren't at the college they're not attending because it's too expensive and half their tuition money disappeared in the Wall Street rubble. Meanwhile, the people who run 529 plans have nothing to offer other than utterly senseless comments like this from the p.r. guy in Maryland, who said "We remind people that investments for college are meant to be for the long-term. It's important to stay the course."

And that's whole the problem in a nutshell. Retirement is long-term, in the sense that it happens both in a long time and over a long time. People saving for retirement can afford to ride out ups and downs in the market, and since the goal is to live off the income from your investments and retirement itself lasts (hopefully) for several decades or more, there's also more flexibility to weather a financial storm once you're retired. College, by contrast, is at most a mid-term proposition, eighteen years at the outside. And paying for college is decidedly short-term, since, last I checked, colleges still get paid up-front. 

There's an alternative to all of this: Families pay their fair share of taxes under a reasonably progressive system and policymakers use that money to adequately support higher education and need-based aid while also exercising oversight over colleges and universities that in turn show some restraint in pricing while rejecting enrollment management techniques that direct scarce aid dollars to wealthy students. And when the time comes for people who ride Metro to pay for college, they don't have to worry about astronomical bills or whether their hard-earned money somehow ended up paying for a disgraced trader's second summer house in the Hamptons, because college is affordable.

Simple. 

Merit Pay for College Teaching?

As the Chronicle reported a few days ago and InsideHigherEd reported today, Texas A&M has proposed giving professors bonuses of up to $10,000 based on student evaluations. Predictably--and in my mind, appropriately--many people have raised serious objections to the this. Student evaluations aren't necessarily reliable measures of student learning, some studies indicate that they're biased toward professors with easy grading policies, etc., etc. All fair points. As Clint Magill the A&M Faculty Senate speaker, said to Scott Jaschik, “Any evaluation of teaching that doesn’t include some measure of learning has some real problems.”

BUT -- what seems missing from the discussion is the logical next step: If we agree that there's a need to create better incentives for high quality teaching in higher education, and we agree that the best measures of high quality teaching are based not on subjective student evaluations but objective measures of how much students learn, then why not give professors a $10,000 bonus based on objective measures of how much their students learn? Learning is measurable, after all. Not completely and not to the same extent in all subjects, but you'd have a hard time convincing me that there's no way to arrive at an accurate estimate of how much a group of 300 students learned over the course of a semester in, say, Introductory Physics. And a substantial percentage of all the courses taught in higher education are similar to Introductory Physics in that they're based on a well-established body of knowledge that is testable and doesn't vary tremendously from course section to course section or even campus to campus.

If we gave colleges and educators more incentives to improve the quality of teaching and the larger educational environment, maybe we'd read more stories like this one, in today's New York Times, describing how the physics department at M.I.T has:

...replaced the traditional large introductory lecture with smaller classes that emphasize hands-on, interactive, collaborative learning. Last fall, after years of experimentation and debate and resistance from students, who initially petitioned against it, the department made the change permanent. Already, attendance is up and the failure rate has dropped by more than 50 percent.

M.I.T. is not alone. Other universities are changing their ways, among them Rensselaer Polytechnic Institute, North Carolina State University, the University of Maryland, the University of Colorado at Boulder and Harvard. In these institutions, physicists have been pioneering teaching methods drawn from research showing that most students learn fundamental concepts more successfully, and are better able to apply them, through interactive, collaborative, student-centered learning.

The only real problem with these two paragraphs is the word "pioneering"--it's not like educators are only just now discovering that students learn more in an interactive, collaborative, student-centered environment. That's been known for a long, long time. Yet large lecture classes and other inhospitable learning environments have been allowed to persist--and are still in wide use today--because there are few if any incentives to change them. Which is not to say that professors can change them alone--a superior educational environment for students requires a shared commitment from and collaboration between the faculty and the institution. But while the implementation of the Texas A&M plan is obviously problematic, the underlying goal is sound.

Update: Speaking from experience, Ezra Klein weighs in. 

Low Literacy Shockingly High

Last week the National Center for Education Statistics released data about adult literacy rates(here). It shows both state and county level estimates. When I opened up the links to the data, I was expecting the numbers to be bleak, but not as bleak as they actually were. Nationwide 14.5 percent of adults are estimated to be low literacy. And as you would expect, these adults are concentrated, and the concentration generally mirrors the communities where educators struggle to help K-12 students achieve. But some of the concentrations of illiteracy are startling. The data is provided by county:

Los Angeles – 33%
New York – 25%
Bronx – 41%
Queens – 46%
Miami-Dade – 52%

A Very Bad Good Idea

In the course of composing what sounds like the winning entry in a Thomas Friedman column parody contest, Thomas Friedman wrote the following in his new column:

"One of the smartest stimulus moves we could make would be to eliminate federal income taxes on all public schoolteachers so more talented people would choose these careers."

Look, being a columnist for the New York Times is a pretty good gig and one of the minimum requirements ought to be spending the 30 seconds it takes to figure out that this is, in fact, a terrible idea. 

Federal income taxes are progressive. The average starting salary for teachers is just over $35,000 per year. A new teacher at that salary without dependents who doesn't itemize and files the 1040EZ would pay just over $3,500 in federal income taxes. A veteran teachers making $65,000 per year is going to pay, depending on the assumptions you make about marriage, dependents, deductions, etc., closer to $10,000 per year. Salary schedules and pension benefits in the teaching profession are such that compensation is already skewed toward veteran teachers. This would make that worse. It would also be really expensive: 3.2 million public school teachers at an average salary of $50,000 and federal tax liability of $6,500 = $20 billion per year, more than Title I and Title II of NCLB combined. If we're going to spend that kind of money on enhancing teacher quality--and in the abstract, that's a good idea--how about spending it in a way that's actually focused on attracting new teachers to the profession, or rewarding high-performing teachers, or teachers in shortage areas, or teachers who teach in high-needs schools, or some other set of policies where resources are matched with goals in a minimally thoughtful way? Never mind the problems of picking one worthy profession among many for special treatment in the tax code and all that entails.