Tag: department of education

Hazy-Eyed Hunter Prepares to Fire on For-Profits

Yesterday, the U.S. Department of Education sent proposed – and  highly controversial – “gainful employment” regulations to the Office of Management and Budget for review, the first step in the process of officially publishing them. The regulations – assuming they haven’t changed drastically from previous proposed versions – would limit the ability of students in vocational postsecondary programs to access federal financial aid if those programs produce debt burdens the regs deem too high, or salaries they deem too low. The exact details on what constitutes ”too high” and “too low” should be revealed soon.

The big problem with this is that it is aimed at easily abused for-profit schools while leaving the rest of waste-drenched higher education untouched. But another problem, the very real risk of bureaucratic bungling, also looms large. Indeed, a story out just today from California notes that the state greatly overestimated how much it would save by cutting Cal Grant eligibility for students at schools that showed up on a recent U.S. Department of Education list of institutions with high three-year loan default rates. The problem: The Education Department had accidentally calculated three-year-and-three-month rates, significantly overstating defaults. In fairness to the Department, it did say the list was unofficial, so California officials also bear a lot of the blame; but it sure doesn’t bode well that the Department would publish something so flawed.

There is a much more effective, and less dangerous, way to hold schools accountable than to have the federal government set blanket, hyper-politicized rules and try to enforce them. It is to have customers consume higher education using their own money rather than having Washington send tens-of-billions of inflation-fueling, extravagance-enabling dollars to students and schools every year. The problem is, that would just make it too hard to buy votes by falsely promising great education for all.

Monday Links

Tight on Standards, Loose Grip on Reality

As promised (actually, a week later than promised) I have read the Fordham Institute “Briefing Book” for reauthorizing the No Child Left Behind Act. As expected, it’s big on trumpeting national standards, and squishy on almost everything else. Perhaps most aggravating, though, is how loose it is in characterizing the views of those of us at the Cato Institute, who apparently are part of the big group of education analysts who love the idea of Washington lavishing money on education but are, presumably, too blinkered to want to get results for it:

 

The local controllers. These folks, led by conservative and libertarian think tanks such as the Heritage Foundation and the Cato Institute, want Uncle Sam, for the most part, to butt out of education policy—but to keep sending money. They see NCLB as an aberrant overreach, an unprecedented (and perhaps unconstitutional) foray into the states’ domain. Many within this faction also favor reform, particularly greater parental choice of schools, but at day’s end their federal policy position resembles that of the system defenders. They want to keep federal dollars flowing, albeit at a much more modest rate than those on the left; but they want to remove the accountability that currently accompanies these monies. They have given up on Uncle Sam as an agent for positive change, period. And they have enormous confidence that communities, states, and parents, unfettered from and unpestered by Washington, will do right by children.

Where, exactly, has someone from Cato written that Uncle Sam should keep dropping ducats on education? Certainly not here, where I call for complete elimination of federal involvement in education save civil rights enforcement, and a return of all federal education funds to taxpayers. You won’t find it here, where Chris Edwards calls for eliminating the U.S. Department of Education and zeroing out all its spending. And you won’t discover it here, where Andrew Coulson and I propose that “NCLB not be reauthorized and that the federal government return to its constitutional bounds by ending its involvement in elementary and secondary education.”

Sadly, reporting the truth doesn’t appear to be as important to Fordham as producing a strawman — some group that’s portrayed as totally irrational, allowing Fordham to show how ”realistic” they are by coming up with relatively reasonable sounding policy proposals. It’s a grating, superficial tactic employed by Fordham that Jay Greene and his gang have long harped on.

The funny thing is, in the end there isn’t anything particularly realistic about Fordham’s proposal. Basically, Fordham would have the federal government force all states to adopt the Common Core standards — while adding science and history standards — to get back money that came from their citizens to begin with, or adopt standards that some state-federal hybrid panel of “experts” deemed “just as rigorous as the Common Core.” This would somehow prevent “an unwarranted intrusion by the federal government in state matters.” Because, of course, it is much less intrusive to have an option of having some federally mandated Frankenstein’s panel tell you if the standards you came up with are as good as the federal standards, or just having the feds set one standard.

Then there’s Fordham’s accountability — er, “transparency” — proposal, which would force states to annually spit out “reams” of data on outcomes “sliced and diced in every way imaginable.” Once the tons of data confetti are dumped, Fordham would rely on public pressure from seeing the mess to force reform. And how would the public force said reform? Don’t worry about it — “realism” dictates that all we need are national curriculum standards, testing, and data, data, data!

So, sadly, Fordham’s “realism” fails where it always seems to fail: In ignoring actual reality. Thanks to the phenomenon of concentrated benefits and diffuse costs that is a basic part of representative government, the people who benefit most directly from specific government policies will be most heavily involved in the politics behind those policies, and will bend them to serve themselves, not the “public good.” In the case of education, the people employed by the schools — the teachers, administrators, bureaucrats, etc. — have the most power, and will gut anything used to hold them accountable, just as they have for decades. And there is nothing — nothing — in the Fordham proposal that will keep this from happening again, no matter how centralized the standards or humongous the data dumps. Indeed, centralized standards provide one-stop shopping for special interests!

Only one thing breaks the concentrated benefits, diffuse costs conundrum, and it is taking government out of the equation and forcing educators to earn the money of customers. But for Fordham and others who, ultimately, seem to want to dictate what every child must learn, that is a bit of realism much too far.

Burke v. Pelosi

Lindsey Burke of the Heritage Foundation has a good post today dissecting Rep. Nancy Pelosi’s recent press release on DC school vouchers.

If anything, Burke goes a little easy on Rep. Pelosi, comparing the maximum value of the vouchers  ($7,500) with the published figure for DC public school spending ($17,600). As it happens, the public school spending figures published by the Department of Education (and the Bureau of the Census) are always badly out of date. That means they don’t take into account the continuing trends of rising overall spending and falling enrollment in DC public schools (let alone inflation). When you break down the DC K-12 education budget for the 2008-2009 school year, as I did in this Excel spreadsheet, it comes out to just over $28,000 per pupil. It’s almost certainly higher today.

What’s more, the average voucher amount is closer to $7,000, so DC schools are underperforming the private voucher schools while spending four times as much per pupil.

Despite this, Rep. Pelosi, President Obama, Education Secretary Arne Duncan, and over 90% of Democrats in the House and Senate oppose the DC voucher program. It’s almost as if politicians care more about special interests and ideology than they do about kids and reality.

The Other For-Profit College Scandal

Because the evidence of wrongdoing and evasion is so clear, and the effect has been so damaging, I have devoted a lot of pixels to the GAO’s horrendous ”secret shopper” report on for-profit colleges, as well as the stonewalling about what caused the initial report to be so biased. A potentially even bigger story, though, is what appears to be the machinations of an unholy alliance of Department of Education officials, Senate HELP Committee chairman Tom Harkin (D-IA), and Wall Street short-sellers hoping to make big bucks off the demise of for-profit schools. This Daily Caller article, and the connected video of Senator Tom Coburn (R-OK), are good places to start learning more about this, as is the website of Citizens for Responsibility and Ethics in Washington.

The problems with understanding scandals like this, of course, are trying to get the truth about things that have gone on almost entirely in real or virtual back rooms; knowing what is legal and what isn’t; and just figuring out who’s who. Such scandals also reveal little about whether for-profit schools are actually more or less effective than other higher ed sectors, arguably the main public policy concern.

What this sort of thing does start to reveal, though, is just how far out of public view policy is often made, as well as how people try to profit directly from government action. In other words, it’s a great case study in public-choice theory, and just how un-Schoolhouse Rock Washington really is.

So I can’t tell you everything about who said what to whom. However, at the very least it is clear, for instance, that famed short seller Steve Eisman had a huge amount to gain by testifying that for-profits are bad and there is a “bubble” in proprietary higher ed about to burst. After all, were either the Education Department or Senator Harkin – or both – to use his testimony to attack for profits, as indeed they have, Eisman would have a highly profitable self-fulfilling prophecy on his hands.

No matter how you feel about for-profit colleges – and my feelings are decidedly mixed– learning about how policy is really made can be a very unsettling thing. In fact, it can make you feel more than just a little sick.

Random Assignment

The Brookings Institution released a new study today on charter schooling—assessing how well it’s working and what the federal government should do about it. One of the recommendations reads as follows:

Student participation in lotteries for admissions to any public [charter] school and the results of such lotteries should be a required student data element in state or district longitudinal data systems supported with federal funds.

Why? Because it would make it a lot easier to measure relative school quality, by permitting more widespread use of randomized, control group experiments. Experiments are certainly great from a researcher’s standpoint, but mandating that schools must admit students on a random basis has a catch:

an observer effect as subtle as an 80-foot fire-breathing robot. One of the reasons markets work is that exchanges are mutually voluntary, and producers and consumers don’t enter into an exchange unless each perceives it to be beneficial. If you eliminate the mutually voluntary character of an exchange in the process of trying to observe how beneficial it is to one of the parties, you’re affecting the very thing you’re trying to measure. It becomes more likely that you will have students assigned to schools that are not well equipped to serve their particular needs, injuring such students’ educational prospects.

Lottery admission to oversubscribed charter schools appeals to people’s desire for fairness, but a much better solution is to adopt a true market approach to education in which oversubscribed schools have not only the freedom but the incentives to expand as demand increases. For-profit enterprises, schools among them, do not generally ignore rising demand for their services. Kumon, the for-profit tutoring service, does not turn students away when it reaches capacity at a given location, it grows that location or opens a new one. As a result, it now serves about four million students in 42 countries.

Rather than figuring out how to ration good schools, why don’t we just unleash the market forces that will grow and replicate them?

I Thought Higher Education Was about Pursuing Truth?

 I have no love of for-profit colleges and universities – they are as greedy at the public trough as any other higher ed sector – but it is becoming increasingly difficult to not get very angry about the treatment they’re receiving in Washington.

Just one day after it was revealed that the GAO had substantially revised a report used back in August to smear proprietary colleges, Sen. Tom Harkin (D-Iowa) – the driving force, along with the U.S. Department of Education, behind the war on profits – released a new report alleging that for-profit schools are ripping off G.I. Bill-using veterans.  At least, that’s what the media stories are suggesting. Unfortunately, I haven’t been able to verify the actual content of the report because as of the time I’m writing this, Harkin hasn’t yet made it publicly available – at least not by clearly posting it on his website. Unfortunately, as with the GAO report and almost everything else that’s gone on with this, the strategy seems to be demonize first, let for-profit schools defend themselves later.

Fortunately, you have a chance to enjoy some rational, informed debate about the for-profit college situation. On November 30, Cato hosted a forum on for-profit higher education, with numerous sides of the debate represented. There was no convict-first approach, and the panelists checked demagoguery at the door.  Unfortunately, the same cannot be said of Sen. Harkin and the other grand inquisitors of for-profit schools.