Tag: Neal McCluskey

Remember: The Feds Fund Students

It’s so fun and easy to bash for-profit schools: on the whole their outcomes aren’t good; they don’t look like the ivy-covered institutions we envision when we think of “college”; and it’s easy to assume that anyone who openly seeks profit must have zero compunction about duping the innocent. But guess what? Openly for-profit schools are no more rapacious than putatively not-for-profit institutions, and it’s not the schools that federal money is funding, anyway. It’s students, and if you want to place blame for wasted time and dough, it should be placed on Washington giving college money to anyone with a high school diploma or GED—and that’s a newly heightened level of restriction.

Look at the whole profit thing. It’s true that for-profit schools want to take in more money than their operations cost. But guess what? So do other colleges. As Oklahoma State University professor Vance Fried has estimated, not-for-profit institutions typically bring in between $2,000 and $13,000 more per undergraduate student—depending on school type and inclusion of various subsidies—than it costs to educate him or her.

Of course those schools don’t call this “profit,” primarily because they don’t send it to investors. Instead they spend it on themselves—bolstering administrative ranks, raising salaries, paying more for journals—then call those things “costs” the next year. But the self-interest underlying it is the same: people are making themselves better off through the bills they send to students.

But aren’t for-profits worse performers than not-for-profits? Seemingly yes, but it is very hard to make apples-to-apples comparisons. Indeed, it makes little sense to make policy based on sectors of higher education at all. What should be important is whether an individual school is working, be it a state flagship, its local branch, or the strip-mall Strayer. But if you want to play the sector vs. sector game, look at community colleges. They appear to be atrocious performers—worse than for-profits—with only one out of every five students completing a program within 150 percent of normal time.

The word “appear,” however, is crucial. Schools might be doing the best they can but are working with many people who simply have too little ability, desire, or a combination of the two to handle college work. But as long as those students can get money to pay for college, it’s crazy to think that there won’t be schools to admit them. Indeed, were all schools to refuse to admit large swaths of students the feds deem college-qualified, major federal investigations would almost certainly ensue.

No, the root problem is not the schools (though all sectors seem happy to make big bucks), it’s that the federal government, first and foremost, will give college aid to almost anyone. Indeed, the one time Washington created student aid programs that required some demonstration of aptitude and success—Academic Competitiveness and SMART grants—Sen. Ted Kennedy (D-MA) objected that they abandoned “the federal commitment to prioritize the neediest students.” That the grants were tied to Pell eligibility was apparently irrelevant; they were allowed to die last year.

If you want to really tackle the problems of noncompletion, debt, and overall waste in higher education, the first thing you must do is cease making cheap aid available to students regardless of their demonstrated aptitude or desire. Do that and you would almost certainly see diminution in the size of both the for-profit and not-for-profit sectors. Much more important, you would cease to have so many people squandering both their resources and those of taxpayers.

Unfortunately, making aid contingent on recipients demonstrating real aptitude is not in the best interest of politicians, who maximize their benefit—getting people to vote for them—by maximizing the number of people to whom they give money. Indeed, as we’ve seen, even if we could get politicians to pass even relatively small programs that require recipients do a little more than breathe, it won’t last. That, in addition to the Constitution giving the federal government no authority to be involved in student aid, is why we must phase out federal aid programs. Unless we have the clarity of an absolute prohibition against federal politicians providing aid, it is almost certain that they will give it out, and will do so without regard for what makes even minimal educational sense.

And when things go badly? They’ll just find easily demonized groups—like honestly profit-seeking schools—to scapegoat.

C/P from the National Journal‘s “Education Experts” blog.

Teachers Unions Are But a Symptom of the Disease

Just as some public schooling defenders like to caricature their opponents as self-important, money-grubbing ”corporate reformers” or malevolent destroyers of “public education,” there is a tendency on the other side to attack teachers unions as the root of all evil. They aren’t. They are a natural symptom of a government monopoly that, because it is a monopoly, strongly favors the monopolization of labor. One employer, one employee representative.

Unless someone has compelling evidence to the contrary—I’ve never seen any—teacher union officials and members are no different than anyone else: they are simply trying to get the best deals for themselves.  What separates them from non-unionized workers—and unionized workers in the private sector—is not their desires, but that their employment comes from a system into which ”customers” must pay, and which is controlled completely by politics. Public-sector unions have big advantages in politics, where organization, numbers, and motivation—millions of people advocating for their very livelihoods—translate into power.

That brings us to today’s Wall Street Journal piece on union political spending. That spending is huge, and manifested in far more ways than contributions to candidates. Between 2005 and 2011 the Journal estimates unions spent $3.3 billion on political activities, which beyond candidate donations included everything from trying to persuade members to vote a certain way, to supplying bratwursts to demonstrators in Wisconsin.

There would be no major freedom issue if all of this were spending by unions with completely voluntary membership, and which operated in truly free markets. There would, then, be no compelled support of politicking. But this is absolutely not the case when it comes to teachers unions and other public sector unions.

For one thing, teachers often are, for all intents and purposes, forced to join unions as a condition of employment, even when they are required to ”just” pay big “agency fees” to cover collective bargaining. Moreover, the ultimately taxpayer-supplied dues money is used to get more dough out of taxpayers who have no choice but to be schools’ “customers.” And we’re not talking pocket change here: according to the Journal’s numbers, between 2005 and 2011 the National Education Association spent $239 million on politics and lobbying, and the American Federation of Teachers spent $138 million. And that doesn’t include the outlays of all their state and local affiliates.

Despite those power-wielding expenditures, the members and leaders of teachers unions still aren’t evil. They are normal, self-interested folks. The effects of their actions, however, are to compel people to fund political speech and activities against their will, and often against their personal interests. But we shouldn’t attack unions for that. We must attack the government schooling monopoly.

It’s All Your Fault, Fickle Friends of the Constitution

There’s an interesting convergence in the news this morning, with Kimberley Strassel in the Wall Street Journal and an article in the New York Times tackling President Obama’s trampling of the separation of powers. Strassel is dubbing Obama’s an “imperial presidency,” and while the Times offers a straight news piece about No Child Left Behind waivers, it too features a strong whiff of presidential imperialism:

Congress has tried and failed repeatedly to reauthorize the education law over the past five years because Democrats and Republicans cannot agree on an appropriate role for the federal government in education. And so, in the heat of an election year, the Obama administration has maneuvered around Congress, using the waivers to advance its own education agenda.

It’s easy and fun, of course, to cry imperialism when it’s the other guy’s party in power, and as Strassel points out many on the left employed such condemnation—not without cause—against George W. Bush.  But that’s precisely the problem: Liberals and conservatives both shunt aside the Constitution when it serves their purposes, but act shocked—shocked!—when the feds or the president employ unconstitutional power to do things they don’t like.

Well guess what, fickle friends of the Constitution: You all righteously shut down the containment unit. You’re all at fault for the demons running rampant.

There’s no better example of this than education, an area over which no federal authority exists yet politicians of both parties have ”helped the children” whenever they’ve felt they could get what they wanted. A heavily Democratic Congress and White House gave us the original Elementary and Secondary Education Act—liberals love spending money on schools—and conservatives decried the wasting of taxpayer dough. With NCLB, a largely Republican Congress and White House  escalated federal control—conservatives love being seen as tough guys who impose “accountability”—and many on the left became apoplectic.  Now President Obama is handing out NCLB waivers contingent on states adopting his favored reforms, and many on the right are rhetorical constitutionalists again.

Here’s the lesson: The next time the guy you despise does something you don’t like, remember when you’ve looked the other way as the Constitution was shoved in a drawer, or torn up, in pursuit of what you wanted. Remember, and heap blame on yourself, because it is your fault.

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Want a Disproven Belief? Government Schools Teach Good Science

Much is being made by school choice opponents of a report that a Christian school in Louisiana eligible to receive students in the state’s new voucher program uses a textbook that asserts the Loch Ness Monster is real and a dinosaur. Writes Washington Post education columnist Valerie Strauss:

This is where support of vouchers is leading us — to the public paying for a child to learn that the Loch Ness Monster was a dinosaur and co-existed with humans. This is important to Young Earth Creationists, who believe that Earth was created no longer than 10,000 years ago, not the 4.5 billion years estimated by science. They also believe that dinosaurs were on Noah’s Ark.

If people want to believe this and they want their children to learn it in school, that’s fine. The public shouldn’t have to pay for it.

I can certainly see why paying for this sort of thing would disturb a lot of people – it’s a major reason tax-credit programs, which let individuals and corporations choose to whom they will donate, are preferable to vouchers. Let’s, however, use this to confront another, extremely dubious belief that many would never challenge:  Government schooling leads to good science instruction.

First, no matter how loudly government-failure deniers might protest – the government is omnipotent, dammit! – government schooling does not overcome religious belief. The latest Gallup poll assessing views on human origins came out a few weeks ago, and found as it has since 1982: The vast majority of Americans believe that God created human beings, and a plurality believes that God created us in our “present form.” Only 15 percent hold that human beings evolved without any divine involvement. And this is with roughly 85 percent of students attending public schools.

Next, take a look at overall science achievement. According to the latest National Assessment of Educational Progress results, only 32 percent of U.S. eighth graders are “proficient” in science. And private versus public schools? 43 percent of private school students are proficient, versus 31 percent for public schools. A significant part of the difference is likely that private schools tend to serve better prepared kids, but the data certainly doesn’t suggest that public schooling beats private when it comes to science instruction.

Finally, there’s the reason government schools are so inept at teaching science: All people, no matter what their beliefs, are forced to support public schools – a perfect recipe for wrenching conflict. To avoid war without end, some 60 percent of high school biology teachers gloss over the mega flash-point that is evolution. The result is that no one, no matter what their beliefs, gets coherent biology instruction.

The solution to this is obvious: Let the people go! Let them freely choose what their children will learn, eliminating the need to fight. No longer force them to pay for “free” government schools, then pay again for education they like.

Unfortunately, all too often the self-proclaimed logic-driven defenders of science reject this argument. In part this is because of their heart-felt conviction that all children must learn proper science. That, however, has shackled them to the utterly illogical belief that some way, somehow, human and government reality will be magically overcome.

That’s more than just a little ironic.

Did My Student Loan Rate Rise? I Barely Noticed

We should all be so lucky as to have our crises be like the looming interest rate change on some student loans. Yes, the rate on subsidized federal loans will double on July 1 absent congressional action, but that needs to be put into context to see that it’s a potential “crisis” – as I heard it described on a radio news report last Friday – akin to your yacht sinking. Your toy, bathtub yacht.

Starting July 1, rates on subsidized loans – a subset of federal loans in which taxpayers eat beginning interest payments as well as bearing non-repayment risk – are set to rise from 3.4 percent to 6.8 percent.

That might sound bad, but note that the rates have only been at 3.4 percent for a year. A 2007 law set them on a gradual decline from 6.8 percent to 3.4 percent over five years. So it’s not like 3.4 percent has been the norm for decades…or even two years.

Next, the rate increase will only affect loans originated after July 1. People with existing loans won’t suddenly see the rates on all their subsidized loans double.

Third, while a rate doubling sounds big, the practical effect according to the White House’s own calculations will be to add about $1,000 to an average loan over its lifetime, which is about ten years. That translates into an additional $8.33 per month – less than the cost of a DC movie ticket.

Finally, freezing the rate for another year will do almost nothing for currently suffering middle-class families, unlike what the White House intimated in President Obama’s most recent weekly address. The large majority of loans originated after July 1 won’t even begin to be repaid for at least another year-and-a-half, after rising seniors have graduated and gone through the six-month repayment grace period.

It’s well known that a crisis is extremely useful for affecting political change – just ask Chicago’s mayor – but it often translates into bad policy. And that’s exactly the kind of policy that creating artificially cheap student loans is. They help fuel skyrocketing college prices, subsidize massive college waste, and contribute to millions of people enrolling who either never complete their studies or who finish largely worthless degrees.

All those consequences are problems that Washington really should worry about. But that’s the other thing about a crisis: It’s usually only embraced when it means giving stuff away to buy lots of votes.

Don’t Pop That Champagne Yet

 With its 40th birthday coming on June 23rd, we’ll likely be hearing more and more plaudits for Title IX, the federal law banning gender discrimination in federally funded education activities. But it is hardly clear that the law was either necessary, or beneficial.

It’s certainly not an open-and-shut case, for instance, that Title IX broke open lots of opportunities in higher education that wouldn’t otherwise have existed – yet been in demand – for women. A quick look at women’s percentage of total college enrollment shows that females were gaining classroom seats at a big clip well before 1972. According to federal data, between 1947 and 1972 women’s share of total enrollment was growing at a pace of 0.56 percentage points per year, rising from 29.0 percent to 43.1 percent. From 1972 until 2010, in contrast, the growth was only 0.37 percentage points per year, hitting 57.0 percent in 2010.

Those figures don’t prove, of course, that there was and is no discrimination against women in higher education. They do, however, show that women were moving headlong into college well before Title IX, and today are so much larger a percentage of total enrollees than men that most colleges would be in serious jeopardy were they to deny them things they want. It also suggests that cultural acceptance of women in college and other new roles was changing well before the law was passed, and cultural evolution has probably had a lot more to do with new opportunities opening for women than Title IX.

There are many other powerful arguments to be made against Title IX – the strange preoccupation with sports opens up a slew of them all by itself – but also potent points to be made in its favor. That’s why on June 20th Cato will be hosting a lively debate on the law with both pro- and anti-Title IX speakers. You can register to attend here, or follow the debate online.

It might be Title IX’s birthday, but one of its presents should not be an absence of tough, fair scrutiny.

C/P from the National Journal‘s “Education Experts” blog.

These Reports Prove Aid Doesn’t Fuel Tuition Inflation…Except They Don’t

Today we are once again treated to a declaration that there is simply no way the crazy Bennett Hypothesis – the theory that student aid helps fuel college price inflation – is true. This time, the end-all-debate pronouncement comes from David L. Warren, president of the National Association of Independent Colleges and Universities, who cites three apparently definitive reports as proving aid is not “driving up” costs.

Aside from the problem that the argument is really that aid fuels price increases rather than driving them – the aid is the gasoline, the colleges the car drivers – what do the studies offered by Warren really tell us?

First is the 2001 federal report everyone who wants to declare the Bennett Hypothesis dead loves to cite: “Study of College Costs and Prices, 1988-89 to 1997-98,” from the National Center for Educational Statistics. As Warren accurately cites, the report does say:

Regarding the relation between financial aid and tuition, the regression models found no associations between most of the aid packaging variables (federal grants, state grants, and loans) and changes in tuition in either the public or private not-for-profit sectors.

But, then, it also says this:

[T]here are considerable data limitations in these models: for example, the availability of only one year of financial aid data and a lack of comparably recent financial data (especially for private not-for-profit institutions). IPSFA data on loans include all sources of student loans; federal subsidizedand unsubsidized, institutional, and private loans cannot be disaggregated. In addition, the IPSFA aid variables focus on the packaging of various forms of student aid in terms of the percentage of students receiving aid and the average amount received, and therefore cannot be used to explore the possibility of a revenue interaction at the institutional level between federal aid and institutional aid. Due in large part to the accounting standards used by the institutions themselves, information on financial aid collected through the IPEDS system for the available years is incomplete, especially regarding student loan volume, which cannot be isolated from tuition revenue in the IPEDS Finance survey data. Finally, financial data such as instruction expenditures cannot be isolated to undergraduate students, making any comparison with undergraduate tuition inexact.

Essentially, the report contains a regression based on a change in student aid for just one year and can’t adjust for a whole bunch of important things. In other words, it tells us little and in no way closes the door on Bennett.

Next, Dr. Warren cites a February 1998 commission report in which the commission purports not to have found any evidence that student grants effect college prices, and no “conclusive” evidence that loans enable rising prices. Then again, the Commission did no meaningful empirical analysis of the question, and as dissenting member Francis McMurray Norris objected, “issues such as tenure, cost and value of research, duplication of facilities, teaching loads, and relationship of student loan programs and rising costs have not been addressed.” [Italics added]

Grounds for putting the Bennett Hypothesis in a pine box? Hardly.

Finally, Dr. Warren cites a 2011 GAO report that looked only at the effect of an increase in the federal student loan limit for first- and second-year students, and only tracked three years of prices and enrollment. It concluded that enrollment and prices rose at rates generally consistent with recent “prior years.” Of course, looking at the effect of such a narrow change in overall aid over such a short time period without controlling for myriad variables that impact prices tells us basically bupkis.

The fact is that several empirical studies do show student aid enabling schools to raise their prices, and I have listed many of them. It is also the case, as most studies point out, that it is very difficult to definitively isolate the effects of aid when so many factors – from school type to student characteristics – are in play. That’s when basic logic also has to come in: People in colleges are like everyone else, and will be happy to take more money if it’s available. Aid makes it available.

One thing that cannot be supported is insisting, as Mr. Warren does, that we know for certain there is no connection between student aid and rising prices. That is something that truly has been disproven.