Education and Child Policy

October 19, 2020 10:01AM

More Taxpayer Money for More Sheepskins? Bad Idea

It hasn’t been much discussed in the presidential campaign—personality, scandal, and COVID-19 have dominated that—but the idea of spending big taxpayer bucks for “free” college still looms. The Biden campaign is proposing free tuition at four‐​year public colleges for anyone in families earning less than $125,000 a year, and free community college for all, among many promises to lavish taxpayer money on ivory towers. The basic justification seems intuitive: education is good, more education must be better.

But “intuition” and “reality” are not always the same, and pushing more money and people into college in the name of “education” would be like shoveling raw meat into an obese dog in the name of “nutrition.” You can have way too much of a basically good thing.

Let’s start with some money info.

The way the argument goes for drastically increased federal higher education funding is that colleges have had to suck more and more money out of students as state and local governments, which directly fund public four‐​year institutions and community colleges, have been cutting their subsidies. But that is not what the data show.

The State Higher Education Executive Officers Association (SHEEO) helpfully publishes lots of data on public college finances going back to 1980. What they show is that public colleges have increased what they take in through student charges far beyond what they have needed to make up for any lost state and local revenue. This is the case whether inflation is adjusted using the Higher Education Cost Adjustment (HECA), which is supposed to pinpoint costs faced by colleges, or the Consumer Price Index (CPI), which is based on a basket of goods and services families and individuals typically consume. HECA tends to indicate smaller revenue gains for colleges because the prices in its bundle of goods and services have risen faster than what is tracked with CPI, making adjusted past‐​year costs seem higher.

In terms of overall revenue, as you can see below, public colleges have done far more than just make up for lost state and local support. Using HECA, state and local support rose from about $72 billion in 1980 to more than $103 billion in 2019. Meanwhile, revenue through tuition and fees, net of aid using state and institutional funds, went from $16 billion to $75 billion. Both rose markedly, taking total, inflation‐​adjusted revenue from $88 billion to $178 billion. Using CPI (not shown) the total increases were even bigger.

Total public college revenue, inflation adjusted using the Higher Education Cost Adjustment

On an absolute basis, state & local governments have not gotten increasingly tight‐​fisted. How about on a per‐​student basis?

Here one could say that state & local governments haven’t kept up, but only using HECA. And it still does not explain increased revenue through students.

Using HECA, state and local support per student dropped from $10,450 to $9,460 because of huge enrollment increases: from about 6.9 million full‐​time equivalent students to almost 11 million. Meanwhile, per‐​student tuition revenue rose from $2,292 to $6,902. So while state and local support fell $990, money through students rose by $4,610. Even using the index “friendliest” to higher ed, the idea colleges have just been keeping their heads above water is bunk.

Total public college revenue per student, adjusted for inflation using the Higher Education Cost Adjustment

Using CPI, state and local spending rose per student, from $8,803 to $9,460, while revenue through students ballooned from $1,931 to $6,902. So state and local contributions went up $657 and through students $4,971.

Total Revenue per Student, CPI

Were those big enrollment increases off of which colleges made big bucks at least worthwhile? Did they provide much needed human capital to the American economy? The data are clear: No. We have a glut of degrees, not a deficit.

The first thing we know is that, as the New York Fed has reported, about one‐​third of people with degrees are in jobs that do not require them, and this has been consistently the case since 1990.

Underemployment of college grads

But isn’t that going to change? Not anytime soon according to Bureau of Labor Statistics (BLS) data, which show that only about 38 percent of jobs currently require any formal postsecondary education for entry, and only 27 percent require a bachelor’s degree or higher. Yet almost 70 percent of recent high school completers enroll in college. By 2029 the BLS predicts no substantial change in the share of jobs requiring any formal postsecondary ed for entry, with the total rising only to 39 percent, and bachelor’s or higher only to about 28 percent. And even if we see more employers asking for degrees for more job openings it might just be due to a flood of degrees making that easy, not employers hotly pursuing a bunch of valuable, new human capital. As literacy rates in 1992 and 2003 show, college grads and above saw big literacy drops, strongly suggesting degree inflation: more degrees represent less learning on average.

Employment projections by entry-level education requirements
National Assessment of Adult Literacy
National Assessment of Adult Literacy 2

The evidence does not support the federal government paying for more people to go to college. Indeed, it points the opposite way – society would be better off with far less emphasis on the collection of sheepskins.

October 13, 2020 1:10PM

Update on The State of Private Schools under COVID-19

Launching the Center for Educational Freedom’s new book School Choice Myths: Setting the Record Straight on Education Freedom has taken up a lot of my time over the last couple of weeks, so I haven’t been able to post a summary of our data on the health of private schooling under COVID-19. But it’s not too late to pull it together, even as the state of K-12 schooling continues to evolve.

Closures

The good news is we have not seen the kill‐​off of private schools that many—myself included—feared at the outset of lockdowns. Our permanent closure tracker has not recorded a COVID‐​connected closing since September 1 and the total stands at 116 schools, reduced to 111 when school consolidations are considered. That is a tiny fraction of the nation’s approximately 32,500 private schools containing at least one grade K-12.

Permanent Private School COVID Closures by Date 101320

Of course, it is entirely possible that some permanent closures have not come to our attention. Many private schools are very small—almost a third have fewer than 50 students—and some schools may have ceased operations without any public announcement.

In early September we conducted a survey of 400 private schools randomly selected from the federal Private School Universe database and found 6 that had closed since the data was collected in the 2017–18 school year. 4 appear to have closed in 2020, but only 1 with an explicit connection to COVID, 1 before COVID, and 2 announced during the lockdown period but with unknown COVID connections. That suggests that less than 1 percent of private schools have closed due to COVID, consistent with our tracker numbers.

Enrollment

We have also seen private schools lose students, as anticipated. It is difficult for many people to pay tuition when they can access “free” public schools, for which, of course, they have had to pay taxes. It is even harder when families have suffered income reductions and the service was forced online and, hence, was of probably somewhat compromised quality.

According to our survey, about 57 percent of private schools saw enrollment reductions between the previous school year and early‐ to mid‐​September of this year, with 24 percent seeing an increase and 19 percent no change. On average, responding schools lost 14 students, or about a 6 percent enrollment reduction. Those numbers include pre‐​K students, which many schools with kindergarten and above often have. Set aside pre‐​K enrollment and roughly 47 percent of private schools saw declining enrollment, 33 percent increasing, and 21 percent no change. On average schools lost about 6 students.

Private school enrollment changes with pre-k

The 6 percent loss when including pre‐​K students would translate into a loss nationally of about 343,000 students from the most recent federal tally of total private school enrollment, which was from 2017.

This trimming of students—many of whom are likely homeschooling, at least temporarily—has not, apparently, been catastrophic for most schools, and numbers have likely been in flux as public school policies have evolved. But many private schools have thin margins and might not be able to sustain many more losses. As WORLD Radio noted in a story about Christian schools under COVID, which have seen similar enrollment trends to what we found for all privates, “Losing 7 percent of the student body may not sound like a lot, but for Christian schools that operate on tight margins those losses add up.”

Conclusion

Private schools are not folding at the rate we feared, but they are hurting, even as they have responded more quickly to families than have public schools. To retain these diverse institutions—and much more importantly, the ability to choose—money needs to follow children, whether it is via any federal relief that might come down the pike, or state education funding. We need to stop funding institutions and start funding children.

October 5, 2020 2:17PM

We Can Help You, Samantha Bee!

Dear comedian and television host Samantha Bee,

From this new video, I see you have worries about school choice. I get it. We all hear lots of scary stories about freedom. But I have good news for you – we have what you need to sleep well at night (other than watching your show, of course)!

This Wednesday, you could get a free copy of Cato’s new book School Choice Myths, signed by editors Corey DeAngelis and me, that will give you everything you need to see that school choice isn’t the boogeyman. It’s much more like Hulu, Apple TV, and YouTube—those terrific things that enable us to watch not just government TV, but countless shows of our choosing. You know, shows like yours—especially yours—rather than just PBS NewsHour, or Antiques Roadshow, or whatever the British Broadcasting Company—not even our own broadcasting company—deigns to let us colonists watch.

Anyway, how can you get that coveted, free signed copy of School Choice Myths? Register for our online launch event this Wednesday, where not only will you get the book if you submit a question or comment that Corey and I select as one of the best (hint: we won’t know if your writing staff helped!) but you’ll get lots of great information from our expert panel of contributors, also for free!

Free School Choice Myths Contest ad

You really can’t lose!

Of course, you may not win the contest and then would have to buy the book, but it would be well worth the price to set your mind at ease:

  • Worry that school choice programs are unaccountable: Read chapter nine!
  • Think kids remaining in public schools get left behind: See chapters six, seven, eight, and eleven!
  • Despair over “free market fundamentalism”: Not sure what that means, but enjoy chapters ten and twelve (and the entire book if you really just mean “freedom”)!
  • Too much religion (or something like that): Chapters one, three, and four!
  • “Sell our kids off to the free market”: That sounds, like, Hunger Games-level horrible. Oh, the images in your mind! Anyway, see chapter five.

Ms. Bee, all of us at Cato’s Center for Educational Freedom want you to feel better. We hope you’ll tune in Wednesday, and if you’re really on your game, maybe your question or comment will make you a winner—and finally of something you won’t just shove in a closet.

Sincerely,

Neal McCluskey and all of us here at Cato CEF

September 30, 2020 1:27PM

Colleges Shouldn’t Be Able to Get Away with Violating Student Speech Rights

College is a time to think, to learn, to challenge others’ ideas, and to have your ideas challenged in turn. So thought Chike Uzuegbunam when he attempted to share his religious ideas with fellow students and ran into Georgia Gwinnett College’s “speech zone” policy.

Chike decided to share his beliefs, through one‐​on‐​one conversations and handouts, in a large plaza outside the library. Campus police ordered him to stop. They informed him that he could only speak in designated “speech zones.” Chike applied for permission to use a zone, but could only speak briefly before campus police again accosted him. This time he was told that his speech was “disorderly conduct,” which is any speech that causes discomfort, as judged subjectively by whoever might be listening. The police threatened Chike with prosecution and he was frightened into silence.

As a public college, Georgia Gwinnett is bound by the First Amendment not to abridge speech. But the school cordoned off the “free and open expression of divergent points of view” into two miniscule areas of campus, which were only available a few hours a day on weekdays and required a three‐​day advanced reservation. The college had unfettered discretion in approving who may speak and when and how.

Not stymied, Chike and Joseph Bradford—another student discouraged from speaking by the speech code—traded their soapboxes for jury boxes and took the school to court. When challenging unconstitutional speech policies, students may ask for two things: an injunction preventing the school from enforcing the policy against them going forward and money damages for the harm the policy has already done to them.

To get an injunction, the students must themselves be at risk of having their rights violated. This risk ceases to exist if they graduate before the case is over or if the college modifies the policy, but these future considerations do not ordinarily prevent students from seeking damages for past constitutional wrongs. These are a dollar amount expressing how much harm the constitutional violation caused. Violations of the First Amendment often do not cause substantial injuries, however, so victims of these policies often sue for nominal damages—small amounts covering the intangible harm of having a right violated. In a recent ruling, the U.S. Court of Appeals for the Eleventh Circuit decided not to consider nominal damages requests if parties cannot also seek a future injunction or greater damages.

Following that ruling, the district court dismissed Chike and Joseph’s suit, which dismissal the Eleventh Circuit affirmed. Instead of deciding whether the speech code was constitutional, the courts’ new rule forbids students from even challenging a past violation of their First Amendment rights if the school changes its policy, unless they have an injury expressible in a dollar amount.

Chike and Joseph have now taken their case to the Supreme Court. The Cato Institute has joined the Foundation for Individual Rights in Education to file an amicus brief supporting their argument. We argue that nominal damages are an important mechanism for vindicating constitutional rights, particularly in campus speech cases where other forms of relief are often unavailable.

September 28, 2020 10:05AM

Survey: Roughly Half of Private Schools See Decreased Enrollment

During the first few months of COVID-19 lockdowns, supporters of private schooling feared that the sector would take a huge enrollment, financial, and ultimately existential hit. During the summer, however, fears subsided. Cato’s tracker of COVID‐​related private school closings grew to almost 120 schools, but nowhere near mass extinction. And as public schools increasingly announced that they would only operate online to start the new year, anecdotal evidence suggested ramped‐​up private school demand. Meanwhile, national surveys offered mixed clues as to what might be happening to private schools.

To get a quick but more concrete sense of the start‐​of‐​the‐​year enrollment situation, Cato’s Center for Educational Freedom conducted a survey from September 9 to the 18th of 400 private schools with a highest grade of kindergarten or higher, randomly selected from the federal Private School Universe database. We asked only if a school’s enrollment had increased, decreased, or stayed the same from the previous school year, and by how many students it may have changed including and excluding pre‐​K students.

As shown below, we found that when pre‐​K students are included, 57 percent of schools lost enrollment between last school year and the current one, 24 percent saw an increase, and 19 percent remained unchanged.

Private school enrollment changes with pre-k

Excluding pre‐​K students—so just looking at students in the K-12 range—47 percent lost students, 33 percent increased, and 21 percent were unchanged.

Private school enrollment changes without pre-k

What do enrollment numbers look like? Including pre‐​K students, the average school lost slightly fewer than 14 students, and without pre‐​K the average loss approached 6 students. To put those losses in context, the average school that responded to our survey enrolled about 225 students, including pre‐​K, according to the most recent enrollment data we could find. So they experienced, on average, roughly a 6 percent enrollment loss. The range of changes was large, from a gain of 90 students to a loss of 137. Not including pre‐​K students, the range was a gain of 75 to a loss of 100.

Note that one school that replied to our survey closed due to COVID-19. It is included in calculations of shares of schools with increasing, decreasing, or unchanged enrollments but not specific numbers. That school has been added to the closure tracker.

There are important limits to this survey. We conducted it quickly to begin filling a vacuum of information on how private schools were faring as the school year began. We only received 62 usable surveys—a 16 percent response rate—yielding a margin of error of +/- 12 percentage. We did not receive changes specifically for non‐​pre‐​K students from 4 schools that had pre‐​K students, so results excluding pre‐​K students are for only 58 schools, yielding a margin of error of +/- 13 percent. Also, we gathered total previous enrollment data from several sources that might be older than the previous year—we asked schools only for net gain or loss figures—and a handful of losses would be larger than the possibly old total enrollment recorded. We kept numbers as reported. Finally, while the 400 schools contacted were randomly selected, it is not clear that responses were not skewed in some way. That said, one check—the share of schools that are Catholic—suggested responses were close to representative: 21 percent were Catholic, almost exactly matching the Catholic share of all private schools according to recent federal figures. Similarly, Baptist schools composed about 5 percent of our respondents and account for roughly 5 percent of all private schools.

Of course, better polling as the year goes on and deeper analysis are needed, but these findings help provide some broad, early insight into 2020–21 effects of COVID-19 on private schools.

September 18, 2020 12:46PM

Both Libs and Cons Have Driven Us to Trump’s “Patriotic Education”

When President Donald Trump announced that he would sign an executive order creating a commission to promote “patriotic education,” there was much outrage, including “Hitler Youth” and “Trump Youth” trending on Twitter. We do not know exactly what the promised executive order will contain, but worries about the federal government putting unacceptable things into children’s minds are utterly understandable. And this is not just a conservative or liberal problem: both sides are to blame for the real and present danger of federally approved thought.

Both liberals and conservatives have for decades been shoving power over education toward Washington. In the 1960s the feds ignored a clear absence of authority to govern in education and started spending big on schools. That may have been driven largely by liberals such as President Lyndon Johnson, but conservatives got deeply into the game in the 1980s, with highly energetic Secretary of Education William Bennett using his bully pulpit, and federal testing, to push reform from DC. The first President Bush called a summit of governors and created a “national education strategy” with America 2000, which President Clinton – with whom Bush closely collaborated – turned into Goals 2000. The second President Bush championed the bipartisan No Child Left Behind Act, through which the federal government solidified a national regime of standardized testing and “accountability.” And lots of conservatives and liberals, including President Obama, pushed the federally coerced Common Core curriculum standards, while Obama also tried to impose federal answers on hotly disputed social issues.

Lots of good intentions inspired these actions, but the ultimate result was predictable: federal power would be be used to impose on all Americans things that only some Americans could accept. We would even take the kinds of highly personal—and especially painful—values and identity‐​based conflicts we see constantly in one‐​size‐​fits‐​all public schools, including over American history, to a national level. Families would not even be able to move to a new district or state to escape unacceptable teaching – everyone would have to engage in political warfare to make their values, or takes on history, the winner.

By ignoring the Constitution, we have torn down the bulwark intended to protect us from rule by a single government, or a single person. And not just conservatives or liberals are to blame – both sides have dirty hands.

September 14, 2020 3:53PM

The “China Shock” that Helped U.S. Higher Education

As discussed in my recent Policy Analysis on U.S.-China economic engagement, today’s critics of engagement often overstate the harms caused by Chinese goods imports in the years following China’s accession to the World Trade Organization (a.k.a. the “China Shock”) while ignoring trade liberalization’s many benefits during the same period. A new Working Paper from the Center for Global Development drills down on one such benefit: increased U.S. higher education exports to China (i.e., Chinese students attending U.S. colleges and universities). The paper’s abstract summarizes the authors’ findings (emphasis mine):

We highlight a lesser known consequence of China’s growth and integration into the world economy in relation to the United States: the rise of services trade. We demonstrate that the US’s trade deficit in goods cycle back as a surplus in exports of education services. Focusing on China’s accession to the World Trade Organization, we show that Chinese cities more exposed to this trade liberalization episode sent more students to US universities. Results indicate that growth in housing income/​wealth was an important channel that allowed Chinese families in the top of the income distribution to afford US tuition, consistent with large growth in the share of Chinese students who financed their studies using personal funds. Other mechanisms, such as changing returns to education or information flows, appear to play less of a role. We also inform distributional consequences for the US. Trade liberalization relatively induced increases in the shares of Chinese students studying non‐​STEM fields and attending less‐​selective US universities. Student inflows were similar in destinations with low and high levels of human capital, indicating that educational exports dampened regional inequalities. Our estimates suggest that recent trade wars could cost US universities around $1.15 bn in tuition revenue.

Put simply, many of the dollars that Americans sent to China for low‐​skill manufactures returned to the United States in the form of Chinese students’ “full‐​sticker price tuition payments” at colleges and universities around the country. This, in turn, benefited not only those institutions, but also their American students and surrounding communities. (Chinese students, of course, also benefited, as did the United States more broadly.)

Maybe someday the vocal critics of past U.S. engagement efforts might acknowledge these (and the many other) past gains, as well as the future harms of potentially “decoupling” the two economies, but I’m not holding my breath.