Issue brief: Education

Graduation caps thrown in the air

The Electoral Issue:

America spends more per student than many countries whose education system produces better results, putting us at a competitive disadvantage in an economy that increasingly demands an educated workforce.

The Challenge:

To provide a higher-quality primary and secondary education for more students, and to send more students to college, creating an American workforce educated to fill the needs of the 21st century economy.


Global Competition

By almost any measure, the United States lags behind many of its global competitors in the math, science, and reading proficiency of its students.

Perhaps the most prominent global education ranking, the Programme for International Student Assessment (PISA), administered every three years, compares the scores of 15 year olds in most of the developed world and parts of the developing world. The results of the most recent test, administered in 2009, were not encouraging for the United States. Compared to the 34 countries in the Organization for Economic Cooperation and Development (OECD), our 15 year olds ranked 25th in mathematics, 17th in science, and 14th in reading. Ahead of us in every category were the countries that are widely considered our competitors in the 21st century: China, Korea, Japan, much of Northern Europe, and others.

According to a 2010 report from the Harvard Kennedy School of Government, only 6 percent of American students performed at an "advanced" mathematics level, a lower percentage than that seen in 30 other countries.


In 2011, education expenditures comprised two percent of the federal budget, a significant portion that is nonetheless dwarfed by many other budgetary items. State and local governments provide the lion's share of education funding (93 percent, according to the National Center for Education Statistics; the remainder is provided by the federal government.)

Proposals to improve education frequently advocate pouring more money into the system, but there is no conclusive evidence that additional money would produce better outcomes.

In 2009, the U.S. spent 35 percent more per pupil than in 1990. On average, America spends $10,995 per year on each student, which is already more than $2,000 above the average for industrialized countries in the OECD. Many countries who spend less than America on a per-pupil basis, like Japan and Korea, have far more competitive performance indicators.

Harvard's Kennedy School cross-referenced funding increases with performance improvements on a state-by-state basis and found "precious little support for the theory" that more money produces better test scores. Researchers found a "slight positive relationship" between the two variables, but many states posting big gains had not dramatically increased funding, and many that had increased funding demonstrated negligible gains, flummoxing the results.

Teachers: Underappreciated or Coddled?

Depending on who you ask, America's teachers are either the biggest obstacle to reform, or the single most important asset we have in improving our education system. Many conservatives argue that teachers - and their unions - are standing in the way of progress by demanding teacher tenure laws that offer undue job security to even the worst educators.

In New Jersey, for example, before recent reforms, teachers were given lifetime tenure after only 3 years in the classroom, making it very difficult to remove ineffective teachers. New Jersey's education system also operated under a "last-in-first-out" staffing policy, in which any teacher layoffs must first target those educators with the least experience in the classroom. The old system also tied pay primarily to longevity, offering little incentive for teachers to burnish their excellence or for promising would-be teachers to take the plunge. Critics of similar systems contend that it keeps good teachers out of the classroom and bad teachers in the classroom.

Nonsense, say many teachers - the problem with teaching as a profession isn't job security, it's job profitability.

Teachers' salaries, adjusted for inflation, have been declining for 30 years now. They now earn 14 percent less than other professionals with similar levels of education. The average starting salary for a teacher is $39,000. After 25 years on the job, the average salary rises to only $67,000. For many teachers, it's not enough to make ends meet: 62 percent of teachers work outside the classroom for additional income. The effect of these numbers leads to a breathtaking turnover rate: every year, in urban school districts, 20 percent of teachers call it quits. 46 percent of all new teachers leave the profession before their fifth year on the job.

Underperforming Areas

Because education is the purview of local governments, not the federal government, education policies and student performance can vary greatly from state to state. While some states have posted impressive overall results and demonstrated marked improvement in student performance, others continue to grossly underserve their students. Even within specific districts, the quality of schools can vary greatly. Because most localities fund their schools with property taxes, more affluent areas with higher property values tend to appropriate more funding for their schools, while schools in poorer areas tend to be cash strapped. This "funding gap" can create a feedback loop that reinforces existing patterns of excellence and mediocrity - the best schools in the best areas continue to get the best funding, while those schools most in need of improvement get the short end of the stick.

High School Graduation

According to the Department of Education, the averaged freshman graduation rate (AFGR) in 2009 was 75.5 percent. That number was a slight improvement from 2001, when the AFGR was 71.7 percent, but it is still unacceptably low. One in four high school freshmen nationwide will not complete their high school diploma, leaving them ill-equipped for participation in a workforce that increasingly demands the analytical and practical skills that come with secondary and post-secondary education.

Cost of Higher Education

As states grapple with their budget crises, many state governments have responded by reducing the funding they provide for higher education.

Ohio, for example, devoted 17 percent of state expenditures to higher education in the 1970s, a figure that has shrunk to 11 percent today. (To compare, over the same period, prison funding escalated from 4 percent to 8 percent.) Some schools have had to make up the difference by raising tuition rates, charging an increasingly steep price for 2- and 4-year degrees. Ohio's flagship university, Ohio State University, has increased tuition and fees by 60 percent since 2002.

Between 2001 and 2011, according to the College Board, state and local funding per higher education student declined by 24 percent nationwide. During the same period, tuition and mandatory fees at public universities increased by 72 percent. At non-profit private colleges, tuition and fees were hiked 29 percent. Funding is now at a 25-year low, adjusted for inflation, and costs have never been higher.

One result of the rapid escalation of higher-education costs has been an enormous accumulation of student-loan debt. As college becomes more expensive, more students are borrowing more money.

Outstanding student loan debt currently totals over a trillion dollars, surpassing even credit card debt as American households' single biggest financial liability. The balance of federal student loans, which account for 90 percent of all student loans, has grown by 60 percent over the last five years.

According to a Department of Education Survey, approximately 2/3 of all bachelors degree recipients in 2007-2008 took out loans to finance their degree. Among those who graduated in 1992-1993, only 45 percent took out a loan. The average debt among borrowers in 2011 was $23,300, and 10 percent of borrowers owe more than $54,000. For some, it has proven to be too great a cross to bear: one in ten of those who began repaying their loans in 2009 defaulted within 2 years.

And it's not just a personal economic problem, it can have broader effects on consumption and economic growth patterns: a Rutgers University survey of recent college graduates found that 40 percent had delayed a major purchase due to their student loan debt burden.

Next page: The solutions