Indiana Jones and the Teacher Quality Crusade

April 25, 2008

(Guest post by Matthew Ladner)

Indiana Jones returns to the silver screen this summer. When last we checked in on the intrepid Dr. Jones in 1989, you may recall, he was in hot pursuit of the Holy Grail. The Grail of course lay behind a series of deadly traps, guarded by an ancient knight.

The old crusader explained to Indy and company the grail lay hidden among a number of cups, and could only be revealed by drinking from the correct cup. The villain chose an ornate, jewel encrusted goblet, drank from it, and suffered a horrible death.

 

The knight observed: “He chose…poorly.”

Indy looked for the cup of a carpenter, and drank from a simple wooden beaker. The Knight noted approvingly “He chose…wisely.”

Americans have chosen poorly in many different ways in our running of our public schools, and our children and taxpayers have been suffering the consequences. Americans have been pouring additional resources into public schools for many decades, while the standardized test scores have remained stubbornly flat.

A new report from the McKinsey Company examines education systems from around the world, revealing some of the central problems of the American system in the process. In international examinations of student proficiency in mathematics and science, American elementary students score fairly well. American middle school students slip to the middle of the pack while American high school students rank near the bottom, behind all of our major Asian and European competitors.

Obviously, something is wrong.

The McKinsey report emphasizes the crucial nature of recruiting high quality teachers. Successful school systems recruit their teachers from upper tier of university academic achievers. A South Korean official summarized this practice succinctly “The quality of a school system cannot exceed the quality of its teachers.”

South Korea in fact engages in remarkably different education practices when compared to the United States. South Korea spends less per pupil, but pays their teachers more. This feat is accomplished through larger average class sizes- which are approximately twice as large in South Korea than in the United States.

Korean teachers however are paid much better and enjoy greater professional prestige than their American counterparts. The McKinsey report cites data from the Organization for Economic Cooperation and Development showing that a 15 year veteran teachers in South Korea is paid an average of 2.5 times GDP per capita. In America, the average is a little more than 1 times GDP per capita.

Higher pay and prestige allows South Korea to recruit teachers from those in the top 5 percent of their university graduating classes. Korean schools have many applicants for every teaching job. Meanwhile, in the United States, the low upper cap on the pay fails to attract many of our brightest and most ambitious students. American schools on average recruit teachers from the bottom third of American university graduates.

Additionally, American schools once had a near monopoly on employing bright university educated women. That monopoly has since retired to the dustbin of history and will not be returning. Our national preoccupation with lowering average class size has also impacted lowered the average effectiveness of the teachers we’ve hired. The average class size in American schools has plummeted since the baby-boomers went through the system, but our test scores have remained flat.

Americans have been obsessed with lowering class size, while Korea has emphasized getting the brightest students possible into the classroom while thinking nothing of packing 40 or more children in a classroom. Who made the right choice?

The most sophisticated analyses of student learning gains have consistently found individual teacher effectiveness far more influential in driving achievement than class-size. Studies conducted tracking individual student scores on a value-added basis, for example, have found that teacher quality twenty times more important than average class size, within the observable range.

Teacher quality trumps class size like Indy’s pistol bests an Egyptian scimitar.

South Korea students clobber American students in international examinations despite spending much less, packing their students into classrooms, and a national income per person around twenty percent lower than that of the poorest American state.

In short, we chose poorly, the Koreans chose wisely. If we are to remedy this situation, we must develop school models which recruit high ability students into the teaching profession, track their performance using value-added methodology, pay them much higher wages commensurate with their performance, and give more children the opportunity to learn from them. Larger class sizes can finance higher teacher pay for highly performing teachers.

The medicine we have been giving our schools- smaller class sizes- is a poisonous drug. Looking ahead, the question becomes: can we break our addiction by emphasizing quality over quantity?


Joanne Jacobs on Bullies

April 25, 2008

Joanne Jacobs has a post today on another bullying incident in Oakland.  This one sounds horrible, as did the Billy Wolfe story (see my earlier post The NYT Bully).  Just because the Billy Wolfe story is more complicated than the NYT reported, doesn’t mean that there wasn’t a bullying problem in his case and shouldn’t cause us to doubt each new story any more than normal skepticism requires. 

Clearly there is a problem out there with violence between students in schools.  Whether that problem has become more common or more severe over time, I don’t know.  Anyone who knows of reliable statistics on this, please pass that along.  The plural of anecdote is not data, so we need more than these compelling stories to get a sense of how widespread and severe this problem is.


Manipulatives Make Math Mushy

April 25, 2008

An interesting item in this morning’s New York Times — Someone has finally done an experimental study on the math instructional technique that emphasizes the use of blocks, balls, and other concrete “manipulatives” to teach math.  Researchers at Ohio State University created an experiment in which they randomly assigned subjects to be taught a new math concept either by focusing on the abstract math rule, focusing on the use of manipulatives, or combining both techniques.  They then tested how well subjects had learned the math concept by having them apply it to a new situation.  It turns out that students taught with manipulatives did the worst, the ones taught abstractly did the best, and the combined approach performed in the middle.  It appears that those taught math with more concrete examples had a harder time transferring that math concept to a different concrete example.  Kids taught math with tennis balls have a harder time applying the principle to railroad cars.


WSJ and Bloomberg Notice the Student Loan Crisis

April 24, 2008

(Guest post by Larry Bernstein)

The Wall Street Journal and Bloomberg have stories on the student loan crisis.  I presume the articles were in response to my post a couple of days ago.

This is typical. I think the WSJ editorial page gets the issue wrong.  The editors blame the current crisis on new Fed limits on the allowable credit spreads.  In addition, there is a mention of an idea to allow the Federal Reserve to accept student loans as collateral at the discount window. 

I don’t think either of these issues is critical.  The key point is that students are defaulting on their loans at a rate much higher than expected.  With higher default rates and worse than expected recoveries, the loans are worth less than par.  State Street, who had bought billions of securitized private student loans in the secondary market, admitted last week that they may need to take reserves equal to as much as 10% of par.

The current crisis is not a funding crisis, or an ability to use the loans as collateral for secured financing by banks.  The problem is a basic financial problem.  The borrowers are unwilling to pay the lenders back.  There are two typical responses to this sort of problem.  The first is to stop lending until we figure out what the likely default rates are going to be and if the business makes economic sense.  This is the current lender response to the increasing rates of default in the subprime residential market.  The second response is to lend, but at much higher interest rates to cover for the additional expected losses from defaults and to cover additional risks of even greater defaults.  The market is seeing both responses from lenders.

What should public policy be for student lending?  This is clearly complicated and depends on your view of the role of government.  Do you think that the federal government should lend directly to students at a below-market rate?  The answer depends on the public’s willingness to accept substantial losses on the loans.  The market price embodies the market’s view of defaults.  Today, the market is saying that the government will lose more than 10% of the loan size.  There are $70 billion of new federally guaranteed loans each year, and both Democratic presidential candidates want to expand the program.

What is the market failure that requires government action?  Why shouldn’t the interest rates on student loans reflect the risk of the loans?  If we let the market work, banks will demand additional collateral (from the parents) at various interest rates to reflect the individual risk of the borrower.  It cannot be that whenever credit spreads go up to reflect greater risk of defaults that the government needs to step in and lend money at a below-market rate.

(As an aside, the current plan to use the FHA to solve the nation’s residential mortgage crisis will most likely result in government losses in excess of the 1980s thrift crisis.  Sadly, many years from now, Congress will investigate how this could have happened.)


The NYT Bully

April 24, 2008

A month ago the New York Times (NYT) carried on its front page the story of “a boy the bullies love to beat up, repeatedly.”  The story was heart-breaking and appealed to everyone who’s been bullied or worried about their children being bullied — that is, almost everyone.  The piece led to appearances on CNN and the Today Show by the boy, Billy Wolfe, countless articles in papers around the country, a flood of sympathetic letters to the NYT, and outrage in the blogosphere.

Billy Wolfe lives in my town, Fayetteville, Arkansas, and some of the incidents described in the article occurred at a school my children attend (although Billy is older and is now at the high school).  The story didn’t fit with what I know about Fayetteville schools. 

Sure enough, a little more than a week after the NYT article, the Northwest Arkansas Times (NAT) disclosed the existence of a police report on Billy Wolfe that suggests that he may have been the bully, or at least played a significant part in instigating the assaults.  The NAT reporting on the police report contains allegations that Billy harassed a student confined to a wheelchair with muscular dystrophy by sneaking up behind him and screaming to aggravate the disabled boy’s sensitivity to noise, by bouncing a rubber ball against the disabled boy’s head, and by calling him “stupid” and a “retard.”  The police report provides further context on the assaults described in the NYT.  One allegedly occurred after Billy called a boy who had just moved from Germany and whose mother had just died of cancer a “”gay [expletive ] German” and then called his “deceased mother a vulgar name. ”  Another incident allegedly occurred after Billy pushed another student.  Billy was accused of picking on other kids, stealing, and intimidating those that he picked on against telling the teacher.

But the NYT article by Dan Barry makes no mention of the police report or the details contained in it.  Nor did Dan Barry’s reporting uncover any of the information from the interviews contained in the Northwest Arkansas Times article.  Instead, Barry simply writes, “It remains unclear why Billy became a target…”  He also declares, “[Billy] has received a few suspensions for misbehavior, though none for bullying.”  It seems the NYT reporter either somehow missed the existence of the police report or decided not to include its contents in his piece.  Either way, it is very sloppy reporting.  I sent an email to the Public Editor of the NYT asking if Barry had seen the police report, and, if he had seen it, why he chose not to include it in his article.  Other than a form letter I’ve received no reply.

Of course, regardless of what Billy may have said to other students, it is wrong for them to hit him.  Furthermore, even if Billy has been a bully of others doesn’t mean that he is not himself being bullied.  And Fayetteville schools deserve some blame for not being on top of this situation better.  But the more complicated picture that emerges after learning of the information in the Nothwest Arkansas Times but excluded from the NYT, is one that looks like school fighting and conflict and not necessarily bullying.  Bullying implies a relatively clear hierarchy of victim and assailant.

But a newspaper article about conflict and some fighting in a small school district in Arkansas wouldn’t have been front page news in the NYT.  Perhaps that’s why Dan Barry preferred his Lifetime Channel movie-version over the more complicated version that the facts seem to support.  Perhaps it wasn’t ambition but laziness that distorted Barry’s article.  Finding the police report and collecting all of the interviews found in the NW AR Times article would have required — uhm — reporting.  It was much easier to take the story that the Wolfes’ attorney was peddling.  And yes, the Wolfes are suing some of the other students and are planning to sue the school district.  Barry’s article may read like a plaintiff’s brief because there actually is a plaintiff’s brief out there.

Others in the blogosphere have covered this story very well.  In particular, see my Manhattan Institute colleague, Walter Olson’s post at Overlawyered.com.  Blogger Scott Greenfield is quoted there with a pretty harsh assessment:

…what is the New York Times thinking? To have its knees cut off by its Northwest Arkansas namesake is humiliating, but to be shown up as deceptive fundamentally undermines its credibility. Without credibility, the Times is just a dog-trainers best friend and a tree’s worst nightmare. …

 The failure of the New York Times to present a full and accurate account of the Billy Wolfe story is disgraceful and unacceptable. … If you’re going to put an article on the front page with a big picture, don’t blow it. The Times did. They should be ashamed.

Unfortunately, the Fayetteville School District is inexperienced with handing national reporters and they are handcuffed in responding to accusations because of student privacy issues and a pending lawsuit.  Dan Barry from the NYT was able to ride roughshod over a small town school district.  Maybe the Gray Lady is the most obvious bully here. 


Cajun Choice

April 23, 2008

(Guest post by Greg Forster)

On a much more serious note (see below), the news that America got a new school choice program last month seems to have slipped by under the radar.

On March 24, Louisiana Governor Bobby Jindal signed SB5, providing a deduction off parents’ personal income taxes for qualified education expenses, including private school tuition. The deduction is worth 50% of the total amount spent on qualifying expenses, up to a maximum deduction of $5,000. For more details on the program see here.

The tax deduction became effective as soon as it was signed, so we now have 22 school choice programs in 14 states plus D.C. All eyes are now on Georgia to see if a tax-credit scholarship program passed by the legislature becomes America’s 23rd school choice program; Governor Sonny Perdue has until May 14 to sign it, veto it, or allow it to become law without his signature.

Personal tax credits and deductions for educational expenses are an unusual way to do school choice; Louisiana’s program is only the fourth of this type. But it’s an approach with a long history. Minnesota enacted a tax deduction for educational expenses in 1955; Iowa enacted a tax credit in 1987; Minnesota added a tax credit on top of its deduction in 1997 (the credit excludes tuition but includes other expenses like books and fees – it’s the only program of this type not to include tuition); and Illinois enacted a credit in 1999.

Personal tax credit/deduction programs tend to be broad in scope but miniscule in magnitude. Only the Minnesota program has an income restriction, so the number of people eligible to participate in these programs is typically very large. Almost 650,000 families benefit from the Iowa, Illinois, and Minnesota programs. On the other hand, the Iowa and Illinois programs provide maximum credits of only $250 and $500 respectively. The Minnesota program is slightly more generous, providing a maximum credit of $1,000 and a maximum deduction of $1,625 in grades K-6 and $2,500 in grades 7-12. And the maximum deduction in Louisiana is $5,000. I don’t know what that works out to in tax savings, but since state tax rates are lower than the federal rate it can’t be that much. Moreover, in most cases the taxpayer does not get a dollar-for-dollar credit or deduction for the money he or she spends; for example, in Louisiana you only get 50 cents on the dollar.

One idea behind these programs is to cut out the middleman and provide school choice as directly as possible. For example, the most important drawback of tax-credit scholarships is that they don’t create a parental entitlement to school choice. The scholarship granting organizations act as gatekeepers, generally favoring low-income parents and thus exacerbating the problem of “targeting” in school choice programs. (Of course, a corresponding advantage is that scholarship granting organizations have flexibility in the distribution of resources; one thing I discovered when I did the research behind this report is that scholarship granting organizations will often step up to provide full-ride scholarships to students facing personal crises such as the death of a parent.) By contrast, both vouchers and personal tax credits/deductions create a parental entitlement to school choice.

I have heard some argue that personal tax credits/deductions are better than vouchers because they cut out the middleman even more completely; supposedly it would be harder to add unnecessary regulations restricting the private schools. But I’ve never been able to understand why this is the case. In both voucher and personal tax credit/deduction programs, the legislature defines which private schools are eligible, and in both cases that’s where the unnecessary regulations get inserted. Why is it harder to do in one case than in the other? Is there some political reason why such restrictions are less likely to be written into the tax code than into other laws? That doesn’t strike me as plausible, but I’d be open to correction if somebody could make a case for it.

The major drawback to these programs is in the structure of state income taxes. Until some state enacts a refundable credit,** the benefit families get from these programs is limited to their total state income tax bill. That’s not a lot of money. And fewer dollars means less choice, as this report helpfully reminds us. Of course, you could in theory pass a refundable credit, but the political obstacles to that would be formidable.

For the record, the Friedman Foundation for Educational Choice, where your humble servant is employed, has no position on whether vouchers, tax-credit scholarships, or personal tax credits/deductions are preferable. Our only goal is to provide a full choice to all students, and in theory all three types of programs can do that. They each have their advantages and disadvantages, but we evaluate each program based on how much choice it provides, not its funding mechanism.

That said, until we achieve universal choice, we’re stuck with limited programs, and in that context each of the three types has its own advantages and disadvantages.

Louisiana is a lot better off for having this program as opposed to no program. It will help a substantial number of families send their children to the school of their choice more easily, and it’s a universal program, establishing the important principle that school choice is good for all, not just for some.

That, and the passage of yet another school choice program is further proof, if further proof were necessary, that school choice is politically stronger than ever.

**CORRECTION: George Clowes has reminded me that the Minnesota tax credit is in fact refundable. That doesn’t really affect my point much, since the Minnesota credit doesn’t include tuition (only other education expenses like books and fees) and this is an even bigger limitation than the “unrefundability” (to use a totally real and not-made-up word) of the credits in other states. Tax credits for private school families won’t provide much choice until we get one that 1) is refundable, 2) isn’t restricted to a small amount of money, and 3) includes tution. Nonetheless, I apologize for the error, and I thank George for bringing it to my attention.


I Pity the Fool!

April 23, 2008

(Guest post by Greg Forster)

                                                                                                                                             George Clowes

Connoisseurs of the art of the smackdown will not want to miss the richly deserved spanking George Clowes administers to two representatives of the blob in the letters section of today’s Wall Street Journal.

Two public school teachers had written in to peddle the Myth of Helplessness*, blaming poor public school performance on what they called “inferior raw material,” i.e. low-income minority students.

Clowes pulls no punches. As the great school reformer Mr. T once said, “Allow me to introduce you to my good friend pain!

Enjoy.

*If you don’t know what the Myth of Helplessness is, for goodness’ sake move out of your mother’s basement and start hanging out with the cool kids.

(Edited to fix the quote from the teachers. The actual quote is even worse than what I had originally put!)


More on Proximity and Power

April 22, 2008

 

Some folks wanted to see more data on my earlier post, Proximity and Power.  In that post I described how Jonathan Butcher and I have actually measured the distance between interest group state headquarters and state capitol buildings.  Our argument is that interest groups want to inflate the perception of their power  by having offices that are very close to the capitol. 

The groups that we normally think are the most powerful are, in fact, the ones regularly closest to the state capitol.  The teacher union excels at proximity, followed by the Trial Lawyers, AARP, and AFL-CIO.  I’m somehow reminded of the MOD Squad in the movie Thank You for Smoking.

I’ve reproduced the results for those four organizations below for each state. The rank is among the 25 most powerful interest groups as identified by Fortune Magazine.  The teacher union is a prince among princes.

  Distance from Capitol (miles) Rank
  AL  
AARP

0.3

5

AFL-CIO

0.6

11

NEA/AFT

0.1

2

AAJ (Trial Lawyers)

0.5

7

  AK  
AARP

Different City

NA

AFL-CIO

0.6

4

NEA/AFT

0.3

2

AAJ (Trial Lawyers)

Different City

NA

  AZ  
AARP

1.5

2

AFL-CIO

6.9

16

NEA/AFT

3.2

11

AAJ (Trial Lawyers)

8.5

19

  AR  
AARP

7.1

17

AFL-CIO

0.7

9

NEA/AFT

0.1

1

AAJ (Trial Lawyers)

0.4

2

  CA  
AARP

0.5

4

AFL-CIO

0.2

1

NEA/AFT

0.2

2

AAJ (Trial Lawyers)

0.6

6

  CO  
AARP

0.4

2

AFL-CIO

5.3

14

NEA/AFT

0.3

1

AAJ (Trial Lawyers)

0.4

2

  CT  
AARP

0.3

1

AFL-CIO

7.6

15

NEA/AFT

0.3

1

AAJ (Trial Lawyers)

0.5

4

  DE  
AARP

Different City

NA

AFL-CIO

1.0

6

NEA/AFT

0.1

1

AAJ (Trial Lawyers)

Different City

NA

  FL  
AARP

0.3

6

AFL-CIO

0.2

3

NEA/AFT

0.3

6

AAJ (Trial Lawyers)

0.1

1

  GA  
AARP

2.5

10

AFL-CIO

0.6

2

NEA/AFT

9.0

14

AAJ (Trial Lawyers)

0.6

2

  HI  
AARP

0.3

2

AFL-CIO

1.4

9

NEA/AFT

2.6

15

AAJ (Trial Lawyers)

0.4

4

  ID  
AARP

9.2

14

AFL-CIO

0.8

9

NEA/AFT

0.1

1

AAJ (Trial Lawyers)

0.8

9

  IL  
AARP

1.1

13

AFL-CIO

0.1

1

NEA/AFT

0.1

3

AAJ (Trial Lawyers)

0.4

9

  IN  
AARP

0.1

3

AFL-CIO

2.8

14

NEA/AFT

0.1

1

AAJ (Trial Lawyers)

0.1

2

  IA  
AARP

0.4

1

AFL-CIO

1.6

7

NEA/AFT

1.3

6

AAJ (Trial Lawyers)

1.2

4

  KS  
AARP

0.4

5

AFL-CIO

4.2

12

NEA/AFT

0.7

8

AAJ (Trial Lawyers)

0.3

3

  KY  
AARP

Different City

NA

AFL-CIO

3.8

3

NEA/AFT

1.3

2

AAJ (Trial Lawyers)

Different City

NA

  LA  
AARP

0.5

1

AFL-CIO

1.3

5

NEA/AFT

5.8

11

AAJ (Trial Lawyers)

1.2

4

  ME  
AARP

Different City

NA

AFL-CIO

5.1

11

NEA/AFT

0.9

4

AAJ (Trial Lawyers)

0.5

2

  MD  
AARP

Different City

NA

AFL-CIO

0.0

1

NEA/AFT

0.3

2

AAJ (Trial Lawyers)

Different City

NA

  MA  
AARP

5.7

13

AFL-CIO

5.4

12

NEA/AFT

0.2

1

AAJ (Trial Lawyers)

18.0

16

  MI  
AARP

0.6

6

AFL-CIO

0.4

4

NEA/AFT

0.4

4

AAJ (Trial Lawyers)

5.3

11

  MN  
AARP

15.0

19

AFL-CIO

0.7

3

NEA/AFT

0.5

2

AAJ (Trial Lawyers)

9.5

16

  MS  
AARP

8.1

14

AFL-CIO

0.3

1

NEA/AFT

0.5

4

AAJ (Trial Lawyers) None NA
  MO  
AARP

Different City

NA

AFL-CIO

0.1

1

NEA/AFT

2.7

10

AAJ (Trial Lawyers)

0.3

3

  MT  
AARP

1.7

11

AFL-CIO

2.4

13

NEA/AFT

0.1

1

AAJ (Trial Lawyers)

1.0

6

  NE  
AARP

0.5

4

AFL-CIO

6.3

17

NEA/AFT

0.0

1

AAJ (Trial Lawyers)

1.1

10

  NV  
AARP

Different City

NA

AFL-CIO

0.7

2

NEA/AFT

Different City

NA

AAJ (Trial Lawyers)

0.2

1

  NH  
AARP

6.6

15

AFL-CIO

0.2

2

NEA/AFT

0.6

6

AAJ (Trial Lawyers)

6.4

13

  NJ  
AARP

15.0

13

AFL-CIO

0.1

4

NEA/AFT

0.5

7

AAJ (Trial Lawyers)

0.0

2

  NM  
AARP

0.5

2

AFL-CIO

Different City

NA

NEA/AFT

2.8

6

AAJ (Trial Lawyers)

Different City

NA

  NY  
AARP

2.3

8

AFL-CIO

0.6

4

NEA/AFT

8.1

17

AAJ (Trial Lawyers)

Different City

NA

  NC  
AARP

0.2

1

AFL-CIO

1.1

11

NEA/AFT

0.7

7

AAJ (Trial Lawyers)

2.4

12

  ND  
AARP

1.6

6

AFL-CIO

1.7

8

NEA/AFT

1.0

1

AAJ (Trial Lawyers)

5.9

15

  OH  
AARP

0.1

1

AFL-CIO

0.6

11

NEA/AFT

0.4

8

AAJ (Trial Lawyers)

0.6

11

  OK  
AARP

9.7

17

AFL-CIO

7.5

13

NEA/AFT

0.7

1

AAJ (Trial Lawyers)

0.8

2

  OR  
AARP

Different City

NA

AFL-CIO

0.8

2

NEA/AFT

Different City

NA

AAJ (Trial Lawyers)

Different City

NA

  PA  
AARP

0.3

3

AFL-CIO

0.1

2

NEA/AFT

0.1

1

AAJ (Trial Lawyers)

Different City

NA

  RI  
AARP

0.5

3

AFL-CIO

0.2

1

NEA/AFT

0.5

3

AAJ (Trial Lawyers)

5.1

16

  SC  
AARP

0.0

2

AFL-CIO

5.4

16

NEA/AFT

7.4

18

AAJ (Trial Lawyers)

1.1

11

  SD  
AARP

Different City

NA

AFL-CIO

Different City

NA

NEA/AFT

0.1

1

AAJ (Trial Lawyers)

0.4

2

  TN  
AARP

0.5

2

AFL-CIO

2.7

10

NEA/AFT

0.9

4

AAJ (Trial Lawyers)

1.6

7

  TX  
AARP

1.1

12

AFL-CIO

0.4

5

NEA/AFT

0.5

7

AAJ (Trial Lawyers)

0.2

1

  UT  
AARP

14.0

14

AFL-CIO

9.7

12

NEA/AFT

10.0

13

AAJ (Trial Lawyers)

1.7

3

  VT  
AARP

0.3

2

AFL-CIO

1.1

10

NEA/AFT

1.8

12

AAJ (Trial Lawyers)

0.2

1

  VA  
AARP

0.4

2

AFL-CIO

8.9

15

NEA/AFT

0.7

7

AAJ (Trial Lawyers)

0.4

2

  WA  
AARP

Different City

NA

AFL-CIO

0.4

1

NEA/AFT

1.2

8

AAJ (Trial Lawyers)

1.9

9

  WV  
AARP

1.9

6

AFL-CIO

1.9

6

NEA/AFT

0.7

2

AAJ (Trial Lawyers)

0.8

3

  WI  
AARP

0.1

2

AFL-CIO

2.1

10

NEA/AFT

3.7

12

AAJ (Trial Lawyers)

0.4

5

  WY  
AARP

0.4

3

AFL-CIO

0.6

7

NEA/AFT

0.2

1

AAJ (Trial Lawyers)

0.3

2

 

 


Florida’s NAEP Scores

April 21, 2008

(Guest post by Matthew Ladner)

Like Greg, I have also been looking at Florida lately. My interest was prompted by Sol Stern’s notion that we ought to give up on school choice and focus on instructional reforms. In City Journal’s debate on Sol’s article, I and others essentially argued that we could walk and chew gum at the same time, pushing both incentive and instruction based reforms. Florida under Jeb Bush and Charlie Crist in fact did this, and the results are breathtaking.

In 1998, the year Bush won election, a stunning 47 percent of Florida fourth-graders scored “below basic” on the NAEP reading test, meaning they couldn’t read at grade level. By 2007, 70 percent of Florida’s fourth graders scored basic or above — a remarkable improvement in less than 10 years.

Best of all, improvements among Hispanic and African-American students helped to drive the overall results. Florida’s Hispanic students now have the second-highest reading scores in the nation; and African-Americans score fourth-highest when compared to their peers. Both groups have a great deal of momentum on their side.

The average Florida Hispanic student score on NAEP 4th grade reading tests (conducted in English mind you) is now higher than the overall average scores of all students in Alabama, Alaska, Arizona, Arkansas, California, Hawaii, Louisiana, Mississippi, Nevada, New Mexico, Oklahoma, Oregon, South Carolina, Tennessee and West Virginia. Florida’s African Americans outscore the statewide average for Louisiana and Mississippi, and are within striking distance of several of these others.

Free and Reduced lunch eligible Hispanics in fact outscore the average for all students among some of these states, including California.

I can’t tell you precisely how much of these gains can be attributed to testing and other such reforms, and how much to choice and other incentive based reforms. What is very obvious is that some of these gains are the result of choice- that much is clear from Jay’s study, Greg’s new study, and from the Urban Institute study. There are also a number of states that have instituted testing and have flat NAEP scores.

The lesson of this is clear- far from being in competition with each other, tough minded testing and choice reforms are quite complimentary to each other.


The Student Loan Crisis

April 21, 2008

(Guest post by Larry Bernstein)

 

When you hear about the current financial crisis, most of the focus is on foreclosed subprime loans.  But, the financial crisis has spread to all financial products as delinquencies have increased for credit cards, auto loans, and other secured and unsecured borrowings.  Direct lenders and securitization lenders are now demanding more spread to compensate for the perceived increased risk of default. 

 

Student loans are no different from any other form of debt.  Defaults have surged in the past few months.  Despite the fact that most loans are guaranteed by parents of the students with terrific FICOs (credit ratings), many more loans are delinquent.  How bad is it?  One of the largest insurance companies that guarantee private student loans filed for bankruptcy last week.  First Marblehead, which securitizes private student loans, stock price is down more than 90% from its highs of last year as investors rightly perceive that First Marblehead’s residual claims on student loan securitizations may not be very valuable.  Bank of America which is one of the largest direct lenders in private student loans announced last week that they will discontinue making private student loans, and Bank of America will only make Federally Guaranteed student loans.

 

Based on these three events described above, the number of private student loans will decline dramatically in the week’s ahead.  There are financial and social consequences to this problem.  Students with limited access to financial means will not be able to attend their school of choice next semester.  For most students, if you cannot pay, you cannot attend.  I suppose, some students will go to school part-time, or will work part-time to make ends meet.  But for many students, they will either choose a less costly collegiate experience, defer, or will discontinue their college education. 

 

I expect for-profit colleges’ earnings to suffer with fewer students.  I have not yet shorted these company’s shares, but I will be looking into it in the days ahead.   We should expect not-for-profit college institutions to suffer as well.  Clearly Harvard will be fine.  Harvard’s endowment and student body can afford the education.  It is the poorer schools with a limited endowment and a student body that depends on private school loans to be truly hurt during this financial crisis.

 

Whenever the financial markets curtail borrowers, there will be those that cry out for additional government assistance.  We are seeing this particularly in the residential home loan market.  The government cannot make the defaults disappear.  The government will be making loans to those citizens who the market believes are not creditworthy or at a rate of interest that is insufficient for private actors to lend.  I fully suspect that if the government increases the loan sizes that it is guarantees, then we should expect substantial losses on the government’s loans.  There is no free lunch. 

 

The time of reckoning for private and public actors is next semester.