Wednesday, July 12, 2017

The U.S. Department of Education’s $1 Trillion Debt Millstone

According to the U.S. Treasury Department, the U.S. Department of Education has now cumulatively borrowed over one trillion dollars from the public for the purpose of funding its Federal Direct Student Loan program since January 2009.

Political Calculations’ charted the history of the Education Department’s borrowing to support its student loan business.

Between January 2009 and May 2017, the total public debt outstanding of the U.S. government increased by over 9.2 trillion dollars. Since $1 trillion of that borrowed money went to fund student loans, it accounts for 10.8% of the increase of the national debt over the last eight years.

Getting out of its money losing student loan business should be a top priority at the U.S. Department of Education.


Balancing college and career readiness

A new short report from Advance CTE and the Education Strategy Group provides some valuable insights into how state policymakers are thinking about preparing high school students for work. But it also highlights one of today’s big K-12 challenges: finding the right balance between getting students to aim for college or career.

Under the new federal education law, states are submitting new school accountability systems to Washington; 17 states submitted plans in the first round. The report looks at whether states elevated career readiness in their accountability systems. Thanks to the flexibility of the new federal law and the public demands that we better prepare more high school graduates for work, states have the opportunity to redefine what it means to succeed in high school. So instead of aiming to make acquisition of a high school diploma synonymous with “ready for a four-year college,” states can prioritize the acquisition of work-ready skills.

The report found 11 of 17 states that submitted plans in the first wave are experimenting with new approaches to career preparation. For instance, Delaware will give credit for earning an industry credential or passing the military’s entrance exam. Illinois intends to differentiate graduates as “distinguished scholars” or “college- and career-ready,” with the later designation earnable through career-ready indicators, such as demonstrating workplace experience and earning industry credentials.

Though the plans are edifying, many details have to be worked out. And there are more in-the-weeds issues to be grappled with. For example, will an industry credential be seen as equivalent to success in Advanced Placement classes? Can a school be deemed a success if everyone earns an industry credential but no one earns a college-ready score on the SAT?

These issues are at the heart of the fundamental college-or-career debate. They also bring to the fore a major concern of advocates for disadvantaged kids: If we don’t prepare all students for college, then low-income and minority kids will be pushed toward non-college tracks. Indeed, a coalition of civil rights groups recently raised concerns about new federal CTE legislation because of what they see as a too-limited role for Uncle Sam in ensuring underserved populations don’t get tracked into low-quality “voc-tech” programs.

New research by Hanushek and Woesmann adds to this discussion. They warn that over-emphasizing apprenticeships and CTE-style schooling may harm individuals’ long-term work prospects. “We find clear evidence that the initial labor-market advantage of vocational relative to general education decreases with age.” That is, helping young people acquire work-ready skills can help them land early work, but it can inhibit their ability to be prepared for changes down the line. As they write, “Vocational education has been promoted largely as a way of improving the transition from schooling to work, but it also appears to reduce the adaptability of workers to technological and structural change in the economy.” Along these lines, a recent CNBC article tightly explained some of the downsides to apprenticeships (e.g., what happens when you have one set of skills and your industry goes away?).

Helping young people acquire work-ready skills can help them land early work, but it can inhibit their ability to be prepared for changes down the line.

But on the other side of the ledger are a host of reasons to push more skills development. A number of prominent elected officials want more of their kids ready for work posthaste. Chicago’s mayor Rahm Emanuel wants high schools to produce post-secondary plans, such as proving students were accepted into apprenticeships or enlisted in the military. Michigan Governor Rick Snyder recently announced an array of efforts to expand CTE and argued as a nation we’ve focused too much on college and too little on work preparation. Pennsylvania Governor Tom Wolf just signed legislation enabling more students to opt out of traditional high school exams if they’re engaged in CTE activities.

A number of scholars are also making the case for skills development. My AEI colleague Mark Schneider recently wrote of doing away with the “bachelor’s or bust” mentality so we can foster a market of education options (e.g. apprenticeships, boot camps) that prioritize marketable skills instead of degrees. This could, he argues, lead to faster, cheaper, and higher-return paths into meaningful work. This fascinating one-year, no-money-down, skills-development school is a great example of what’s possible, and this heartwarming New York Times article demonstrates how the right training at the right time can transform the lives of struggling individuals.

The Brookings Institution’s Harry Holzer’s recent report on workforce development made the case that there will be many middle-skills jobs available in the years ahead and that skills development via provider/industry partnerships can produce “large and lasting impacts on earnings for participating workers.” These graphics produced by Bloomberg do an exceptional job of showing just how many industries are susceptible to job losses and new job formation, and therefore why skills development is so important.

With so much changing in the world of work, so much excitement about new skills providers, and so much need to get people to work, there’s a danger that state K-12 policymakers could overcorrect and force schools to focus too much on the high school-to-work pipeline. We have to remember that the college-for-all mentality of the last generation came about for a reason: Too few students were prepared for college.

The development, submission, review, and approval of ESSA accountability plans is a window into how states are trying to find the balance.


Australia: Surely millionaires can pay for their children's education without the assistance of the taxpayer?

Many students with affluent parents go to free State schools. Blaise Joseph below wants them to pay

We all know the school stereotype. Government schools are full of disadvantaged students and struggling for money, while overfunded wealthy independent schools receive taxpayer money they will just spend on fancier swimming pools.

This is a myth.

As recent research clearly demonstrates, government schools reflect the socioeconomic status (SES) of parents in the school catchment areas.

There are 538 government schools with a majority of students from the top SES quarter. This includes the academically selective government schools, which mainly attract students from very high SES backgrounds, and resemble the most 'elite' independent schools.

Around 500,000 students in government schools are from the top 25% of SES -- more than the total number of students from this category in independent and Catholic schools combined.

This challenges an unquestioned, unjustified assumption at the heart of school funding in Australia: universal free public schooling must continue.

The status quo is inequitable and unfair. High-income parents in high SES areas -- where government schools tend to perform much better -- are able to send their children to government schools for free.

In contrast, low-income parents in low SES areas -- where government schools tend to perform much worse -- have to make significant financial contributions to send their children to a non-government school if they are (understandably) not satisfied with the quality of the local government school.

Sure, the underlying long-term issue is the inconsistent quality of schooling, but in the meantime parents in low SES areas are unfairly disadvantaged.

Of course, there is nothing wrong with the government school system catering for students from all SES backgrounds. But why shouldn't schooling be means-tested like most other government services? Surely millionaires can pay for their children's education without the assistance of the taxpayer?

It is unnecessary to constrain government schools from receiving significant and compulsory contributions from high-income parents. This means much more taxpayer funding than needed is spent on many government schools.

Let's end the façade that all government schools have no capacity to charge fees and are in desperate need of taxpayer funding. State governments should seriously consider charging school fees for high SES parents.


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