Friday, January 15, 2016

Diversity Dogma in California

Twenty years ago California voters banned racial and ethnic preferences in public education, public hiring, and public contracting. But now some in Sacramento, including the governor, the attorney general, and the new senate boss, wish to repeal it. But even if they succeeded in lifting or circumventing the ban, known as the California Civil Rights Initiative or Proposition 209, their policies would fail to achieve the proportional representation they claim to seek, according to Independent Institute Policy Fellow K. Lloyd Billingsley.

The reasons are especially clear in the case of college admissions. Whereas the exact proportion of various races and ethnicities in the general population at any given time is, in an important sense, arbitrary, the qualities that go into getting admitted into the University of California should not be. Academic eligibility and effort, for example, are not evenly distributed across all groups. Instead, these and other factors tend to cluster. Thus, writes Billingsley, “Asians represent 14.4 percent of the California population, but they account for 36 percent of the fall 2015 UC enrollment.” Tinkering with that percentage in order to promote “representative diversity” would be arbitrary and unfair.

The blatant unfairness on the part of opponents of Prop 209 can be shown with a simple thought experiment. Imagine that they were to introduce a ballot measure exactly like the one they oppose, but with a single key difference. Suppose it dropped the word “not” from the first provision in Prop 209: “The state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.” If the opponents of Prop 209 doubt that the public would be indignant, let them try it.


Parental Choice Is a Better Path to Student Proficiency

Parents and kidsToday Education Week released its annual “Quality Counts” report. This is one of the main annual spending rankings used to justify more money for public education.

However, spending proponents never seem to tell us just how much more we’ll need to spend for students to be proficient in the basics.

Of course it costs money to educate students, but even a cursory glance at where the money goes raises serious doubts about how academic achievement is prioritized.

As of the 2011-12 school year, the latest data year available, total per-pupil spending averaged just over $12,000 nationwide. Only slightly more than half of that amount, $6,500 or 54 percent, went toward instruction, which includes teacher salaries and benefits, supplies such as textbooks, and purchased instructional services—including services from private schools.

If these “instructional” expenditures were primarily used to pay great educators, then they should be making six-figure salaries based on an average class size of 16 students ($6,500 * 16 students = $104,000), or at least a whole lot more than the average base salary of $53,000. Meanwhile, much of the remaining $5,500 per pupil is spent on administration, which is a significant expense given that the national median annual wage for K-12 education administrators now approaches $92,000.

Thus, it’s worth keeping in mind that about half of everything we spend on public education isn’t really funding what most of us would consider “education” after all.

But as a thought exercise, let’s all push the “I believe” button and pull out our imaginary checkbooks because if we could spend our way to 100 percent student proficiency, here’s a rough estimate of how much it will cost us under the current public school system.

Using combined fourth and eighth grade math and reading proficiency percentages from the 2011 National Assessment of Educational Progress (NAEP), also known as the Nation’s Report Card, and per-pupil instructional spending figures from 2011-12, nationwide each proficiency percentage point costs an average of $132 for a student who is not low-income, and $329 for a student who is low-income (whose family income would quality him or her for the federal National School Lunch program).

As of 2011, 49 percent of non low-income students and just 20 percent of low-income students nationwide were proficient on NAEP. It would cost an additional $6,750 per pupil to reach 100 percent proficiency for non low-income students. It would cost nearly four times as much per pupil for 100 percent of low-income students to reach proficiency, $26,400.

This means the national average per-pupil expenditure would jump to nearly $19,000 for non low-income students and more than $38,000 for low-income students. It would be cheaper to send school children to college.

Parental choice in education is a better way to help all students succeed without breaking the bank. The average funding for the 50 parental choice scholarship and education savings account (ESA) programs operating in nearly 30 states is $5,700—which likely overstates the actual funding because many parental choice programs include children with disabilities who have more expensive educational needs than general education students.

Nearly two decades of scientific research shows that disadvantaged students who use scholarships to attend the schools of their parents’ choice have higher academic achievement, as well as higher high school graduation, college attendance, and college completion rates.

Research also shows that public schools improve their performance in response to competition from private schools for students, so public school students benefit as well.

In fact, no scientific study to date has ever found that parental choice programs harm students.

When it comes to education, money certainly does matter. But how we spend it and who’s in charge of education funding matters far more. Instead of ranking states by how much they spend, we should be recognizing—and emulating—states that empower parents over their children’s education funding.


FactCheck: does Australia run one of the most generous student loan schemes in the world?

"Australia runs one of the most generous student loan schemes in the world". - Minister for Education and Training Simon Birmingham, speaking with Sarah Dingle on ABC Radio National Breakfast, January 4, 2015.

When asked for data to support the assertion, a spokesperson for the Department of Education and Training said that

    "Compared to other student loan schemes, the income-contingent nature of both Higher Education Loan Programme (HELP) loans Trade Support Loans (TSL) protects low income earners from making loan repayments they may not be able to afford. Australia's student loan schemes allow deferment of repayment obligations in cases of extreme financial hardship. During the life of the loan Australian students pay no real interest rate".

Overall, it is true that many features of Australia's loan schemes for tuition fees make it more generous than most other countries that charge for higher education. But from a student's perspective, how generous Australia is depends on exactly which aspect of the loan scheme you're looking at.

This FactCheck will examine how Australia compares to other countries when it comes to:

    the two key types of student loan schemes on offer here and overseas;

    how generous Australia's scheme is compared to countries with similar schemes;

    how much you have to earn in different countries before loan
repayments start;

   how much different governments internationally subsidise the cost of higher education;

    the interest rates charged on student loans;

    and finally whether there are any countries where students don't need a loan to get a degree.

The two key types of student loans

Australia's Higher Education Loan Programme (HELP) lends students the cost of their tertiary education fees, and requires repayment on an income-contingent basis.

For 2015-16, repayment starts when HELP debtors reach an annual income of A$54,126. At that point, debtors repay 4% of their income.

Many other OECD countries also offer public loans to students for higher education, usually a mortgage-style loan. Under mortgage-style loans, repayments are required regardless of income and do not vary with how much debtors earn.

Only a few countries offer national level income-contingent student loans, including Australia, England and New Zealand.

Unlike mortgage-style loans, income-contingent loans prevent students who are unable to repay going bankrupt or having their credit rating downgraded. That could be considered generous.
How does Australia compare to other countries with income-contingent student loans?

Three key aspects of HELP's settings determine how generous it is among countries with income-contingent student loan schemes:

    the initial threshold for repayment

    how much needs to be repaid each year, and

    the interest rate on debt.

Repayment thresholds

The HELP income threshold of around A$54,000 makes it the highest in the OECD. For graduates with a relatively low to average income (below A$54,000), the scheme is more generous than in other countries.

For people earning above the threshold, repayment systems are harder to compare. HELP has the lowest repayment rates, between 4% and 8% depending on income. This compares to 9% in England, 12% in New Zealand, and 10% to 20% on some limited US income-based loans. But HELP repayments are calculated on a debtor's entire income, while in other countries repayments are based on income above the threshold.

If a HELP debtor earns just above the threshold, she or he would repay 4% of total income - A$2,100.

Compared to New Zealand, this is relatively generous. New Zealand loans require debtors to repay once their income is above around A$18,000 (NZ$19,000). Assuming an income of A$54,000, with a repayment rate at 12%, the compulsory repayment would be around A$4,400 a year - twice Australia's compulsory repayment level.

In England, the threshold is around A$35,000 (œ17,000) repaying at 9%. As in New Zealand, compulsory repayment is calculated based on income above the threshold. A debtor who earns A$54,000 would repay around A$1,700 under the English system.
Compulsory repayments by income and country

Interest rates on debt

The last test of generosity is the interest rate the government charges on student loans. Australia indexes HELP loans to the consumer price index, which means that loans keep their value in real terms. The government typically borrows at a higher rate, so taxpayers pay much of the interest on student debt - a point that was emphasised by the minister in the interview referred to at the beginning of this article.

While Australia's system on interest is generous, New Zealand's is more so: the NZ government charges no interest on student loans unless debtors live overseas for longer than six months.

In England, interest rates on student loans vary by income. If debtors earn below the income threshold, their debt would be indexed to the retail price index or RPI (a measure of inflation).

But on income above the threshold (or study full-time), the interest is up to RPI plus 3%. High-income debtors face higher interest rates making their student loans less generous than the Australian system. Both the US and the Netherlands charge the government's cost of borrowing on their student loans.
Are there any countries where students don't need a loan to get a degree?

Finally, it's worth noting that several OECD countries, including Germany, Finland and Sweden, charge only nominal tuition fees or no fees at all.

Both Australia and New Zealand provide a direct government subsidy to most undergraduate students that reduces their fees and how much they have to borrow. But the New Zealand government subsidises a higher proportion of total course costs than in Australia on average.

In England, most teaching subsidies have been abolished and students pay the full cost of their degree.


Senator Birmingham is right: Australia does run one of the most generous student loan schemes in the world. It's one of the few countries to offer income-contingent student loans - saving people on low incomes from paying off their students loans, as is more common in the US and other countries.

Is it the cheapest place in the world to get a degree? That's a different question altogether. As noted above, several OECD countries, including Germany, Finland and Sweden, charge little or no tuition fees.


No comments: