The Education Gadfly Weekly

With a President who doesn’t fear the teachers unions and Republican control of the U.S. Senate and the House of Representatives, the opportunity for school choice has never been stronger. A consensus is developing that the quickest and most effective route to a school-choice victory for all fifty states is a federal scholarship tax credit. This idea could be included in the major tax-reform overhaul expected this spring.

Indeed, a 2015 bill, introduced by Senator Marco Rubio (R-Florida) and Representative Todd Rokita (R-Indiana), is an example of just such an approach. It proposes a federal tax credit for K–12 scholarships that is independent of state programs—much like federal tax credits for buying electric vehicles.

Some school-choice advocates have assumed that federal tax credits would be an “add on” to larger scholarships financed by state tax credit scholarships. That’s one way to do it. But there’s no reason a federal scholarship couldn’t stand on its own. And if it did, it would unlock school choice for children in every state in the land.

Here's how it could work. If you pay federal taxes and donate to any eligible, existing scholarship fund—for example, the Children's Scholarship Fund—you get to reduce your tax bill by the amount of your donation. Any such bill would set an income threshold for who can use the scholarships funded by the tax-credited donations (in the Rubio-Rokita case, up to 2.5 times the poverty level, or about $60,000 for a family of four), place a cap on what size donation would be eligible for a tax credit, and potentially limit the total combined amount of tax credits allowed for all taxpayers in a calendar year ($20 billion, for example, the amount of federal funds President Trump has proposed for expanding school choice).

Any good federal school-choice tax credit program would also have three other features. First, it would allow a K–12 scholarship fund to provide full scholarships to students in states without their own programs, and to “top up” scholarships in states that have them already. The absence of such flexibility would prevent the program from reaching all fifty states, and would fail to aid millions of students who would otherwise benefit.

Second, it would permit fuller and more generous scholarships for children in need. This would have the salutary effect of stimulating the supply of private-school options, even making possible the reopening of formerly shuttered Catholic and other schools. In the Bronx, for example, the supply of Catholic schools simply is not adequate to meet the demand of Hispanic and other immigrants. The interest is very high, but the ability to pay is not. Large scholarships would transform the educational landscape in the Bronx virtually overnight.

Finally, in a nation as diverse as the U.S., federal policies shouldn’t micromanage, so the program would be as flexible as possible to account for America’s many variations.

Not only is such a federal school-choice tax credit doable—it’s the only way President Trump can effectively bring school choice to families in the blue states that voted for him in 2016 and others that might in the future. No other solution can immediately benefit every American student. A competitive grant program, for example, would at most affect a half-dozen states. And categorical block grants that can be turned into school vouchers require state-by-state approval, meaning "choice" states would likely allow, but “non-choice” states would not.

A good federal tax credit, on the other hand, impacts everyone and doesn’t require state approval, shielding it from teachers unions and state and local pols who would otherwise try to muck it up. And it skirts Blaine Amendments in state constitutions that have no power over federal policies.

In short, if Trump wants a fifty-state school-choice victory and he wants it soon, the federal tax-reform bill that can be acted upon as early as this spring is the best vehicle to get this done. It would fund K–12 scholarships all across the country, and would offer an instant legacy by improving quickly the lives of millions of American students.

Thomas W. Carroll is president of the Invest in Education Coalition based in New York.

The views expressed herein represent the opinions of the author and not necessarily the Thomas B. Fordham Institute.

For years, intrepid number crunchers—finance experts, economists, and pension analysts among them—have been trying, with little success, to prompt state policymakers to take action on reforming public pensions for teachers. Their efforts have included jaw-dropping numbers (Liabilities total trillions of dollars!), catastrophic predictions (Districts will go bankrupt! Taxpayers will be on the hook for decades!), dire real-world consequences for both employees and students (Teachers will lose their jobs! Class sizes will balloon! Instruction will suffer!), and alarming appeals for equity (We’re denying new teachers a secure retirement!).

If only these warnings were exaggerated scare tactics. But they’re very real. Consider these examples from 2016 alone: Pennsylvania taxpayers paid over $4 billion to bail out the Keystone State’s teacher pension fund in the 2015–16 fiscal year, even as a major pension-reform bill failed to clear the state legislature. Detroit Public Schools owes the state of Michigan $138.5 million in back pension payments and is accruing what amounts to $33,560 per day in late fees and interest; just servicing this debt costs the district $1,394 per student. In Chicago, the dispute over not increasing teacher salaries because the funds were needed to pay for pensions became so heated that teachers nearly went on strike.

Which makes it all the more tragic that most policymakers—and the public—have responded to the public pension crisis with little more than a shrug. Sometimes this response is simply short-sighted: “Yes, it’s a problem and something should be done, but we have more pressing issues to deal with.” Other times it’s about avoidance: “This issue is so complicated and calamitous that we’re going to bury our heads in the sand. Those who come after us will have to cope.” And too often, it’s fearful: “If we take this on, we’ll face backlash from the unions, the teachers, and much of the public.”

At one level, these reactions are completely understandable. Why take on a complex, costly issue that brings no short-term political gain and is sure to enrage many constituents?

The reason is that the public pension crisis is already having a negative effect on real people, and it will keep getting worse. The most conspicuous victims are new teachers, people eager to enter a profession where they can make a difference for kids. The bargain used to be that a new teacher would receive mediocre pay but could count on a comfortable retirement. Now most new teachers can expect mediocre pay and lousy benefits. Yet many of those new teachers are unaware that the job they’ve dreamed about doesn’t fulfill its part of the bargain. They will pay a portion of those mediocre wages into a pension system, and for most, that system will later fail to provide them with any actual net benefit. What they receive in retirement will be worth less than what they put into the system while they were in the classroom.

In a new report, (No) Money in the Bank: Which Retirement Systems Penalize New Teachers?, we calculate and document that harsh reality. We ask specifically: How long must a new teacher remain in the same retirement system until the value of her benefits exceed the value of her contributions? We use the term “crossover point” to describe the time when that happens.

To tackle this complicated set of calculations, we recruited Martin Lueken, Director of Fiscal Policy and Analysis at the Friedman Foundation for Educational Choice (EdChoice). He has worked extensively at the intersection of education policy and economics, and his research, writing, and expertise on teacher pensions are respected across the field. Dr. Lueken examined the timing of the crossover point for a new teacher in the largest public school district in each state plus the District of Columbia. These fifty-one districts employ approximately 11 percent of U.S. teachers.

What is distinctive about his analysis is that all calculations are based on real data. He uses retirement plan parameters (e.g., contribution rates and assumed rate of return) drawn from actual plan documents, and current teacher salaries pulled from actual district salary schedules and collective bargaining agreements. In other words, these aren’t hypothetical scenarios; they represent reality for incoming teachers in these districts. The picture that emerges isn’t pretty. The median crossover point of the fifty-one districts is twenty-five years. That means teachers in more than half of these districts will wait two-and-a-half decades before their retirement benefits are worth more than what they’ve put in themselves. For the thirty-nine traditional defined benefit (DB) plans, the median is twenty-seven years. Only five DB plans have a crossover point of fewer than twenty years—which means that, in the thirty-four other districts with DB plans, nearly three in four teachers will leave the profession before they reach the crossover point. Or phrased another way: Since the average experience of a teacher who leaves the profession is fifteen years—and fewer than one out of four stays more than twenty years—many teachers will never see a true “benefit” from their benefits.

That’s the case in Chicago (IL), Boston (MA), and Anoka-Hennepin (MN) where teachers will never reach a crossover point. Although they contribute 7.5 to 11 percent of their earnings to the pension system, their pension wealth will never be worth more than their cumulative contributions—no matter how long they stay.

It’s not unfair to say that these systems now treat new teachers as sources of revenue for other people’s pensions rather than valued employees in their own right. One study, for instance, finds that, “on average across state plans, over 10 percent of current teachers’ earnings are being set aside to pay for previously accrued pension liabilities.”

On the other hand, by definition and design, the crossover point for all six defined contribution (DC) plans is zero years: under these 401(k)-style plans, a teacher’s total retirement benefits are always worth more than her own cumulative contributions into the system—that’s because the contributions of her employer, plus investment earnings on both, are also included. Teachers in Anchorage (AK), Miami-Dade County (FL), Detroit (MI), Columbus (OH), Greenville County (SC), and Alpine (UT) are covered by DC plans. (Alaska is the only state in which the DC plan is the only option; the others also have either DB or hybrid plans that teachers can choose.)

For teachers in the six hybrid plans analyzed, the median crossover point is ten years. Five districts have the hybrid plan as the only option: Portland (OR), Shelby County (TN), Providence (RI), Fairfax County (VA), and Indianapolis (IN). The sixth district is Seattle (WA), where teachers can choose between a DB and a hybrid plan. Teachers in Shelby County and Portland will reach a crossover point after just five years; teachers in Indianapolis, Providence, and Seattle reach it after ten years; Fairfax County teachers must wait twenty-three years.

So what should states, who sponsor these plans, do about this woeful state of affairs? The best recommendations aren’t always new—but they’re prudent. Dr. Lueken offers three: First, add a DC or other portable account-based plan (which would not defer compensation for new teachers) and allow teachers to choose which plan best meets their needs and circumstances. Second, make the more portable option the default plan. And third, increase wages and reduce benefits, since many new teachers prioritize higher salaries over deferred compensation.

Some states are already doing some of these things—but not nearly enough.

For a nation that places great emphasis on equity, it is astonishing that so many states now tacitly endorse pension systems that are inequitable to current and future generations of new teachers. All of which is even more egregious since DC options have been found to increase the retention rate of new teachers while eliminating the penalty that veterans face if they work past the year that their DB pension wealth peaks. Shrugging our shoulders helped get us into this mess. Now let’s stand straight and quit political posturing as we approach pension reform in 2017.

My biggest takeaway from five years of teaching fifth grade in a South Bronx public school was this: much of what I had been taught about why my students struggled with reading comprehension and literacy was simply incorrect, and almost certainly doomed to fail.

There was no conspiracy at work. No impersonal forces lined up to keep the majority of my students—all of them black or brown; all of them low-income—achieving below grade level. And forget what you think you know about teacher incompetence, institutional indifference, or the malign effects of teachers unions. My school was, in the main, filled with earnest people trying hard and failing. Not despite their training, but because of it. Our efforts were praiseworthy, but insufficient because we were overlooking something essential.

The one man whose work accurately described what I was seeing in my classroom every day was E.D. Hirsch, Jr., of Cultural Literacy and Core Knowledge fame. What was odd, however, was that every time I would invoke his name in my grad school classes or in various professional development sessions, I’d hear some variation of this response: “Oh, that ‘dead white guy’ stuff? Nobody takes that seriously.”

If you’re familiar with Hirsch’s work you know it has nothing to do with dead white males. It’s about language proficiency and reading comprehension. About background knowledge and vocabulary development. It’s about curriculum. Most importantly, in Hirsch’s view—and in mine—it’s about social justice. It’s a means of ensuring that our least fortunate children have access to the enabling knowledge and vocabulary that is the foundation of language proficiency, critical thinking, problem solving, and every other big picture academic outcome we seek for our least advantaged children. While there is increasing appreciation for Hirsch’s insights, bolstered by a mountain of cognitive research, it’s important to recall that his work was once summarily dismissed (and sometimes still is) as the product of a conservative, even reactionary mind, even though Hirsch has described himself as “practically a socialist.”

I told this story to a group of two dozen or so of my fellow ed reformers last week at an American Enterprise Institute convening on “race, social justice, and school reform” because I wanted to make two simple (some will say simplistic) points: our expensive and aggressive ed reform efforts still focus far too little on what kids do in school all day; and we don’t all have the same ideas about what it means to serve the cause of social justice—or whether it is even appropriate to place social justice issues at the heart of our efforts to improve outcomes for kids. It should be enough to seek the same ends; we needn’t agree on the means to achieve them.

I had no grand expectations for the meeting. To their credit, neither did Rick Hess of AEI or Stacey Childress of New Schools Venture fund, who organized the day. It was enough to listen to a variety of views on sensitive subjects, and model the kind of civil discourse we seek in others. But at the end of it all I still found myself wanting as much as possible to push the conversation towards classrooms, not away. Toward professional practice, not beliefs and dispositions. Toward the things, as Teach For America likes to tell its corps members, “within our locus of control.”

By no means do I wish to suggest indifference to issues of race, immigration, policing, or housing. Nor am I naïve enough not to recognize the broader contexts in which we educate children. Yet it remains unclear to me why a field that has produced decades of mediocrity, or a reform movement that has moved the needle on student outcomes far too little, believes it has the status and moral authority to be taken seriously on these broader issues. Moreover, if we believe that social ills and structural racism make improving outcomes impossible, then we are tacitly acknowledging—are we not?—that reform critics have been right all along, that the key to improving educational outcomes is to fix poverty first.

So I hope I will be forgiven, although I’m certain I will not be, for wanting the full force of reform efforts to focus on what happens inside of schools and classrooms. On what teachers teach and what students learn. It may not be very satisfying to march in the streets shouting “Tier Two Vocabulary Matters!” but it matters quite a lot.

In a column in U.S. News that deserved more attention than it got, Andy Rotherham recently observed how far removed the world of teaching and learning has become to those of us who spend our time flapping our jowls on panels, blogging, drafting policy briefs, and beating each other bloody on social media as if the fate of the republic depended on our next Tweet. “Kids sometimes come up, but it's usually in the context of someone asking how yours are,” he wrote. Andy is right.

Here’s the story I should have told at the AEI conference. On Inauguration Day I found myself in St. Bernard Parish, Louisiana, with Paul Pastorek, a legendary state and national reform figure. We sat down for lunch in a local joint that has fed folks who work at a pair of local oil refineries and their families for generations. It was impossible to eat three forkfuls of chicken and potatoes without someone pulling him away to talk or to meet some local official. One thing led to another and we found ourselves spending the rest of the afternoon, unplanned and unexpectedly, at Chalmette High School, which has a popular and successful theatre and performing arts program that touches six hundred students a year, one-third of the entire student body. Our tour guide was a forty-year veteran teacher named Charles Cassar, who couldn’t wait to show us the rehearsal spaces, dance studios, and the high school’s two magnificent theatres—all of it in the last place you’d look for them, smack in the middle of a blue-collar refinery town that took the hardest blow dealt by Hurricane Katrina in 2005.

Great teachers are storytellers, and Cassar had an endless supply. But one stuck with me: Many years ago, he was teaching world history and reviewing the Renaissance for a big test. “One of my kids puts his hand up and says, ‘Mr. Cassar, I don’t get it. Does God not make Michaelangelos or Leonardo DaVincis any more?’” Cassar was dumbstruck, but the question, he now says, changed his life. “That’s when I realized God is still making those kids. But what are we doing to develop them?” We were standing on part the answer to that kid’s question—the stage of Chalmette High School’s magnificent theatre—far from the swearing-in ceremony and the scene of the next day’s massive protests, far from the world of ed reform conferences, blogs, policy briefs, and Tweets. Mr. Cassar’s question is the question. What are we doing to develop them?

When I thought about Mr. Cassar and his student after the AEI meeting on race, social justice, and school reform, I realized I didn’t know if that student was black or white. It hadn’t occurred to me to ask.

On this week's podcast, special guest Dakarai Aarons, Vice President of Strategic Communications for the Data Quality Campaign, joins Mike Petrilli and Alyssa Schwenk to discuss press coverage of Betsy DeVos. During the Research Minute, Amber Northern examines the role high schools play in graduates’ colleges and majors.

Amber’s Research Minute

Rajeev Daroli and Cory Koedel, “How high schools explain students' initial colleges and majors,” CALDER (January 2017)

In this study, the authors estimate the “intergenerational income mobility rate” for every college in the United States, using data taken from the individual tax returns of over 30 million students who attended college between 1999 and 2013.

As defined by the authors, a college’s intergenerational mobility rate is the product of two factors: first, the fraction of enrolled students who come from households in the bottom quintile of the income distribution; and second, the fraction of those students whose subsequent earnings place them in the top income quintile.

In a society with perfect mobility, a child’s background would have no bearing on his or her future earnings, meaning exactly 4 percent of children would move from the bottom quintile to the top quintile (and every other quintile). However, in reality only 1.7 percent of U.S. kids actually manage this feat.

So what role do U.S. colleges play in promoting upward mobility? According to the authors, their analysis of the data yielded four main findings.

First, access to colleges varies greatly by parent income. For example, children whose parents are in the top one percent of the income distribution are seventy-seven times more likely to attend an Ivy League college than those whose parents are in the bottom income quintile. Contrary to public perception, colleges in America are just as socioeconomically segregated as the neighborhoods where children grow up.

Second, within a given college, children from low- and high-income families end up earning very similar amounts. In other words, colleges are successfully “leveling the playing field” for the students they admit, and poor students don’t appear to be “overmatched” at selective colleges as some observers have suggested. On average—and regardless of socioeconomic background—the subsequent earnings of students who attend “elite” schools put them in roughly the eightieth income percentile versus the seventieth percentile for students at other four-year colleges and the sixtieth percentile for students at two-year colleges.

Third, upward mobility rates vary substantially across colleges. For example, California State University–Los Angeles catapults a whopping 10 percent of its student body from the bottom quintile to the top, and some campuses of the City University of New York (CUNY) and the University of Texas system have mobility rates above 6 percent. Yet one in ten colleges has a mobility rate of less than 1 percent. (More on these variations below.)

Finally, although the fraction of low income kids attending college increased from 38 to 46 percent during the 2000s, the number attending colleges with high mobility rates fell sharply, while the fraction of low-income students at four-year colleges and selective schools was unchanged—even at Ivy League colleges, which enacted substantial tuition reductions and other outreach policies. Most of the increase in low-income enrollment occurred at two-year colleges and for-profit institutions.

According to the authors, factors such as location, size, and net tuition don’t predict a significant fraction of a school’s mobility rate. Nor is there a clear difference between public and private schools. On average, the former tend to admit more low-income students, while the latter are more successful with the low-income students they admit. But these effects tend to cancel each other out. For example, the twelve “Ivy-Plus” colleges (Ivy League schools plus other elite universities like Stanford) have the highest success rates, with almost 60 percent of students from the bottom quintile reaching the top quintile; yet because only 4 percent of students in these schools are from the bottom quintile, their average mobility rate is just 2.2 percent. A similar pattern emerges for four-year schools, which have only slightly higher mobility rates than two-year schools, despite their higher success rates. Notably, for-profit schools have higher average mobility rates than non-profit schools, though there is great variation within this sector, which includes some of the best and worst mobility rate schools.

Overall, greater access is correlated with lower success rates for lower-income students. But according to the authors, “the variation in access among colleges with comparably high success rates suggests that there are educational models that achieve good outcomes while offering access to a large number of low-income students.” And in fact, many of the colleges with the highest mobility rates are mid-tier public schools.

Because the study doesn’t account for the quality of the students that an institution enrolls, ultimately it can’t tell us what effect colleges have on students. However, it does suggest that certain institutions are worth a closer look. In particular, the colleges with mobility rates in the top decile are of interest because their median annual instructional expenditure is only $6,500 per student. The median “Ivy-Plus” college spends $87,000.

As those numbers suggest, if we want to preserve the American dream cost-effectively, we should probably do more of whatever mid-tier public universities are doing.

Any theories?

SOURCE: Raj Chetty, John N. Friedman, Emmanuel Saez, Nicholas Turner, and Danny Yagan, “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility,” January 2017.

A working paper released by the Hutchins Center this month argues that increased federal investment in educational research and development could narrow income-based achievement gaps, especially if those dollars are used to expand data-driven innovation and decentralize some of the policymaking process. In particular, the author identifies three policy areas the feds should target: school accountability, teacher performance, and undergraduate financial aid.

School accountability measures have had some success in narrowing the achievement gap, but they are not enough, argues the paper’s author, Sarah Turner. There is still an ample amount of inequality of opportunity owing to differences in family resources and circumstances. Families in the top income quartile are able to spend over six times as much on educational enrichment as those in the bottom quartile, giving them a clear advantage. Yet, according to Turner, the government can change this if it invests in high-quality assessments that states can tailor to local contexts to ensure the only schools available to the public are of sufficient caliber.

On the issue of teacher performance, value-added data clearly show that high-quality educators improve student achievement. Therefore, having more of them in low-income schools would also narrow achievement gaps. To help accomplish this, Turner asserts that federal policy should focus on funding a data-driven research strategy that invests in training and recruiting better teachers, promotes professional development, and provides adequate compensation based on evaluation of performance. Federal efforts could also help create and sustain resources like state-level databases that track classroom outcomes of graduates of different teacher education programs.

Finally, the cost of higher education also disproportionately disadvantages low-income students, hampering future earning and thereby stunting upward mobility. Students in the bottom income quartile who attend college are significantly less likely to graduate compared to those in the top quartile (in part because of cost, but also because disadvantaged students are much less likely to be college ready). Federal efforts such as making financial aid more transparent and portable could increase accessibility and impact enrollment and attainment. Pell Grants in particular should be restructured so as to more accurately assess the needs of both first-time college students and adults returning to school, thereby making it more efficient and inclusive. And efforts can also be made on the local level to assist in matching students with appropriate colleges by increasing student access to college planning tools and developing more efficient ways for high school counselors to convey options to students to increase the likelihood of degree completion.

The overarching premise of the paper is that the federal government needs to significantly increase funding and resources available to education research and development. Education policy should be mainly dealt with at the state and local levels to accommodate for the idiosyncrasies of individual areas. However, to accelerate the narrowing of income-based achievement gaps, it is important that the federal government has a hand in ensuring that education funding gets used properly and effectively.

SOURCE: Sarah Turner, “Education Markets: Forward-Looking Policy Options,” Hutchins Center (January 2017). 

A new report by the Education Commission of the States (ECS) examines how varied “open enrollment” policies are across America.

Open enrollment allows students to transfer from their assigned school to another public option, either within their district (intra-district) or outside (inter-district). Forty-six states and the District of Columbia have laws permitting open enrollment, but these vary widely. For example, Connecticut has mandatory open enrollment in four cities but voluntary arrangements statewide, while Vermont makes inter- and intra-district open enrollment mandatory, but only for high schools. Alabama, Illinois, Maryland, and North Carolina are the four states that lack open enrollment policies.

The report attempts to make sense of this multifarious landscape with a two-page table summarizing open enrollment policies for each state, as well as brief overviews of how the policies account for student transportation and how transfer requests can be prioritized if demand exceeds available space.

Transportation can be a limiting factor for students seeking to take advantage of open enrollment, but of the thirty-five states with laws addressing the issue, most push the responsibility to parents, while some states like Arkansas and Massachusetts require the districts from which students are transferring to provide transportation in certain cases, such as when students are leaving low-performing schools. If transfer requests exceed school capacity, most states require schools to hold lotteries, but twenty-eight states and D.C. either permit or require districts to prioritize certain groups of students. Most commonly, these favored groups include siblings of current students and children of school employees, but can also include a number of others, such as those attending low-income schools.

All of this remains fluid, however, as states continue to make changes to their policies—including the six that did so in 2016 (Arizona, Florida, Indiana, Minnesota, Nebraska, and Tennessee). Uniquely, Nebraska’s open enrollment policy now requires districts to define the maximum capacity for each school, so administrators cannot retroactively adjust the numbers to deter or encourage transfers. And Florida made the most substantial changes, shifting from a voluntary system to mandatory open enrollment, both intra- and inter-district, and prioritizing transfer requests for “children of active-duty military personnel, children in foster care, students living in the school district boundaries and children transferring because of court-ordered custody changes.”

The report concisely summarizes the status of open enrollment policies nationwide and should help voters and policymakers recognize possible strategies to improve open enrollment policies in their states. It does not, however, evaluate which of the many strategies improve student outcomes; there remains little scholarship out there that does. Therefore, the jury is very much still out on the effects of these policies, and more research is needed. Those of us at the Fordham Institute plan to help fill the vacuum with a study about open enrollment in Ohio, due out this spring. Stay tuned!

SOURCE: Micah Ann Wixom, “Open Enrollment: Overview and 2016 legislative update,” Education Commission of the States. (January 2017).