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.

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?!

This is Probably True

Per The Onion:

TV Critics Admit To Never Having Watched The Wire

NEW YORK—Despite heaping lavish praise on the HBO crime drama The Wire, television critics across the country admitted Monday that not one of them has ever sat down to watch an entire episode of the show. "The Wire has done what no other television program has come close to achieving—namely, presenting the life of a decaying American city and doing so with the scope and moral vision of great literature," said New York Times critic Virginia Heffernan, who was surprised to hear that the groundbreaking series had already started its fifth and final season in early January. "It sounds fantastic. I really wish I had HBO." Many reviewers from top media outlets assured reporters that they would start watching the Peabody Award–winning show just as soon as the first season reaches the top of their Netflix queues.

"Technical" Objections

Over at the UFT, Leo Casey accuses us of various rhetorical sins involves caricatures, straw men, etc, in recent comments about the NYC value-added project. Their grievances lie with the methodology, says Leo, and it's wrong to say otherwise. Okay, very well. Two questions:

1) What are the basic elements of a UFT-approved methodologically appropriate method for estimating individual teacher effectiveness using value-added measures based on standardized test scores? For example, if the school system were to find a way to fix every problem that Leo mentions--multiple teachers between tests, small numbers of students per teacher, etc.--would that be sufficient to assuage their concerns?

2) Given a UFT-approved value-added methodology, what uses of value-added data would the UFT endorse? Could the results be released to the public? Could they be used as one factor in making tenure decisions or providing performance bonuses? Anything else?

If Leo provides a straight answer to those questions, and if the answer to the second questions is something other than "None," I'll officially apologize for saying that the UFT's reaction to the value-added reflects a principled opposition to evaluating teachers using student test scores.

No Child Tickets

En route to a meeting here in D.C., I walked by the Woolly Mammoth theater this morning and saw this poster for the solo show by former NYC public school teacher, Nilaja Sun. Sounds good, and more fun than most No Child events these days. It opened on Jan 21 and will be around through February 17th.

Massive Endowments

The annual college endowment report from the National Association of College and University Business Officers (NACUBO) was released yesterday. Overall, it was a great year for higher education, with average earnings of 17.2 %. The richest institutions (over $1 billion in assets) did even better, earning 21.3%. One consequence of the growth is that institutions are having a hard time figuring out how to spend all the new money; endowment spending as a percent of assets dropped to 4.6%, the lowest rate since 1999. This will probably provide fresh ammunition to those in Congress and elsewhere who have proposed that institutions be required to spend a fixed percent of assets--usually 5%, the legal standard applied to many non-profits already. As Rich Kahlenberg said in the Wall Street Journal, "The price of college is rising and endowments are growing and people are frustrated by those two things going on at once."

On some level, the top schools are victims of their own success. As has already been widely reported, Harvard earned $5.7 billion on its endowment last year, which is by itself larger than the total endowment of all but a handful of institutions. This is the principle of compound interest in action--when you meet with a retirement advisor, they always show you the parabolic curve of expected earnings and point out that you make most of your money in the last 10 years. Universities have a longer investment time horizon than any other institution that currently exists, governments included, so it's no suprise to see their longevity paying off.

But all that money raises some uncomfortable questions, about the price of college as Kahlenberg suggests (it's no coincidence that Harvard and Yale timed the announcement of their new endowment-funded financial aid programs to hit the news in the weeks before the NACUBO report), and--more importantly, in my opinion--why, exactly, all of this is being subsidized by the government in the form of tax preferences for everyone involved. As Richard Vedder pointed out in the Post over the weekend, Princeton recently built a new residence facility, Whitman College (above), named after major donor and alumna Meg Whitman, CEO of Ebay, which cost a staggering $388,571 per unit, roughly what Donald Trump spends building a luxury resort. Here we have a fabulously wealthy person donating money to a fabously wealthy university to built a fabulously expensive facility for the benefit of students who come from, in many cases, very wealthy families. I have no problem with that personally if that's how they want to spend their money, but why am I, as a taxpayer, footing part of the bill?

Value-Added Comes of Age

About four and a half years ago, I was working on a policy paper focused on a developing and controversial method of measuring teacher effectiveness called "value-added." Created by Dr. Bill Sanders in Tennessee in the mid-1990s, the essence of value-added is pretty simple: Using annual standardized test scores, look at the prior achievement history of a given teacher's students and, based on that, statistically predict how well they're likely to do in the current year. Then calculate the ratio of their actual performance to the predicted performance. Teachers with a ratio greater than 1.0 are more effective than average, those with a ratio of less than 1.0, less. This gives teachers credit for making a lot of progress with previously underperforming students, and doesn't give them progress for coasting with previously high-performing students. Whatever external factors impact performance--poverty, family life, etc.--are implicitly controlled for, because the prediction model is based on the prior performance of the students themselves.

Around the same time, I was reading Michael Lewis's new book, Moneyball, which I had bought the day it was published, being a big fan of both the author and the Bill Jamesian approach to thinking about baseball. And at some point I realized that the underlying premise of Moneyball and the promise of value-added were the same: using empirical data to fundamentally change and improve a labor market. Instead of relying on human observations of characteristics, with all the biases and errors that result, focus on outcomes instead. The paper was released the following year, my first and only real contribution to the teacher quality debate, and while in retrospect I'm kind of embarrassed by the length, I think the ideas hold up pretty well. (The original draft included a whole section explicitly drawing the Moneyball parallel, but it was excised in the editing process, and yes, I'm still bitter.)

So it's interesting to see (I take no credit for this) the New York City school system announcing a plan to start calculating value-added scores for some of its teachers. Just like in Tennessee, the idea is pretty straightforward:

The city’s pilot program uses a statistical analysis to measure students’ previous-year test scores, their numbers of absences and whether they receive special education services or free lunch, as well as class size, among other factors. Based on all those factors, that analysis then sets a “predicted gain” for a teacher’s class, which is measured against students’ actual gains to determine how much a teacher has contributed to students’ growth.

What they're going to do with the data, however, is unclear. One option is to use it for making tenure decisions, which, research has shown pretty conclusively, is a good idea--it seems clear that if your value-added scores put you among the very worst teachers in your first few years--like the bottom 3%, say--the odds of you ever becoming a good teacher are quite low. As Harvard's Tom Kane notes, "It seems hard to know who is going to be effective in the classroom until they are actually in the classroom.

Or you could simply put the data out there and let market forces work. Deputy School Chancellor Chris Cerf said:

“If the only thing we do is make this data available to every person in the city — every teacher, every parent, every principal, and say do with it what you will — that will have been a powerful step forward. If you know as a parent what’s the deal, I think that whole aspect will change behavior.”

Crucially, this would be good for the best teachers. One of the biggest problems with the teacher labor market is that the top teachers--the ones who are one or more standard deviations above the mean in terms of effectiveness--are criminally underpaid, and have no way of demonstrating their real value to the labor market. Their unions, however, are totally aghast at the prospect. Randi Weingarten, head of the United Federation of Teachers (and rumoured to be next head the national AFT) said:

“Any real educator can know within five minutes of walking into a classroom if a teacher is effective."

This is the equivalent of the scouts and general managers in Moneyball who were always on the lookout for the "good body," the "five-tool guy," the player who just looked like a major leaguer. As everyone now knows, they were profoundly mistaken, and people like the Oakland A's Billy Beane were able to exploit the market distortions that resulted.

What we're seeing in New York City today is all the major challenges of 21st century K-12 teacher policy being played out in real time. Value-added methods are still very much in development, subject to limitations of standardized tests, among many things. But in the long run, there will only be more, better information about student performance, along with newer, faster ways of analyzing that information and drawing increasingly accurate conclusions about how well teachers are doing their jobs. At some point the methodological debates will be resolved and the margins of error whittled down the satisfaction of reasonable people.

That will have profound implications for the way teachers are hired, paid, trained, assigned--perhaps for the nature of the profession itself. Much current teacher policy is logically derivative of extremely limited or absent information--if we can't accurately measure teacher effectiveness, then pay everyone the same. If we can't know how well teachers will perform when they arrive in the classroom, throw up a lot of regulatory and process barriers to entry in terms of training and certification. The shift from information scarcity to abundance will change that logic, and eventually the policies themselves. New York City is a sign of things to come.

Update: Eduwonkette compares this to the infamous Tuskegee syphilis experiment, and then says she's not actually making the comparison she just made. The privileges of anonymity, I suppose. Sherman Dorn chooses a different horrible disease (botulism) to make his point--which is that the NYC value-added process may or may not have severe methodological flaws. It might, I don't know, I guess we'll find out. But, per above, methodological issues can be worked out, and anyone who thinks the hysterical reaction to the value-added initiative stems from a deep and abiding concern for statistical integrity is willfully not paying attention.

Update II: Dorn updates and points out that the "botulism" reference wasn't hysterical, fair enough, I was referring to the folks at UFT but that wasn't clear. He also says:

The claim that "methodological issues can be worked out" is evidence that Carey hasn't read the writings of professional researchers who point out that growth models are no holy grail.

I've read the research (which the UFT habitually misrepresents) pretty carefully. The people who've looked at the Sanders model have generally concluded that it does what it says it does: identify teacher effects, given appropriate caveats about statistical margins of error. It's true that they say it's no holy grail, which is unsurprising in that there's no such thing as a holy grail. There is not now nor will there ever be perfect information about teacher effectiveness; teaching is far too complicated for that. The only responsible approach to using value-added data--or any other data that purports to gauge teacher effectiveness--is to be cognizant of the amount of likely error and craft policies accordingly. And of course there should also be diligant work to improve the methods themselves, which nobody believes have reached an apex of refinement.

Given that, a fair response to the NYC announcement would be something like this: "We support efforts to fairly evaluate teacher effectiveness and recognize that objective evidence of student learning growth must play an important role in that process. We emphasize that the results of evaluation methods based on standardized test scores will be subject to significant degrees of statistical error, which much be appropriately taken into account, particularly when such information is used in the context of employment matters such as tenure and compensation. The best process will combine information from multiple methods, including peer and principal evaluation, and will preserve teachers' professional rights. We look forward to working in concert with management to develop such policies, which should include rewarding the most effective teachers for the vital work they do."

The actual response from the UFT was nothing like that. Rather, it reflects a principled opposition to the use of test scores of any kind in evaluating teachers. Again, this is not an argument about methodology; it goes much deeper than that. Talking about methods in a good faith attempt to reach the goal of better information is one thing, but the holy grail standard is all about making perfection the enemy of the good.

Wisconsin, Cyberschools, and Virtual Schooling

The publicity following a recent ruling by the Wisconsin Court of Appeals ordering the state to end funding of the Wisconsin Virtual Academy, a full-time virtual charter school operated by the Northern Ozaukee School District (just north of Milwaukee), is helping to reinforce the public misconceptions around virtual schooling. Take, for example, this breathless lede in Friday's AP story:

School districts across the United States are watching a court ruling that challenges the existence of virtual schools and could determine the future of online education.

Don't believe the hype and don't think that all virtual schooling looks like Wisconsin Virtual Academy. Many people think that "cyber" charter schools, schools that are responsible for students' entire education experience and that students attend full-time, are the primary sponsors of online learning. But, the majority of students learning online participate in "supplemental" virtual schooling programs. These supplemental programs, many state-run, allow students to take online courses in addition to their regular school-based courses.

The AP story and much of the discourse surrounding the Wisconsin decision confound the ideological and political controversies that surround cyberschools with virtual schooling in general. Despite their growth and popularity, full-time cyberschools are highly controversial—a result of their non-traditional approach to learning, their status as charter schools, the transfer of student funding away from traditional schools, and their enrollment of former home-school students. Many unions, especially state and local- level affiliates, have vehemently opposed cyberschools.

Not only is the story above factually incorrect (the law in question is a very specific Wisconsin state law—Colorado, for example, just recently passed its own cyberschool legislation), but it narrows all of online learning to the cyberschool model. This is particularly dangerous because many of the practices found in supplemental virtual schooling programs are bringing about reforms that have long eluded traditional public schools and prompting educators and policymakers to question and change key components of our traditional, classroom-based public system. Limiting the discussion of virtual schooling solely to cyberschools equates virtual schooling with home schooling and bounds the possibilities of online education into the constraints of polarized, non-productive and ideological education battles.

That said, proactive state legislators across the country should take note of the Wisconsin case. Many states' laws, like those in Wisconsin, need to be modernized to reflect an education system that is no longer defined by bricks and mortar schools, seat time, and strict geographic lines. These legislators should heed the lessons of the charter school movement and craft strong laws that provide the regulatory and accountability framework needed for all forms of virtual schooling within the public system.

Specifically, cyberschool options should exist to help serve the vast variety of student and family needs. It's ok for different models to serve different students with differing needs to ensure each of them is successful—that's called personalization.

The key issue is really around public funding. Funding should follow student success and not penalize innovation or efficiency. But, let's also make sure to weight the public funding so that it is sensitive to what the state is actually buying. Many cyberschool models have very limited student/teacher interaction, rely heavily on parents as educators, and are less likely to serve special needs students or those without a stay-at-home parent. With weighted funding, some cyberschools would receive less money. But, more money could also follow to cyberschools that can demonstrate success serving students with higher needs. The more sophisticated conversation is not about whether cyberschools are good or bad, but what role they play in a state's various educational priorities and how the funding follows those priorities.

Funding Gaps

The Education Trust released its annual state report, The Funding Gap, which looks at funding trends from 1999 to 2005 and compares district funding for those serving the highest percentages of poor students and students of color and those serving the lowest percentage of these students. Winners include 10 states that narrowed the gap between funding for low and high-poverty districts: Alaska, Arkansas, Connecticut, Minnesota, NJ, NY, New Mexico, Ohio, Wyoming and my own Maryland. Maryland, btw, along with Ohio and Wyoming, not only closed their gap but reversed it and now provides more funding to high-poverty districts. Losers? Illinois, Florida, Texas and more than a dozen more states where the funding gap actually increased from 1999 to 2005. That's right smack in the middle of our strong accountability era, where all school systems are pressed to meet standards for all students. How can we have school financing policies that are so in conflict with this accountability standard? It seems to me that aligning our accountability and finance systems should be a basic must-do.

Also good to note that EdTrust has added an important new piece of analysis to their annual report. Carmen Arroyo, the author of the report, crunched the numbers on percentages of English Language Learner students and found that in the eight states with the highest percentages of ELLs, districts with a lot of ELLs receive less funding than districts with few or no ELL students (I'll have to ask Carmen how many districts in the top ELL states really have no ELL students? Few, I'll bet). This type of ELL analysis is a key addition, as this population of students promises to grow not only in those high-ELL states but in most others too.

The Wire, Season Five, Episode 3

Summary: McNulty successfully fakes evidence of a Baltimore serial killer, yet nobody cares. Lester explains that he's failed to include the kind of lurid psycho-sexual element that will bump the story onto the front page. Bunk is increasingly (and amusingly) aghast. Prop Joe gives Marlo money-laundering lessons. The Sun's parent company hands down a new round of budget cuts, forcing the closure of all foreign bureaus and firing / buyout of veteran reporters. The Fabulist makes up some more stuff while acting like even more of a snot. Burrell tries to feed Carcetti fake crime stats, not realizing that Valchek gave the mayor the real stats first, so Carcetti sets the wheels in motion to can Burrell and replace him with Daniels. Clay Davis continues to feel the heat. I think I could watch a whole hour of nothing but Clay Davis. Michael begins to conclude that certain aspects of working for the Marlo organization--such as working seven days a week on the corner and being asked to murder small children--aren't so great. Method Man gives up Butchie to Chris and Snoop, who promptly torture him (Butchie) to death in an effort to smoke out Omar. He was indeed a tough old man. Snoop continues to question the wisdom of the "provoke the baddest man in Baltimore into trying to kill us all" strategy. Omar, blissfully on vacation in the Carribean with his boyfriend, hears the news about Butchie. Duh-duh-DUH!!!!

This episode continues the proud Wire tradition of constructing scenes that assume you've studied every scene in every episode with Talmudic intensity, like when Daniels and his ex-wife fret about Burrell possibly revealing old allegations of Daniels doing something vaguely corrupt back when he was involved in drug investigations, before the show even began. I can't remember the last time this fact was even mentioned, and its never been clear to me whether the allegations are even true, but nothing is ever forgotten on The Wire, because it's all connected. Bonus: Pearlman grilling Clay Davis' driver about the $20,000 he got caught with all the way back in Season One.

Now that Omar has reappeared, the most signicant characters yet to show up are, in no particular order:

Cutty
Prez
Bunny
Namond
Randy
Poot
Royce
Brother Mouzone

Episode three seems like as good a time as any to put The Prop Joe Question on the table. To wit: the "prequel" webisode featuring Joe is dated 1962, where he looks to be about ten, give or take. That means Joe is now roughly 55 years old. Allowing for time to work up through the ranks, etc., he's been seriously in The Game for 30 years, minimum. Joe, more than anyone else on the show, has figure out the two essential truths of The Game, and their resulting corollary: 1) Making money is the easy part. 2) Staying alive and out of prison is the hard part. Ergo, the smart play is: Whenever possible, trade money for a reduced risk of being imprisoned or killed. But even given the resulting reduced income, Joe must be fabulously rich; heroin has been in Baltimore since the 70s and crack since the 80s. As we learned this week, to nobody's surprise, Joe knows how to launder money into offshore accounts. His position as the middleman betweent The Greek and the rest of the Co-op members must be extremely lucrative, I assume he's the equivalent of "The Bank," the position Stringer Bell was shooting for before he got shot. Yet Joe must also know that while he can reduce the odds against him, he can't ever eliminate them entirely. Eventually he'll roll snake eyes and get caught in the Marlo-Omar crossfire, or something along those lines. You can have a short run, or you can have a long run, but only The Game remains.

Given all that, what the heck is Proposition Joe doing in East Baltimore? Why does he spend all day in the back of a repair shop in his ratty hoody, dressed liked Kevin Smith, while bad men with guns come and go? He's a smart guy -- why not learn French and retire to Antigua? I don't get it. I suppose the only plausible explanation is that he just enjoys The Game for its own sake. Sam Zell is pushing 70 and has $6 billion, yet he's busy buying media companies, screwing around with Wrigley Field, and imposing real-life cost cuts on newspapers like the real-life Baltimore Sun. Same principle, I guess. The only other explanation is some kind of horrible last season retcon involving numerous heretofore unmentioned losing trips to Atlantic City and Vegas, a la The Sopranos, but I think David Simon is too smart for that.

A Faulty Argument

Back in December, I blogged about a proposed Higher Education Act provision that would change the way default rates are calculated by the Department of Education. I hypothesized that this change could increase default rates by about 60 percent, putting some schools at risk of losing their eligibility to participate in the federal loan program because of too-high default rates -- if a school has a default rate of 25 percent or higher over three years or a single-year default rate of 40 percent or higher, it loses eligibility to participate in the federal loan program.

The proposed change is pretty simple. Currently, the Department of Education calculates the student loan default rate as the percent of students defaulting on their student loans in the first two years after entering repayment. The proposed change would extend that window to the first three years after entering repayment. But, as we showed in an October Charts You Can Trust, the percentage of students defaulting on their loans grows considerably with each added year, particularly among students with high amounts of debt.

And now, as Inside Higher Ed reports, the Department of Education released numbers showing that for-profit colleges would see their default rate double on average, and other institutions could see their rates increase by between 50 and 75 percent (check out the article for numbers broken down by institution type). Not surprisingly, for-profit colleges are not happy about this change and are trying their best to resist it.

The Career College Association is quoted as saying, “This is a questionable policy metric because community colleges, proprietary schools and minority serving institutions all accept a much higher percentage of lower income students than do traditional schools, and many have a higher [Cohort Default Rate] as a result. The single best predictor of a student’s likelihood of default is the student’s own socioeconomic status.”

Sure, socioeconomic status impacts a student’s risk of defaulting on loans and students should definitely be held responsible for responsibly managing their debt. But colleges have a responsibility to equip students with the skills and knowledge needed to get the jobs that allow them to repay their debt, and for ensuring students graduate on time -- or at all. And schools are also responsible for ethically counseling students on the amount of debt they can realistically undertake for their education and for providing adequate financial aid so that students are not graduating with overly burdensome debt loads. All of these actions are entirely within a college’s purview and would have a large impact on the percent of students defaulting on their loans.

Also, take a look at the Department of Education cut-off default rate numbers: 25 percent default rate over three years or a 40 percent default rate over one year. Is a college that consistently allows one in four of its students default on their loans in the first three years (in reality, two years*) after leaving college really providing a valuable service that the student and taxpayers should be paying for?

* Because it takes nearly a year after a student stops paying on his or her loan for the loan to technically be considered in default, a three-year window is really a two-year window, and a two-year window is really a one-year window. In addition, students with loans in deferment or forbearance are counted as being in repayment.

Crackonomics

On the whole, I'm sympathetic to DC Schools Chancelor Rhee's intiative to shutter 23 DCPS schools. It doesn't make sense for a district that's experiencing long-term enrollment decline, including losing almost 30 percent of students to charter schools, to waste millions of dollars on maintaining a bigger physical infrastructure than it needs. The chancellor and Mayor Fenty had a series of neighborhood meeting yesterday to discuss the planned closings, with many of the attendees voicing their displeasure. And I have to say, while I don't actually agree, this is pretty funny and astute:

"It's like crackhead economics," Jarumi Moore, a Francis Middle School seventh-grader, said at the Wilson Building of the closings plan. "They're thinking short term. We're thinking long term."

Get that kid into an AP econ class! He can write a study calculating the marginal change in the implied discount rate people apply to the resale value of their personal possessions when selling them feed a crack habit at various stages of addiction, and compare that to long-term deadweight loss of public goods resulting from ill-advised education policies that pump up approval ratings at the expense of systemic reform. He'll be the next Roland Fryer. Seriously, I don't think I would have had anything nearly so clever or smart to say in the 7th grade about anything not involving comic books or Larry Bird; there are a lot of bright kids like this in DCPS and we need to get them a better education.

Harvard and the Myth of Tightening College Admissions

The New York Times reports today that applications to Harvard are up an amazing 19% over last year, with other elite schools like the University of Chicago, Amherst, and Northwestern seeing double-digit increases. This allows newspapers to get a jump on the annual circulation-goosing college admissions panic story, which usually doesn't run for another few months, when the same colleges will report record low percentages of student being admitted. So we don't have to wait until April to read some guidance counselor from a suburban high school breathlessly reporting that among his peers "There is a pure level of panic and frenzy like they've never seen before."

As I wrote here last year, and also at the American Prospect, there is less here than meets the eye. The Times reports, correctly, that the number of graduating high school seniors is now reaching a demographic crest, the largest in history. But the year-over-year percentage growth is quite small, nothing close to the double-digit rise in applications to Harvard et al. Similarly, there's no reason to the think that the percent of high school seniors applying to college has risen sharply; those numbers never change much on an annual basis.

What we have, then, is not a big increase in college applicants but a big increase in college applications. Which the Times acknowledges, quoting one consultant as saying, "There was a time when kids applied to three or four schools, then to seven schools, and now, 10 or more is not uncommon." This creates the impression that the odds of a qualified student getting into a good college are dropping faster than they really are.

For example: the article notes that Harvard (as well as Princeton and UVA) has ended its early admissions program. So let's say you're a super-qualified student. You want to go to Harvard, and Harvard wants you to attend. Previously, you would have submitted one application, via early admission, and received one acceptance. Now you've got to go into the general application pool along with everyone else.

Do you still submit just one application? Of course not. Applying comes at relatively little cost in terms of time and money--particularly to you, who are probably from an upper-income family. There's a common application, stuff can be submitted electronically--it's all easier than it once was. So you apply to Princeton, Yale, and most of the other Ivy League schools, along with a few other usual suspects like Chicago, Amherst and the rest. Why not? Harvard's not a lock, after all, you might get bumped for a senator's son, rich legacy, football player, or what have you. A few months pass, and the envelopes arrive. Some of the schools accept you, others don't, but you get into Harvard, and happily enroll.

Q: Under this scenario, what impact has Harvard's elimination of early admission had on the odds of a qualified student getting into an elite school? A: None whatsoever. The number of applicants didn't change, the number of slots didn't change, and the result for the hypothetical you was exactly the same: Harvard. But from the perspective of typical news coverage, it looks like admissions got tighter, because all of those new applications you sent to elite schools drove the total number of applications up, and thus admissions rates down.

It's true that by applying and being accepted to those other schools, hypothetical you gained acceptances that would otherwise have gone to someone else. But you didn't use them, so eventually it all comes out in the wash. Selective colleges set very specific goals for the size of their freshman class, which they meet by statistically estimating the percent of accepted applicants who are likely to enroll. If they miss their guess high, they squeeze a few more people into the dorms. If they miss their guess low, they take a few more people off the waiting list. Either way, the number of individual students who are ultimately admitted doesn't change.

Also: this discussion pertains to qualified students, those with the credentials to have a legit shot at getting in. Some significant percentage of applicants--and thus, some percentage of the 19% increase in applicants at Harvard--are unqualified, submitted by students who are treating the college admissions process like Powerball and have no chance of being admitted. An increase in the number of applicantions from unqualified applicants has no practical effect on the admissions process at all for the qualified student--but it seems to, by driving down the bottom-line admit rate number.

This doesn't mean that the increasing-applications phenomenon has no impact on qualified students. If your competirors are submitting more applications, you need to as well, just like you need to keep up with taking AP classes and accumulating the other current markers of achievement. But in the end, you're still you, they're still them, Harvard is still Harvard, and things haven't gotten as bad as you think they have. When the media tells you to panic, don't.

Ask And You Shall Receive

Last week, I asked whether there were any colleges with unique strategies for controlling tuition and aiding students, but without the help of a gigantic endowment. Lo and behold, Inside HigherEd reports on Blackburn College, a small, private college in Illinois (chances are this school is off the NYT’s radar), that is trying to do something different with tuition and financial aid.

Blackburn College announced that it is both lowering tuition and getting out of the tuition haggling game. Basically, it’s lowering its sticker price by 15 percent but also going with a CarMax-type policy of not bargaining with parents over financial aid packages. A big plus to this new policy is that parents and students know the true cost of Blackburn, even before they apply. And this combination of lower tuition and lower spending on financial aid means that the school won’t be losing any tuition revenue, so the bottom line for the institution stays the same. But what about the bottom line for students?

Blackburn believes that the tuition--$15,000 with room and board—is affordable for low-income students, so long as the students get federal and state aid. If a student received a full Pell-grant and the full amount of Illinois’ need-based grant program the out-of-pocket cost for Blackburn would be approximately $6,000. Not bad, although that still means potentially graduating with over $20,000 in debt. And loans, while they are grouped with grants as part of an aid ‘package’, need to be paid back and aren’t nearly as good at facilitating access to college (CarMax doesn’t say it offers financial aid to buy a car). But loans are an excellent way to facilitate choice—students can opt for a private college instead of a public one, or a four-year instead of a two-year. But how can we know how much debt is too much debt?

The larger problem with financial aid policy is that there is no consensus over what the ‘right’ amount of debt for students is, or how much people should be expected to contribute to their own education. We need a goal—some strategic planning, if you will—for our financial aid system. Is the goal to help low-income students attend any college they like? To help them attend a public, four-year? A two-year? Or to facilitate choice in colleges among everyone, even those that are from upper-income families?

Until we answer these questions, our financial aid policies will always feel like a shot in the dark

Lede of the Day

"Free stuff makes people happy, but free stuff shot from cannons makes them jump and cheer like crazed monkeys."

From an Eric Hoover piece($) in The Chronicle of Higher Education, about a guy who owns a company that makes those portable CO2 cannons that launch rolled-up T-shirts in sports stadiums and arenas across the land.

Teaching Isn't Selling Sporting Goods...Or Anything Else

While we're on the subject of how teacher pay compares to other professions, another issue that often comes up in the debate is the fact that many teachers nominally work less than an eight-hour day, since the average school day is about 6.7 hours long. The usual rejoinder from the teacher perspective is that good teachers put a lot of time in before and after the school day, which is certainly true. The response to that is that lawyers and accountants and other professionals also do their share of work on nights and weekends. Then both sides start snarling at each other.

But what gets less talked about less is the way those hours are spent. I've worked in a variety of jobs since finishing grad school in the mid-90s, both in the public and non-profit sector, the basic components of which are pretty much the same: reading, writing, analyzing numbers, talking on the phone, sending email, going to meetings and events. Before that, stretching back to high school, I worked as a lifeguard, construction worker, department store cashier, waiter, sporting good salesman, camp counselor, etc. All different jobs.

But one thing they all have in common is that you're not actually working every minute of the day. For example, betwen the time I typed the words "the" and "words" in this sentence, I got up, poured a cup of coffee, chatted with a co-worker, and then spent another five minutes reading about how the Wizards somehow beat the Celtics again last night, in Boston no less. To the outside observer, I was working continuously, but actually it ebbs and flows, and this has been true on some level in every job I've ever had.

Spend some time in the classroom of a good teacher, by contrast, and you'll quickly notice that they're working the whole time. Not most of the time, but all of it. That's what it takes to succeed; you have to be constantly paying attention, planning, reacting, making decisions, keeping the whole intricate complex process on track. Somehow this needs to be taken into account in discussions of how much teachers work.

Pay for Performance: Chicken or Egg?

AFTie Ed responds to this post below on teacher pay:

My baseline position wasn’t “we’re not in this for the money, give us more money.” Instead it’s “we don’t have the option of being in it for the money, and trying to introduce that option without making the pie bigger isn’t a smart idea.” What I was trying to argue is that we don’t have in place one of the essential preconditions to having an effective variable pay structure: adequate base compensation...As a result, you get a system where people are being driven to a large extent by the intrinsic rewards of the work, and by the external rewards that come from a kind of cult of teacherdom. I don’t know if it’s chicken or egg, but uncompetitive pay is a factor keeping this dynamic in place.

There's an active argument going on about whether teachers are or aren't underpaid, involving lots of dueling statistics about benefit levels as a percent of salary, the number of hours worked in and out of school, which professions are fairly comparable to teaching, and whether or not a 9-month job with no vacation is really just 3/4ths of a 12-month job with vacation. But I don't think it's actually all that relevant to this discussion. I'm perfectly willing to concede that given stakes involved, and the amount of training, experience, and hard work required to do a good job teaching, public school teachers aren't paid enough, by a significant margin. And it's abundantly clear that individual teachers haven't proportionately shared in the overall growth of the economy over the last 30-plus years, in terms of salary.

That said, insisting that "adequate base compensation" be a prerequisite for pay for performance is, functionally, the equivalent of being against pay for peformance. Raising the total amount of money going to teachers salaries without changing the way teachers are paid would seem like--and to a large extent, would be--investing tens of billions of dollars in the same illogical system with nothing concrete in return. That's why NEA's call for a $40,000 base salary for all teachers, to take one example, is utter fantasy. You can say this is unjust, and you can be right, but that's the way it is. Policymakers have been blithely ignoring calls to substantially raise base tacher pay for decades now and will do it for decades more if nothing changes.

The best and most plausible strategy to increase total teacher pay, therefore, is not to raise the floor, but the ceiling--create a methodologically sound system for evaluating teacher effectiveness, in conjunction with labor, and then send the new money to the most effective teachers. Policymakers would go for that, really they would--instead of more $40,000 teachers, more $140,000 teachers. I know the "methodologically sound" part is tricky and subject to debate, but this is not an unsolveable problem. (Look for more from ES co-director Tom Toch on the subject of teacher evaluation soon).

I also note that class size reduction, heavily favored and promoted by teachers unions, is on some unavoidable level at odds with the adequate base compensation agenda. There's only so much money; every dollar spent on hiring more teachers is a dollar not spent on paying indiviudal teachers more.

The Wire, Season Five, Episode Two

I watched this episode On Demand in the middle of last week, and I have to say it was unsettling to listen to Saint Gus of the Newsroom talk about how life is always tough for Mother of Four, and then listen to characters lament that the only time Baltimore makes national news is when multiple bodies are discovered rotting in a rowhouse in the poor section of town, and then pick up the newspaper the next day and read about how, allegedly, a deranged, down-on-her-luck mother of four killed her daughters and left them to rot in a rowhouse in the poor section of town, which was soon covered on national news. DC the nation's capital is in the news every day, but DC the troubled, mid-sized mid-Atlantic city? Pretty much only with stuff like this.

Episode Summary: Bubbles is troubled. McNulty staggers up to the edge of the deep end, peers over, takes a swig of Jameson, and jumps off. With the investigation down, Marlo quickly resumes having everyone and their mother killed, up to and including that guy who the other guy said looked at him funny back in '93. He's also trying to cut out the middleman on the package and go straight to the Greek, which leads him to...Avon! Hey, Avon. He looks just like he should, the same but more weary, fronting as best he can. It's funny how the universe of Baltimore murderer / drug dealers sort of arranges itself on a purely relative scale--Marlo is such a dead-eyed sociopath that by comparison Avon seems somewhat reasonable, Prop Joe is Santa Claus, and Omar is an avenging angel. Or he would be, if he actually made his way on screen.

Saint Gus, meanwhile, has to deal with his very own Jayson Blair, who can't even squeeze a decent human-interest story out of opening day at Camden Yards. (Aside: It always seemed strange to me that the Jack Kelly fabrication scandal at USA Today received far less attention than the Blair affair, even though Kelly's fabrications were arguably much worse. Relative standing of the papers, I suppose.) Gus' boss, meanwhile, wants to run a prize-bait expose of the school system, one of those series that kicks off Sunday morning with a little box showing the chapters to come (Monday: "Everything is Bad." Tuesday: "Then it Gets Worse"), with each story jumping from page one to a full two-page spread that you feel vaguely guilty for not reading. Gus argues that, sure, the school system is terrible, but so are lots of other things, and shouldn't we tell the real story, the whole story? Or something like that. The Bad Editor says no, we need to dumb it down so people can understand.

Now, I have no doubt that conversations like this happen all the time, complete with facile use of the word "dickensian" and all the rest. But what David Simon Saint Gus seems to be arguing is that anything other than digging deep and exposing the entire underlying system, complete with all the connections and moving parts, is a moral failure and a lie. In other words, the only truly responsible journalistic treatment of Baltimore is...The Wire. Really? I think I disagree. The best treatment, maybe, but that's a helluva high bar. It takes, what, seven years and tens of millions of dollars? What happens in the meantime? If you can pick off a piece of the problem, expose it, and do something about it, what's the argument against that? Or are the children of Baltimore doomed until the revolution comes?