When President Barack Obama unveiled his new budget at a Baltimore middle school in February, he drew a rare line in the sand aimed at protecting education from the deep cuts promised by a new class of congressional spending hawks.
I am Joel Packer, Executive Director of CEF, the nation’s oldest and largest coalition of education organizations, representing more than 80 national organizations and institutions from Pre-K to graduate education.
As the Commission deliberates over the long-term fiscal challenges confronting the federal government, we come before you to day with one simple message – investments in education are critical to our long-term economic growth and our global competitiveness. Attached to my statement are several charts and graphs that provide additional data on the points I make today.
Increased investments in education are also a moral imperative. Our nation continues to face unacceptable gaps in educational achievement and attainment at all levels of education – student academic achievement, high school graduation, college attendance and college completion. African Americans and Hispanics lag behind their white peers in all of these categories, as do low-income students and students with disabilities.
As an example, looking at fourth grade reading achievement as measured on the 2009 results of the National Assessment of Educational Progress (NAEP), only 15 percent of African American students scored at the proficient or higher level, as did only 16 percent of Hispanic students, compared to 41 percent of white students.
According to the Alliance for Excellent Education, “every year, over 1.2 million students-that’s 7,000 every school day – do not graduate from high school on time. Nationwide, only about 70 percent of students earn their high school diplomas. Among minority students, only 57.8 percent of Hispanic, 53.4 percent of African American, and 49.3 percent of American Indian and Alaska Native students in the U.S. graduate with a regular diploma, compared to 76.2 percent of white students and 80.2 percent of Asian Americans.”
The gaps between English Language Learners (ELLs) and their English-fluent peers also remain wide. The 2007 NAEP Reading results indicate that 30 percent of fourth-grade ELLs scored at or above the basic achievement level in reading compared to 69 percent of the non-ELL students. The 2009 NAEP Mathematics results indicate that 57 percent of fourth-grade ELLs scored at or above the basic achievement level compared to 84 percent of the non-ELL students. The achievement gap is not closing, and ELL enrollment shows few signs of slowing. Based on state reported data, since 2005-06 ELLs have accounted for 10 percent of the total student population. State reported data show that since 2001, increases in ELL enrollment have exceeded 30 percent annually.
Lower levels of educational attainment directly translate into lower levels of earnings, which then translate into lower levels of tax payments and increased levels of government spending on social service programs.
The impact of education on average earnings is startling. In 2006, average yearly earnings for men who had some high school but failed to obtain a diploma was $27,650. For those with a bachelor’s degree it was $60,910 – more than double. For women, the figures show comparable gaps – $20,130 for those without a high school diploma versus $45,4210 for those with a bachelor’s degree.
Looking at the impact of education on unemployment, individuals with less than a high school diploma had an unemployment rate three times that of those with a bachelor’s or higher degree.
Yet, the fastest growing segments of our population are from these very racial and ethnic groups who are still being left behind. According to the Census Bureau, “The United States is expected to experience significant increases in racial and ethnic diversity over the next four decades…Even if net international migration is maintained at a constant level of nearly one million, the Hispanic population is still projected to more than double between 2000 and 2050…”
Between 2006 and 2020, the white population is projected to decline by 6 percent, while African Americans will increase by 10 percent, Hispanics by 33 percent and Asians by 39 percent.
Our failure to close these educational gaps threatens not only the future of tens of millions of children from these groups, but also threatens our long-term economic outlook and our global competitiveness. In fact, it threatens the very fabric of our society as those with lower levels of education are also less engaged in civic activities, have higher rates of crime, and are less healthy.
At the same time that we must address these achievement gaps, our schools and colleges also face record levels of enrollment with projections of additional increases throughout the decade.
According to the National Center for Education Statistics (NCES), “Total public elementary and secondary enrollment is projected to set new records every year from 2009 to 2018.” Enrollments are projected to rise from 49.8 million students to 53.9 million. At the postsecondary education level, enrollment is projected to increase from 17.8 million in 2006 to 20.1 million students in 2017.
Making matters even more challenging, the educational attainment level required for jobs continues to rise. Anthony Carnevale, Director of the Georgetown University Center on Education and the Workforce, estimates that by 2018, nearly two-thirds of all jobs in the United States will require some form of postsecondary education or training. In 1973, just 28 percent of jobs, or less than one-third, required such instruction.
The United States is also losing its edge in the global knowledge economy. According to a July 2009 report, Defining a 21st Century Education:
“America’s high school graduation rate, once the best in the world, now ranks 18th among industrialized OECD countries. As for higher education, “here, too, other countries are passing the United States,” observe Andreas Schleicher of the OECD and Vivien Stewart of the Asia Society. “The United States ranked second in 1995; by 2006, it ranked 13th among 24 countries with comparable data, behind such countries as Australia, Iceland, New Zealand, Finland, Denmark, Poland, the Netherlands, and Italy—and, for the first time, even behind the OECD average.”
“Already, America’s share of the world’s college students has dropped from 30 percent in 1970 to less than half that today. And because of their sheer size, China and India will surpass both Europe and the United States in the number of secondary and postsecondary graduates they produce over the next decade.”
Investments in education directly increase earnings and thus revenues. It is estimated that over the course of their working life, a bachelor’s degree recipient will earn nearly $1 million more than an individual who only has a high school diploma or G.E.D. Individuals with doctoral degrees will earn $1.3 million more than bachelor’s degree recipients. Over the course of a person’s working life (age 25-65), a college graduate is worth $472,000 in tax revenues. This is in contrast to the revenues generated by a high school graduate, which is only $260,000. (Kantrowitz, M., Financial Value of a Higher Education (2007). Washington, DC: NASFAA Journal of Student Aid.
Research has also demonstrated that if we close achievement gaps, our revenues and GDP will significantly increase. According to a 2007 study released by Teachers College, Columbia University:
“We find that each new high school graduate would yield a public benefit of $209,000 in higher government revenues and lower government spending for an overall investment of $82,000, divided between the costs of powerful educational interventions and additional years of school attendance leading to graduation. The net economic benefit to the public purse is therefore $127,000 per student and the benefits are 2.5 times greater than the costs.
“If the number of high school dropouts in this age cohort was cut in half, the government would reap $45 billion via extra tax revenues and reduced costs of public health, of crime and justice, and in welfare payments. This lifetime saving of $45 billion for the current cohort would also accrue for subsequent cohorts of 20-year olds.”
Another recent study concluded:
If the United States had in recent years closed the gap between its educational achievement levels and those of better-performing nations such as Finland and Korea, GDP in 2008 could have been $1.3 trillion to $2.3 trillion higher. This represents 9 to 16 percent of GDP.
If the gap between black and Latino student performance and white student performance had been similarly narrowed, GDP in 2008 would have been between $310 billion and $525 billion higher, or 2 to 4 percent of GDP. The magnitude of this impact will rise in the years ahead as demographic shifts result in blacks and Latinos becoming a larger proportion of the population and workforce.
If the gap between low-income students and the rest had been similarly narrowed, GDP in 2008 would have been $400 billion to $670 billion higher, or 3 to 5 percent of GDP.
However, in spite of these facts, the share of the federal budget devoted to education, as measured by total spending by the U.S. Department of Education, is less than 3 percent of all federal outlays. And based on the Fiscal Year 2011 budget submitted by President Obama, education outlays would decline to 2.2 percent of all outlays by 2015. CEF supports increasing the share of federal spending devoted to education to 5 percent of all outlays.
We also need increased investments in early childhood education, which also pay off. The preliminary results of a randomly selected longitudinal study of more than 600 Head Start graduates in San Bernardino County, California, showed that society receives nearly $9 in benefits for every $1 invested in these Head Start children. These benefits include increased earnings, employment, and family stability, and decreased welfare dependency, crime costs, grade repetition, and special education. (Meier, J. (2003, June 20). Kindergarten Readiness Study: Head Start Success. Interim Report. Preschool Services Department of San Bernardino County.)
Every $1 invested in high-quality pre-k saves taxpayers up to $7. Pre-k results in savings by reducing the need for remedial and special education, welfare, and criminal justice services, according to a number of studies. (Sources: “The Economics of Investing in Universal Preschool Education in California”, Rand Corporation; The High/Scope Perry Preschool Project)
Yet, many education programs have large unmet needs. To cite a few examples:
Fully funding Title I Grants, which serve students at schools with high levels of poverty, would require an appropriation of approximately $35 billion – an increase of more than $20 billion.
Congress acknowledged in 1975 when the IDEA was enacted that the cost of educating a student with disabilities is approximately twice that of educating students who do not receive special education supports and services. When the law was passed, Congress pledged to pay 40 percent of the national average per pupil expenditure for students receiving IDEA services. Unfortunately over the last three decades, the federal government has not fulfilled its fiscal pledge, leaving states and localities to bear the burden of paying the shortfall. The current federal share is only at 17 percent. To achieve the full funding 40 percent level would require an additional $16 billion.
Research conducted by the U.S. Department of Education in 1999 identified over $125 billion in necessary renovation projects in existing school buildings, while other studies looking at both renovation and new construction costs estimated a nationwide need closer to $300 billion.
School library media centers spend an average of $8.50 per child for books – less than half the average cost of one hardcover school library book. In addition, the average national ratio of library media teachers to students is now only 1:856 students, leaving less ability for direct connections between media teachers and students.
The value of Pell grants in meeting college costs has significantly declined. In the 1988-89 school year, the maximum Pell grant covered 50 percent of college costs at four-year public colleges and 20 percent of such costs at four-year private institutions. However by the 2009-10 school year, the maximum Pell covered only 35 percent of average public school costs and 15 percent at private schools.
Of the nation’s 307 million people, 93 million adults do not possess the necessary literacy levels to enter either postsecondary education or job-training programs, according to the 2003 National Assessment of Adult Literacy.
State-funded pre-k programs currently serve just 24 percent of four year olds and 4 percent of three year olds in the U.S.
Solving our nation’s fiscal situation and reducing the debt can’t and won’t happen simply by cutting federal spending, capping discretionary spending and freezing education. Investments in education are investments in our fiscal future and our societal well-being.
Yet to reiterate what I previously said, the share of the federal budget devoted to education, as measured by total spending by the U.S. Department of Education, is less than 3 percent of all federal outlays. When what one earns is increasingly linked to what one learns, when the global leadership of the U.S. is threatened by other countries outperforming us on education, and when the need to close our education gaps is greater than ever, education deserves to, and indeed must, become a larger share of the federal budget.
While we do need to be concerned with the future fiscal burden that unchecked national debt places on our children and grandchildren, we also need to be concerned that we not leave them unprepared for the global economy due to inadequate education.
When our students succeed, our nation succeeds. Thank you for considering our views.
Listen to the February 23 press call on the State Fiscal Crisis, featuring NSBA Executive Director Anne Bryant.
Credit crisis impairs school funding streams. Bailout proposal could improve ability of schools to finance construction, bonds
October 3, 2008
By Frank Wolfe
As the nation’s credit and financial markets navigate turgid waters, the success or failure of a proposed $700 billion bailout of financial institutions could also have an effect on school districts nationwide.
In addition, the huge bailout likely will mean that Congress and a new administration will be under pressure to rein in domestic spending, including education.The Senate approved the bailout package by a 74-25 margin Wednesday, and the House is expected to consider the legislation today.
Already cash-strapped by the inflationary pressures of rising gas and food prices, schools in the last several weeks have been faced with inaccessibility of cheap credit for capital improvements to schools — bonds typically viewed as secure.
As a result of the credit crunch, institutional investors have been demanding higher interest rates on long-term 20-year tax-exempt municipal bonds used to finance school construction, and municipal bond issuances across the country have been delayed or eliminated. In the last several weeks, the rates on the issuance of such bonds have jumped from 4.5 percent to 5.3 percent.
In Maine, School Administrative District No. 51 officials decided this week to delay a $14 million bond for improvements at Greely High School in Cumberland. The district may try to reissue the bonds in early December, when officials hope the market will be more stable, said Joe Cuetara, a financial advisor on the Greely issuance and a senior vice president at the Boston-based Moors & Cabot Investments.
“The problem is we have no liquidity,” Cuetara said. “It’s not credit risk. It’s liquidity risk . ” School districts are increasingly faced with difficult financial choices and must meet daily operating expenses, like payroll, while delaying higher-priced construction of schools and libraries.
In Colorado, school officials fret that a November ballot measure to approve $2.5 billion in construction bonds for 25 school districts may fail and that the same problem as in Maine may arise — the bonds will not find a buyer at affordable interest rates.
“This credit crunch is the newest wrinkle in the worsening economy,” said Ed Kealy, the executive director of the Committee for Education Funding. “A lot of school districts are in their planning process for the next budget cycle. They were beginning to face concerns about the more general problem of the worsening economy. Now it’s been compounded by the unknown and the scale of the bailout. It’s a new phenomenon.
We’re not sure when it’s going to be resolved.” Cuetara said the $700 billion bailout, if passed, will likely stabilize the credit markets and bring long-term bond rates down to a more affordable 5 percent by November.
Steve Larson, a senior financial advisor at the Illinois-based Ehlers & Associates Inc., advised several school districts in Illinois, Wisconsin and Minnesota to not pay the
higher rates and to delay their bond offerings. In one example, the 30,000-student Plainfield (Ill.) Community Consolidated School District 202 delayed a $13 million bond issuance.
School districts must now be extra vigilant about their finances, because failure to do so could lead to a downgrade of their credit rating by Moody’s or Standard & Poor’s, thus limiting their ability to borrow money for capital improvements.
“Some bond insurers have lost their AAA rating,” Larson said. “The credit rating of the school district is now as important as it ever has been. An ‘AA’ rating is now worth a lot more than an ‘A’ rating. Investors are looking for quality without insurance, and they have to look at what the credit agencies are saying about school bonds.”
Inflationary pressures and the upheaval in the home mortgage market have left school districts with increasing worries about repaying debts, said Deborah Rigsby, director of federal legislation at the National School Boards Association.
“State and local governments are seeing a decline in property tax and sales tax revenues, which are used as bond repayment,” she said.
The Built by Bonds Coalition — a group of financial associations, including the National Association of Counties and the Government Finance Officers Association — advised Congress to endorse so-called “advance refundings,” which would allow state and local governments to refinance their bonds when interest rates drop.
Under the 1986 tax law, governmental and 501(c)(3) tax-exempt bond issuers may “advance refund” outstanding bonds.
New Obama Ad Attacks McCain’s Education Record
Alyson Klein, September 9, 2008, Education Week
Roy Romer and Marc Lampkin must have been high-fiving over their breakfast cereal. Or
whatever it is that the leaders of ED in ’08 do to celebrate a prominent place for education in
the presidential campaign.
Democratic nominee Sen. Barack Obama of Illinois released the first (in my memory) TV ad on
education of the general election. So it’s becoming an issue, sorta! Finally!
The ad is mostly an attack on Sen. John McCain’s record on education issues. It doesn’t go
into detail on Obama’s own proposals for schools.
I’ve e-mailed the McCain campaign, and am planning a more thorough fact check, but at first
glance, I would say that at least parts of this ad are misleading or don’t represent McCain’s
current campaign rhetoric.
The ad says that the Arizona senator and Republican presidential nominee is “against
accountability standards.” It’s possible that McCain voted against accountability at some point
during his quarter century in Congress. In light lettering that’s very difficult to read, the ad
cites votes that appear to have occurred as late as Ma y 2001.
Still, I’ve never heard McCain, or any of his advisers, say that he’s against educational
accountability on the campaign trail. Quite the opposite, in fact. McCain voted for the No Child
Left Behind Act in 2001. The nominee and his advisers have said that he still supports the law
and its principles of accountability, and that it needs to be “fixed.”
McCain has been pretty non-specific about exactly what he would change about the law
besides broadly calling for expanding school choice without going into much detail about how
he would do that beyond the federal voucher program for the District of Columbia, and
allowing Title I money for tutoring to flow directly to parents, not districts. But he’s never said
he was against accountability or standards .
The ad also says that McCain “proposed abolishing the Department of Education.” Again, that’s
news to me, at least in the context of the campaign. To back up this claim, the ad cites a news
story from December of 1994 – nearly 14 years ago. I’ve never heard McCain call for scrapping
the department on the trail. It’s possible, of course, that he supported that idea over a decade ago when it was part of the Republican Party platform. But it’s not something he has said he
would do as president.
The ad also claims that McCain’s economic plan “gives $200 billion for special interests while
cutting funding for schools.” I haven’t looked in detail at his economic plan, but McCain has
said he wants to freeze discretionary spending, and his top education adviser, Lisa Graham
Keegan, said that would apply to education programs, such as Title I. Folks like the
Committee for Education Funding’s Ed Kealy would certainly say that level-funding
amounts to a cut, since inflation and increasing enrollment means less money per kid. So,
many would call that a fair criticism, although I’m sure the McCain campaign would take issue
The ad also says that McCain “voted to cut education spending” citing votes as recent as 2005.
I’m going to check into those.
The article discussed presidential candidates John McCain and Barack Obama’s policies on education funding, exploring the fundamental differences in the candidates’ education spending ideas. Dr. Kealy was quoted, saying Obama’s plan could mean a “turning point for education funding, which has only seen modest increases in recent years,” and “that’s is something to hold the new administration accountable to.” Dr. Kealy said that the administration must commit to the new education funding and it must “be there for the long haul.” To access the full Education Week article, click here.