Miserly Colleges

Lynne Munson of the Center for College Affordability and Productivity turns in a thought-provoking op-ed at Inside Higher Ed today. She takes colleges to task for hoarding vast sums of money in endowments while still charging students high tuition rates:

Stanford University spends $76 million on undergraduate financial aid, a sum that sounds generous but amounts to a mere 0.5 percent of the value of its endowment. The university spends just 4 percent of its $14 billion endowment toward operating expenses. If the 5 percent payout rule required Stanford to spend another 1 percent of its endowment, and that money was directed toward financial aid, students would enjoy $211 million in additional support. That is precisely the cost of letting all 6,600 Stanford undergraduates attend tuition-free.

With all the talk in Congress about how much money loan companies (including “non-profit” loan companies) are making off of student loans, it might be worth also taking a look at how colleges spend their endowments. As Munson points out, taxpayers are helping to fund the federal grants and subsidized loans that allow many students to afford the high tuitions at these institutions (and allow these institutions to charge such high tuitions). Meanwhile, donors receive tax breaks for adding to these large endowments. It’s worth asking what the public is really getting out of this deal.

The Onion, Predictably, Sees the Truth

From a story in this week's Onion (Interestingly, not on-line yet, another reason to be psyched they're publishing the print edition in DC now):

New Theories Suggest Kennedy Wasn't Shot - A controversial new book about the assassination of President John F. Kennedy has raised questions not about the role of a lone gunman or a conspiracy of shooters, but about whether the late president was even shot at all.
While the book, Outside the Crosshair, does not dispute the fact that a massive portion of Kennedy's skull was separated from his head during the 1963 Dallas visit, it maintains that the president suffered fatal explosive-cranial trauma through means completely unrelated to gunshots.
"Certain extreme force was involved in this tragic death," said Dr. Horace Musashi, the book's author and professor of computer science at Mount Union College in Alliance, OH. However...Musashi favors an explanation known as the single-massive-spike-in-blood pressure-theory. After 11 years of painstaking research, Musashi uncovered testimony from anonymous eyewitnesses who claimed that unopened packets of duck sauce and soy sauce were hastily removed from Air Force One..."

The crucial detail is that Musashi is a college professor. Despite the democratization of access to information and expertise, it's still the case that society bestows considerable--albeit undifferentiated--intellectual status on university faculty. As long you have a PhD in something and faculty appointment somewhere, you get a significant added presumption of knowing what the heck you're talking about--if even if what you're talking about has nothing whatsoever to do with your training and field of study.

Not that this is altogether a bad thing, it's good to maintain academic standards and credentials in era where simple assertion of expertise is easier than ever before.

But it has the negative byproduct of lending undue credence to Harvard psychologists who believe in alien abduction, BYU physics professors promoting wacky 9/11 conspiracy theories , University of Minnesota philosophers who see sinister government plots behind the Kennedy assassination and 9/11 and the death of Paul Wellstone, etc. etc.

Churchillian Speech

Ward Churchill was fired by the University of Colorado yesterday because he said that the maintenance workers and secretaries who were burned and buried alive in the World Trade Center on 9/11 were a bunch of Nazis who had it coming. The official reason for the firing was academic misconduct, which has the ACLU in a snit. Churchill's speech, they said was "protected by the First Amendment and cannot serve as a legal basis for any adverse employment action."

I'm a card-carrying member of the ACLU and close to a free speech absolutist, but in this case I don't buy it.

For various reasons including limited resources and the need to maintain an atmosphere of collegiality and trust, universities can't go around conducting in-depth investigations into the scholarly conduct of every professor on campus. But they certainly have the right to do so on a case-by-base basis, and it seems more than fair to assume that a person so deranged that he can't see the distinction between the perpetrators and victims of monstrous crimes against humanity might also be a less-than-scrupulous scholar. Sure enough, that's what they found.

The ACLU seems to be saying that liars and plagiarists can innoculate themselves against the consequences of their actions if they can manage to offend enough people to bring scorn and infamy upon themselves and the university that employs them. Plus, who thinks that if Churchill had, for example, been publicly espousing the principles of Nazism--rather than simply ascribing them to innocent victims of terrorism--he'd still have a job? Of course not, because he never would have gotten his job in the first place. Nobody is saying Ward Churchill should be arrested for saying what he said, just that no decent institution of higher education should pay him to do so.

All Competition is Not the Same

Ezra Klein critiques a recent WSJ op-ed$ about income inequality and the return on human capital from Cato's Brink Lindsey, which concludes:

Those interested in reducing meaningful economic inequality would thus be well advised to focus on education reform. And forget about adding new layers of bureaucracy and top-down controls. Real improvements will come from challenging the moribund state-school monopoly with greater competition.

Ezra says:

Responding to that sort of despair by trying to break the teacher's unions is truly an astonishingly narrow and inadequate solution

I don't put any stock in Cato's voucher-mania, but it's a mistake to assume that every call for more competition in education, challenging the monopoly, etc., is necessarily about breaking teachers unions. For an example, look no further than today's front-page New York Times story about former Democratic fundraiser and Rock the Vote founder Steve Barr, who's challenging urban school districts by opening new charter schools with unionized teachers. Barr says, "If the district doesn’t work with me, I’ll compete with them and take their kids."

The point being, while one could probably accurately surmise that Lindsey wouldn't mind breaking teachers unions, its perfectly possible to accomplish what he advocated for in a pro-union context. Not all attempts to introduce competition into the education system mask a dastardly anti-labor agenda. Plus, given that most serious education observers--left and right--agree that many school systems suffer from moribund bureaucracies in need of reform, implicitly putting unions on the wrong side of that argument isn't doing them any favors.

Doing the Math on Borrower Benefits

As the financial aid legislation in both the House and Senate have moved forward over the past couple of weeks, lobbyists for loan companies have been going full throttle trying to derail efforts to cut subsidies to lenders. They are even using the new legislation to intimidate borrowers into consolidating their loans—my mailbox has been inundated with letters from loan companies threatening rising student loan costs because of the proposed legislation (there have been plenty more since this).*

A recent advertisement in The Politico by the “Campaign to Reform Student Loans” highlights one of their most popular arguments, that the proposed subsidy cuts will “wipe out the interest rate discounts currently available to borrowers.” And then they give some scary calculations: a student with a $20,000 loan will pay an additional $5,000 over 20 years as a result of this legislation, and a student with a $60,000 loan will pay an additional $38,000 over 30 years.

And this is true. A very, very small percent of students would end up paying more on their loan over the course of repayment without these borrower benefits. But, according to FinAid.org—a great source of independent information on financial aid—less than 1 in 29 borrowers will see the full discount from these borrower benefits.

The most common benefits are a .25 percent discount on the interest rate for automatic debit payments and a 2 percent interest rate discount for 48 on-time payments. But less than 15 percent of students sign up for the direct debit, and less than 10 percent qualify for the on-time payment discount for the entirety of their loan. It is not easy to make 48 consecutive on-time payments, and if a borrower misses just one, he or she loses the benefit for the life of the loan.

FinAid writes:

A review of lender SEC filings reveals that the combined cost of all the discounts, including the direct debit and prompt payment discounts, averaged less than 10 basis points (0.10%) over the past decade. That's less than 5% of the nominal "full" 2.25% discount and less than $50 per borrower on average.

Using FinAid’s handy loan discount analyzer, a student with a $20,000 loan that gets the direct debit discount and has a 1 in 36 chance of being late with a payment (a much more realistic expectation) could expect to save $592. For the student with $60,000 in loans, it would be around $1,700. A much lower benefit than loan company lobbyists advertise.

Beyond the mathematics of loan discounts, it’s worthwhile to think about the lenders’ argument: that they should receive more in subsidies so that they can then pass some of the money along to some students as discounts. In essence, lenders are asking for a smaller cut to their subsidies because they want to act as middlemen for this money.

But wouldn’t it make more sense for Congress to just give this money directly to students, either in the form of interest rate cuts or increased grant aid?

* Lenders are interested in getting students to consolidate before the legislation takes effect because, if this legislation works like past changes to subsidy rates, lenders will be able to collect the old, higher subsidy rate for the life of the loan on any loans consolidated before the new subsidy rate takes effect.

Maverick Leads Charge

For those of you intrigued by today's front-page NYTimes story on Steve Barr, the guys who's shaking things up out in L.A., Education Sector was on the story a year ago with this report.

Compacts & Contracts: A Colorado Case

The National Governor’s Association released a report over the weekend calling on states to implement compacts with colleges and universities. It’s a growing trend in higher education, and it deserves a closer look.

The most innovative higher education funding scheme comes from Colorado. In 2005, the state began allocating higher education money based on a student-stipend program called the College Opportunity Fund. Money follows in-state undergraduates to their chosen institution. Students complete a short application in order to be eligible, and the stipend is good for only 145 credits. All stipends to public institutions are equal, and privates get about half that amount. Every institution that opts to participate must agree to a performance contract with the state. The state may purchase fee-for-service contracts for graduate schools, rural education, economic development services, and dual enrollment programs.

Advocates argued the stipend program would increase college attendance for traditionally underserved populations. They argued these students and families suffered more from lack of information about the affordability of higher education than from actual financial limitations. Publicizing the stipend as a use-or-lose system would theoretically address this problem. Accountability schemes in higher education struggle with the principal-agent problem--who exactly is the “client,” students or the state? By setting all stipends equal and allocating funding entirely based on student enrollment, the state has effectively said students are.

National CrossTalk published an in-depth look on Colorado’s stipend program last winter, and they found some things working and some not: the 145 credit limit appeared to be pressuring students to complete college quicker, colleges had almost immediately raised tuition levels to compensate for years of inadequate funding, and the fee-for-service measure had been implemented in such a way that state funding levels remained almost exactly constant. Most important to the program’s success, although current students failed to comprehend the reason for the change, students as young as eighth grade are already registering for the stipends.

Choice requires information, and there will not be symmetry in who has it. Part of the state’s role, then, should be to inform the consumers of their options, or mandate the producers (universities) provide enough data for real choices. That doesn’t appear to be happening. Another gaping hole in this design is that it is entirely state-based. Institutions have no incentive to attract international scholars or high-caliber students from other states, because they’ll receive $0 for enrolling these “clients.”

Before switching to performance contracts with individual institutions, Colorado had a performance-based funding mechanism in place. About 2% of the total general funds in FY2001 were allocated to the governing boards based on performance results. Moving away from this funding scheme to a contractual system means the accountability mechanism has shifted from (admittedly limited) financial consequences to legal ones. The devil is in the details, and we’ll have to wait and see how enforceable the four-year contracts turn out to be.

Contracts are not a panacea. More states should experiment with various accountability tools to better manage this country’s higher education institutions. Kudos to the NGA for featuring various state attempts to do so.

The Box Theory

I am a product of the blue box theory of American History. Flipping through my 10th grade U.S. history text book, it is impossible to ignore the takeover of the special interest box: little blue boxes, outlined and shaded, each one condensing minority perspectives and contributions into half a page or less: Women in the civil war, Immigrants and the railroad.

This weekend, the blue box theory struck again.

The Israeli Education ministry announced Sunday that Israel’s war of independence will now be referred to as a “catastrophe” for the state’s Arab population. A New York Times article notes:

Ms. Fenig, who is the national supervisor of homeland, society and citizenship studies, said, “Pedagogically, it is not right to hide facts and ignore Arab sensitivities if we want to live together and build something in common.”

Though applaud Ms. Fenig’s commitment to marginalized views, I cannot help but wonder if this is an impossible task. Can history text books ever succeeded in incorporating all sides into a coherent narrative, or will minority history never encroach further than boxes?

Flexing Our Way Towards Reform?

Just like during NCLB’s creation, the issue of local control over federal dollars is brimming to the surface again. While far less sexy than highly effective teachers or growth models, flexibility may be another looming battle in the fight over if/when/how to reauthorize NCLB. Recently, Representative Howard “Buck” McKeon introduced the State and Local Flexibility Improvement Act, designed to give state and local officials more authority over federal dollars. In describing the legislation, McKeon used the ever-popular federal-government-ruins-everything refrain in advocating “removing Washington constraints on federal dollars.” The bill proposes expanding flexibility authority for states and local school districts to use federal funding in ways that better match their needs.

Sound familiar? NCLB had four new provisions that provide for this exact type of flexibility. What’s happened since? A new series of reports from the U.S. Department of Education looks at participation rates in each program and how and why districts use (and don’t use) the various provisions.* The newest Education Sector Chart You Can Trust analyzes how these provisions have been used and why participation has been lower than expected.

Interestingly, rural districts have the highest participation rates. These small districts get very small allocations under some Title programs and pooling those funds for other purposes makes a lot of sense for them. Other districts are not quite as enthused with flexibility. Only 16% of districts report using Transferability, a flexibility provision available to all districts. And even fewer districts—one to be exact—used the new Local-Flex program, which was intended to provide even more flexibility to districts.

The reasons that participation isn’t higher vary-and some have to do with uneven implementation and a lack of information. Some districts also reported being frustrated with the small amount of money eligible to transfer—a problem that McKeon’s proposal aims to address. However, a sizeable percent of districts (44%) that didn’t use the program reported choosing not to participate because they already had sufficient existing flexibility in how to use funds.

None of this is to suggest that flexibility isn’t a good idea that could use some tweaking, or that local control isn’t important. It does provide a caution however, that like many education catch-phrases, just “removing Washington,” doesn’t necessarily lead to the kind of dramatic change we all want.

*Full disclosure: I recently left the Department of Education, where I served as the contracting officer’s representative on the contract that produced this evaluation, but an independent contractor conducted all analyses and wrote these reports.

How Colleges Short-Change Women

In the Chronicle of Higher Education, USA Today editorial writer Richard Whitmire, author of a forthcoming book about how K-12 schools supposedly short-change boys, looks at the issue of gender discrimination in college admissions. Says($) Whitmire:

In desperate attempts to keep their campuses from swinging hugely female, as far more women than men apply to college these days, straight-A girls are told to look elsewhere, while B-average boys get the fat envelope.

As a typical example, Whitmire notes that "the admittance rate for men at the College of William and Mary was an average of 12 percentage points higher than the rate for women from 1997 to 2006." To which the dean of admissions there responds, "Even women who enroll ... expect to see men on campus. It's not the College of Mary and Mary."

Whitmire wants to know why nobody is filing a big splashy lawsuit about this. The main reason seems to be the phenomenon that the William and Mary guy alludes to--compared to other admissions preferences, the student/group interests here are conflicted.

A given minority student applying to college presumably has two congruent interests: (1) to increase their chances of admission, and (2) to increase the chances that other minorities will be admitted. Both interests lead to the same policy: affirmative action.

Men and women, by contrast, have two opposing interests: (1) to increase their chances of admission, and (2) to decrease the chances that other members of their gender will be admitted. In other words, give admissions preference to me (or in the case of women, don't discriminate against me), but once you've done that, don't apply the same policy to anyone else, because I'd rather have more of the other gender and not too many of my own.

That said, admissions preferences for men are clearly a terrible, selfish policy. The original (and still best) justification for affirmative action was to help students who, because of their race, had fewer opportunities to attend a good K-12 school and had historically suffered discrimination in society at large. For boys, the former is highly debatable--there are good reasons to think the so-called "boys crisis" in K-12 education is overblown--and the latter could obviously not be less true.

In the end, the biggest losers here are women from the middle and lower parts of the socioeconomic spectrum. This is why:

The overall pool of college students is, for the purposes of this discussion, fixed at 57 percent women, 43 percent men. Individual college policies don't change that in the aggregate, because everyone can go to college somewhere. So gender-based admissions policies don't solve the gender imbalance, they just redistribute it downward to colleges that don't have selective admissions, and thus aren't in a position to manipulate their gender mix.

As a result, women who attend selective colleges suffer a reduced chance of getting into the college of their choice, but enjoy a more balanced gender distribution. Men who attend selective colleges get a leg up on admissions, and get to hang out with smarter women who are more fun to talk to and will earn more if they marry them someday. For men, it's win-win; for women, it's win-lose.

The lose-losers are women who attend non-selective colleges and universities, women who are more likely to be first-generation, mid-to-low income students. They have to put up with an even more maldistributed gender mix than they would otherwise experience, plus the men they go to school with are less smart than they would otherwise be.

So if you're a women attending Regional State University and you're wondering why there aren't very many guys around, and the ones who are around are a bunch of drooling idiots, blame the admissions director at William and Mary.

Attention Researchers

At Teacher Magazine, Jessica Shyu ask her readers to weigh in on what makes teachers stay. Good question. After that, we should figure out what makes them leave. Then we need to know what makes people join or not join the profession in the first place.

Of course, we already have plenty of theories, conjectures, and conventional wisdom about these questions. We do not have nearly enough useful research. It's time to stop asking for anecdotes and start asking for data.

For example, which of the following would be more attractive to chemistry majors with at least a 3.2 GPA: A $3000 raise for teachers or a career ladder program that uses the same money to provide opportunities for advancement and promotion. I don't know the answer, but a simple study could tell us. A more clever study could tell us the approximate dollar value of a career ladder program to any subset of the student population we're interested in. And it could do the same for other policies that affect whether or not people want to teach.

Researchers have already done surveys and analyzed the labor market, but these inquiries have been limited, and many are now outdated. With a current and comprehensive study, we could reshape recruitment and retention to improve teacher quality. JPMorgan and McKinsey have the data. It’s time for schools to have it too.

Q&A on Special Education and NCLB

Sherman Dorn raises some great questions about special education and NCLB in response to my CYCT on the topic.* While Dorn thinks that my answers to his questions are all an unqualified ‘yes’, I’d say they’re more of a ‘yes, but…’:

• Do schools use special education as an excuse not to educate students identified as having disabilities?

Here we agree that the answer is yes. And I think we’d also agree that it is important to qualify this answer. Often, teachers and principals don’t have the tools to adequately address learning problems or disabilities. While I think holding schools accountable for teaching students with disabilities to grade-level standards is one part of the equation for improving the success of special education students, another, very important part, is ensuring that teachers and principals are well-trained and have the resources they need to carry out this responsibility.

• Should schools be pushed to educate students with disabilities better?

We also agree on the answer to this question: yes. And—as I said above—accountability is an important part of this push. But another part will be equipping teachers and schools to meet the challenge, or else we can push all we want, but won’t get very far.

• Can students with disabilities reach the proficiency standard identified by states?

As I say in the report, for the majority of students enrolled in special education—around 80 percent—the answer is yes. These students are identified with disabilities that do not preclude them from reaching grade-level standards. In these cases, I do think that the ultimate goal should be grade level achievement. For the minority of special education students for whom grade-level achievement may not be possible—the ones with the most severe disabilities—alternate methods are needed to hold schools accountable for their achievement.

Under NCLB, we already allow states to use alternate methods for approximately 30 percent of special education students. Ten percent are assessed with alternate assessments, these are intended for students with severe cognitive disabilities. Twenty percent are assessed under ‘modified standards’, these are intended for students who are not able to achieve grade-level standard within the typical timeframe, but do not have severe cognitive disabilities.

As Dorn notes at the end of his post, the limits on the number of students who can be assessed with alternate methods needs to be based on research on the proportion of students for whom this is appropriate. The Commission on No Child Left Behind did some research on this and found that the current limit for testing students with ‘modified standards’ is too high. And so, while we may need to improve the methods we use to assess this group of students, I’m not convinced that the overall percent of students that are assessed with alternate methods needs to be increased.

Dorn offers an idea for an alternate method of testing special education students—students can take a lower grade-level assessment so long as they increase a grade-level each year. This will still hold schools accountable for increasing student achievement from one year to the next, but also recognizes that some students are not yet at grade level. This could work for the students currently covered under ‘alternate assessments’ and ‘modified standards’, but for the majority of special education students, I still think that the ultimate goal needs to be grade-level achievement. Growth models hold some potential for addressing this—they can be used to hold schools accountable for improving student achievement while also recognizing the huge differences in where students start.

• Is NCLB the best current tool to prod states and schools to educate students with disabilities better?

My answer to this is a yes, with a big BUT. The key word is current. Right now, NCLB is the best accountability measure students with disabilities have had since IDEA. BUT, it is certainly not the best measure they will ever have, at least I hope not. While I applaud NCLB’s focus on achievement gaps and disaggregating data, I also think there’s a lot to do to improve the quality of assessments, add more nuance and accuracy to identifying the ‘in need of improvement’ schools, and improve the consistency and accuracy of state standards. This is hard work that will require resources, good policymaking, and solid research, but I don’t think that rolling back accountability is the way to get to an improved NCLB.

*Sherman, thanks for the name correction!

Lonestar Leadership: New Education Chair in Texas

Texas Governor Rick Perry named a new chairman to the State Board of Education yesterday. Perry chose Don McLeroy, a staunch conservative dentist known for his strong views on curriculum: yes to abstinence, no to evolution.

I could tell you more about McLeroy, but you should take a look at his surprisingly candid website. In case you’re short on time, or in case a wise bureaucrat gently suggests that McLeroy take down the site, I’ll describe some highlights.

In an essay on standards and state tests, McLeroy dismisses state authority in education, the same authority he will now oversee. “Not only has the rise of the State led to mediocrity in our schools, it has provided a base for monopolistic educational ideas, views and fads to gain a dogmatic hold over our entire State. It has stifled diversity, a trait that is so necessary in all fields of endeavor.”

In a barely-coherent polemic on evolution, McLeroy lists 117 arguments against Darwin’s theory. Don’t ask me what he means by #115, “[Evolution] moves to fast to see; moves to slow to see.”

In “The Gift of Medievil Christendom to the World,” McLeroy argues that “Freedom… is never found in the ancient world... It is never found in the rest of the modern world. Freedom is unique to the areas of the world that have been touched by Christianity.”

As Chairman, McLeroy will have several important duties. In coming years, the nation’s second most populous state will create new curriculum standards in English, reading, writing, and science. McLeroy will appoint committes and chairs while setting the agenda for each board meeting. His role may be especially important due to the split composition of the board: seven firm social conservatives and eight moderate republicans and democrats.

Update: The Dallas Morning News editorial staff gives its take on the appointment.

Terrible PhD Completion Rates

Richard Vedder is at least two standard deviations more conservative than I am on most issues, but his higher education blog is a consistent source of sharp commentary and outside-the-box thinking. Yesterday he discussed abolishing tuition at Harvard; today's topic is the shocking state of PhD completion:

A half century ago, it was common for persons to get their Ph.D. in four or five years and some, including myself, did it in under three years (at age 24 yet). Today, a majority of those entering graduate programs do not have their degrees in six years, and in the humanities, a majority of Ph.D. candidates have not completed their degree in TEN years!!! Of those who DO get their humanities Ph.D. within 10 years, a majority have not received the degree after six years. The dropout rates are about as high as for undergraduate education.

Dropout rates in undergraduate education are pretty bad, especially at non-elite public universities, where dropout rates of 60 percent or more are not uncommon, particularly for low-income and minority students. That large numbers of people who have already proven to be college material, by virtue of completing a bachelor's degree, are spending years of their lives in the futile pursuit of doctorate strikes me as a massive waste of resources all around.

Plus, 10 years? That's insane. Part of me would love to figure out a way to get an advanced degree in a really interesting, complicated area. Then Vedder says:

Part of the problem is that dissertation preparation has gotten out of hand. I have sat on Ph.D. committees where professors force students to do months of additional work of trivial worth in order to fine tune and extend some esoteric thought that the professor fancies.

and I think: Nope, there's no way I could deal with that. Life is short, and there's work to do.

More on Special Education and NCLB

As promised, ES has a new Chart You Can Trust on NCLB accountability and special education students.

As this great article in EdWeek discusses, some lawmakers and education groups (such as the National Education Association and National School Boards Association) are calling for more flexibility when assessing special education students. Specifically, they’d like to give students assessments deemed appropriate by the students’ Individual Education Plan team (the group responsible for deciding on a special education student's education plan). But advocates for special education students argue that allowing this kind of flexibility will lower achievement standards and turn back the clock on accountability for these students.

I argue that the majority of special education students can meet the same, grade-level standards as regular education students, and holding them to different standards could be detrimental. Click here for more on this issue.

Happens to the Best of Us

Per CNN:

The longtime chairman of the Roger Williams University board admitted Monday to using the N-word during a board meeting, saying it "kind of slipped out."...Papitto, who has given the school at least $7 million and whose name is on the only law school in Rhode Island, said he had never used the term before.

"The first time I heard it was on television or rap music or something," he told WPRO.

That's understandable. As we all know, the N-word is bandied about like nobody's business on network television these days. And since Papitto, like most 80-year old white men, probably listens to rap music two or three hours per day, one can understand how it could slip out in a casual conversation about the difficulty of finding minorities to sit on the university board. It must be tough, having grown up in '30 and '40s--when, of course, racial slurs were unknown--only to endure a coarsened 21st century culture to which he inevitably, and forgiveably, succumbed.

Investing in Harvard Graduates (for real)

Richard Vedder offers some fairly radical ideas about how higher education financial aid could be different, particularly at elite schools:

Rich schools like Harvard, Yale and Princeton should let students in for free in exchange for a share of student earnings beyond subsistence for X number of years after graduation. In other words, Harvard should buy equity in the "human capital" that it allegedly creates, include it as an asset in its endowment, and there should be no student loans. Alternatively, students should be given the option of paying tuition now with no future obligation. However, I see no reason why Harvard, Yale and Princeton charge any tuition at all given that they earn at the minimum $75,000 per student in sustainable endowment income annually. There is a fairly decent case that can be made that, given the huge value of tax exempt status to them, these should not be allowed to charge tuition, although I would not go that far.

I probably would go that far. Barring some kind of catastrophic collapse of the nation's financial markets, it seems likely that at some point in the next 10 - 20 years, at least one university--probably Harvard--will reach the theoretical limit of the size of a non-profit university's endowment beyond which some combination of internal and external pressure makes charging tuition untenable.

On the other point, I wonder how much a sufficiently-sized group of Ivy League freshmen could raise per person on the open market if they securitized a portion of their future collective income over a given time period -- a percentage big enough to be worth buying but small enough to avoid massive disincentives to earn? Is that even possible, legally?

EduCap: A For-Profit Company in Non-Profit Clothing

The next time someone says you can't get rich working in non-profits, just show them the story on EduCap in today’s Washington Post. EduCap is a “non-profit” private student loan company, whose CEO receives $1 million in annual compensation. This story makes you rethink what it means to be a non-profit, and it also underlines how much money—and how little oversight—is in the whole student financial aid game.

The article details (although it still left me a little confused…) the corporate structure of EduCap—a nonprofit lending company that owns both the Catherine B. Reynolds Foundation and Loan to Learn, it’s lending brand.

Despite it’s non-profit status, which exempts it from paying federal income taxes, EduCap reaps enough profits to buy a Gulfstream IV Jet, to take its board on retreats to the Bahamas , and to offer to fly financial aid officers and their spouses to a Carribean island for an all-expense paid conference (which did not happen after intense media scrutiny).

The CEO claims that EduCap helps students by offering private loans to bridge the gap between federal loans and the cost of college. But I have to wonder how offering a high-risk student (probably low-income, and with little or poor credit history) a large amount of loan money at a high interest rate (18 percent in some cases) is helpful. It’s more likely to put these students at risk of bankruptcy or a lifetime of student loan debt.

If EduCap really wanted to help these students, it would, like a true non-profit, cut down on the perks and the million-dollar CEO salary and use its profits to offer at-risk students grants and/or loans at very low interest rates. If it doesn’t want to do this, then it should call itself what it is—a for-profit private loan company.

*An illustrated example of how non-profits in the student loan industry get rich: StudentLoanFollies.pdf

Monopolizing the Mantle of Public Education

Via Joanne Jacobs:

New Detroit Public Schools superintendent Connie Calloway said Thursday that she does not support charter schools, and she intends to present ideas that will help draw students back to the struggling school system.

"Charter schools mean suicide for public schools," said Calloway during her first board meeting, causing the crowd at Kettering High School to erupt in applause.

Calloway said Detroit Public Schools must get to the root of the persistent enrollment loss plaguing the 116,000-student district.

She identified two immediate reasons: ongoing disputes the district faces and the desire of parents to have safe, clean and orderly schools.

There are legitimate arguments to be had about charter schools--how they should be expanded, funded, governed, and held accountable. Some charter schools are great, others aren't, and no one should think they're an educational cure-all. But surely the most dishonest trope among charter opponents is the deliberate attempt to put charter schools outside the boundaries of "public" education.

Charter schools are public schools. They're governed and funded by the public and they enroll public students, free of charge. I've been in a bunch of charter schools here in DC--again, some great, some not--and I would defy anyone to walk in the front door and explain what makes them less than fully public.

Perhaps new superintendant Calloway understands this better than she lets on, with her odd "suicide" construction. Suicide comes from within, after all, so the question is what essentially public element of schooling is at risk here--something other than an inability to provide "safe, clean, and orderly" schools, I assume? If so, what is it? If not, what are we losing that's worth mourning for?

(Student) Slip 'n Slide®

I’ve been around long enough to understand that one new study shouldn’t be cause for celebration. But yesterday when EdWeek wrote up a study on summer learning deficits [subscription required for the full article] that carried tremendous policy implications, I was a little taken aback when I got to this section:

Daria L. Hall, the assistant director for K-12 policy development for the Washington-based Education Trust, a nonprofit group that promotes high academic standards for disadvantaged children, worries that the findings will take policymakers’ focus off the need to close a different kind of gap.

“We can’t allow the problems of the out-of school inequities to overshadow the problems of the in-school inequities,” she said. “However way you look at it, low-income kids and kids of color get less than their fair share of quality teaching, curriculum, and resources.”

The study traced about two-thirds of the gap in achievement between high SES and low SES students in 9th grade to elementary school summer deficits. The remaining third was traceable to differences already evident before the students began 1st grade. The study, conducted by Karl Alexander and colleagues at Johns Hopkins, found no statistically significant differences between the gains of high and low SES kids during the school year.

Presumably, Hall is taking issue with the conclusion that SES, accumulated, made all the difference. We know poor kids get fewer advantages in education (as evidentiary support see here or here), but this study says that, at least in urban districts with high concentrations of poverty, there isn’t a large difference between one bad school and another. Further, since Baltimore’s population mirrors many cities across the country, urban districts could implement new school calendars to ameliorate within-district achievement gaps. Hall’s point is well-taken that this step wouldn’t fix all achievement disparities, but it too casually dismisses what a district can do.

While it isn’t a new concept for researchers to argue for restructuring school calendars, this study utilized the best dataset available. Past investigations analyzed summer learning loss between kindergarten and first grade; Alexander included fall and spring tests (to measure summer and school-year learning) from 1st-5th grades, and continued to follow the students until they were 22. This allowed him to track whether students completed high-level coursework in high school or went on to college. Previous studies haven’t gone this far; past analyses found that summer learning differences matter, but they hadn’t yet systematically traced those effects over time. Alexander shows empirically what we’ve all assumed: home life matters in educational attainment, and, if the numbers are generalizable, it matters more. I’m not ready to lump this study in as just one more for the pile.