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Introductory Notes

This research is based upon the most recent available data in 2021–2022. Unless otherwise stated, dollar figures from earlier years are adjusted for inflation to make them consistent in purchasing power with modern dollars.

In keeping with Just Facts’ Standards of Credibility, all charts in this research show the full range of available data, and all facts are cited based upon availability and relevance, not to slant results by singling out specific years that are different from others. Likewise, data associated with the effects of education in different geographical areas represent random, diverse places in which such data is available.

Many of the facts in this research reveal associations between education and other variables. These relationships may be caused in part (or whole) by factors that are related to education but not necessarily caused by education. For example, individuals with high intelligence and discipline tend to excel in education and obtain more of it, but they also tend to earn more money regardless of their education. Hence, the higher earnings of people with more education can be caused by factors beyond their education.[1] [2] [3] [4] [5]

Likewise, student achievement is often affected by family and cultural influences. Thus, the test scores of students at certain schools may be caused by factors other than the schools.[6] [7]

In attempting to isolate the effect of a single factor on a certain outcome, researchers often use statistical techniques to “control” for the effects of other variables. However, these techniques cannot objectively rule out the possibility that other factors are at play. This is called “omitted variable bias.”[8] [9] [10] [11] [12] [13] Moreover, the most common method used to control for multiple variables is prone to other pitfalls that can lead to false conclusions about causes and effects.[14] [15] [16] [17]

In the social sciences, the surest way to determine the effect of one factor upon another is by examining random, experimental data. An example of this is the outcomes of students who won and did not win a random lottery for admission to a certain educational program. Studies of such data can control for the impact of all confounding variables and allow for sound conclusions about cause and effect. However, these analyses sometimes have defects and should be interpreted with caution.[18] [19] [20] [21] [22] [23] [24] [25]

Collective Spending

* In 2020, federal, state, and local governments in the U.S. spent $1,036 billion on education.[26] This amounts to $8,069 for every household in the U.S.,[27] 5.0% of the U.S. gross domestic product,[28] and 12% of government current expenditures.[29] [30] These figures do not include:

  • land purchases for schools and other facilities.[31]
  • some of the costs of durable items like buildings and computers.[32]
  • the unfunded liabilities of post-employment non-pension benefits (like health insurance) for government employees.[33] [34] [35] [36] [37] [38] [39]

* Government education spending in 2020 was comprised of:

  • $719 billion on elementary and secondary education.
  • $218 billion on higher education.
  • $100 billion on libraries and other education.[40]

* Relative to other types of government spending in 2020, education spending was:

  • 45% lower than spending for healthcare.
  • 13% higher than spending for national defense and veterans’ benefits.
  • 2.5 times higher than spending for public order and safety, including law enforcement, courts, prisons, fire protection, and immigration enforcement.[41]

* During 2021, private consumers and nonprofit organizations in the U.S. spent about $366 billion on formal education. This amounts to 1.6% of the U.S. gross domestic product and $2,818 for every household in the U.S.[42] [43] [44] [45] [46]

* Relative to other spending by private consumers and nonprofit organizations in 2021, education spending was:

  • 58% lower than spending on motor vehicles and parts.
  • 38% lower than spending on clothing and footwear.
  • 5% lower than spending on alcoholic beverages.[47]

Collective Outcomes

Earnings

* In 2020, U.S. residents aged 25 to 64 reported average cash earnings of $50,251.[48] Cash earnings do not include non-cash compensation, such as employee fringe benefits.[49]

* In 2020, 79% of U.S. residents aged 25 to 64 reported at least some cash earnings, and 21% did not report any cash earnings.[50]

* Among U.S. residents aged 25 to 64 who reported cash earnings in 2020, average cash earnings were $63,553. Among these same people, median cash earnings were $47,754.[51]

* Click here for more data on education and earnings.


Practical Literacy

* Per the U.S. Department of Education:

As a part of their everyday lives, adults in the United States interact with a variety of printed and other written materials to perform a multitude of tasks. A comprehensive list of such tasks would be virtually endless. It would include such activities as balancing a checkbook, following directions on a prescription medicine bottle, filling out a job application, consulting a bus schedule, correctly interpreting a chart in the newspaper, and using written instructions to operate a voting machine.
A common thread across all literacy tasks is that each has a purpose—whether that purpose is to pay the telephone bill or to understand a piece of poetry. All U.S. adults must successfully perform literacy tasks in order to adequately function—that is, to meet personal and employment goals as well as contribute to the community.[52]

2017 Skills Assessment

* In 2017, the Department of Education assessed the reading, math, and computer skills of working age U.S. residents.[53] [54] [55] While the actual questions on the test are not available to the public, here are some sample questions:[56]

  • 70% of U.S. adults were able to answer a question similar to this one requiring the ability to compare data in a table to a chart:
The factory manager checked this graph that had been prepared using the data in the table for 2011. He noticed that two bars were incorrect. Click on the two incorrect bars on the graph.
Program for the International Assessment of Adult Competencies Numeracy Item Level 2

[57] [58] [59]

  • 37% of U.S. adults were able to answer a question similar to this one requiring basic logic, addition, and division:
How much would you pay during the sale if you purchase the two pairs of shoes shown?
Program for the International Assessment of Adult Competencies Numeracy Item Level 3

[60] [61] [62]

  • 10% of U.S. adults were able to answer a question similar to this one requiring awareness of fact that “mean” is another word for “average” and the ability to calculate a simple average:
What was the mean for the total expenditures over the three months?
Program for the International Assessment of Adult Competencies Numeracy Item Level 4

[63] [64] [65]

2003 Literacy Assessment

* In 2003, the Department of Education assessed the English literacy skills of U.S. residents aged 16 and older. The full assessment was nationally representative except for 5% of the population who were completely illiterate in English and Spanish or unable to answer very simple questions.[66]

* Below are some examples of the questions posed in the full assessment, along with the portions of people who answered them correctly:

  • 82% correctly answered this question requiring the ability to search and interpret text:
Refer to the chart to answer the following question. For the year 2000, what is the projected percentage of Black people who will be considered middle class?
National Assessment of Adult Literacy Question N120601

[67]

  • 60% correctly answered this question requiring the ability to search text, interpret it, and calculate using addition:
Refer to the medicine label to answer the following question. The patient forgot to take this medicine before lunch at 12:00 noon. What is the earliest time he can take it in the afternoon?
National Assessment of Adult Literacy Question C080101

[68]

  • 46% correctly answered this question requiring the ability to search text, interpret it, and calculate using multiplication:
Refer to the article below to answer the following question. Suppose that a family’s budget for one year is $29,500 and that there is one child in the family. Using the percentage given in the article, calculate how much money would go toward raising the child for that year.
National Assessment of Adult Literacy Question N130901

[69]

  • 18% correctly answered this question requiring the ability to search text, interpret it, and calculate using multiplication and division:
Refer to the advertisement for the Carpet Store on page three of the newspaper to answer the following question. Suppose that you want to carpet your living room which is 9 feet by 12 feet, and you purchase DuPont Stainmaster carpet at the sale price. Using the calculator, compute the total cost, excluding tax and labor, of exactly enough carpet to cover your living room floor.
National Assessment of Adult Literacy Question N091001

[70]

  • 11% correctly answered this question requiring the ability to examine a data table, draw inferences from it, and accurately express them:
Refer to the table on the next page to answer the following questions. Using the information in the table, write a brief paragraph summarizing the extent to which parents and teachers agreed or disagreed on the statements about issues pertaining to parental involvement at their school.
National Assessment of Adult Literacy Question N100701

[71]

* Per a book about productivity published by the International Labour Office:

There are two main goals of pre-employment education: to create productivity awareness and to prepare youth for productive work by teaching the necessary knowledge and skills. Unfortunately, too much attention is paid to developing formal knowledge and too little to practical skills.
Some prestigious educational institutions place too much emphasis on purely academic matters instead of teaching people how to manage factories and shop-floor production. Too much emphasis is still placed on management sciences and research instead of on preparing creative entrepreneurs capable of innovating, and of organizing and managing work.
A change of emphasis from a knowledge-based or academic system of education (both secondary and higher) to one based on problem-solving and the completion of concrete tasks would result in an improvement in the productivity culture.[72] [73]

Whole-Person Development

* In 1841, Horace Mann, the “father” of the modern public education system in the U.S., claimed:

The Common [i.e., public] School is the institution which can receive and train up children in the elements of all good knowledge, and of virtue, before they are subjected to the alienating competitions of life. This institution is the greatest discovery ever made by man;—we repeat it, the Common School is the greatest discovery ever made by man.
Let the Common School be expanded to its capabilities, let it be worked with the efficiency of which it is susceptible, and nine tenths of the crimes in the penal code would become obsolete; the long catalogue of human ills would be abridged; men would walk more safely by day; every pillow would be more inviolable by night; property, life, and character held by a stronger tenure; all rational hopes respecting the future brightened.[74] [75] [76] [77]

* Various federal agencies have reported that two-thirds to three-quarters of all 17- to 24-year-olds in the U.S. are unqualified for military service because of poor physical fitness, weak educational skills, illegal drug usage, medical conditions, or criminal records:

  • Based on data from the Pentagon, a 2009 study conducted by the U.S. Secretary of Education and a team of retired military officers found that 75% of young adults are unqualified for military service.[78]
  • A 2013 Department of Defense study found that this figure is 71%.[79]
  • In 2014, the commander of the U.S. Army Recruiting Command reported that the figure is 77.5%.[80]

* A 2001 study of high school dropouts published in the American Economic Review found:

  • “It is common knowledge outside of academic journals that motivation, tenacity, trustworthiness, and perseverance are important traits for success in life.”
  • “It is thus surprising that academic discussions of skill and skill formation almost exclusively focus on measures of cognitive ability and ignore noncognitive skills.”
  • “Studies … demonstrate that job stability and dependability are traits most valued by employers as ascertained by supervisor ratings and questions of employers….”
  • “Our finding … demonstrates the folly of a psychometrically oriented educational evaluation policy that assumes cognitive skills to be all that matter.”[81]

K–12 Costs

Public Schools

* In the 2018–19 school year, governments in the U.S. spent an average of $15,621 for every student enrolled in K–12 public schools.[82] [83] This figure doesn’t include:

* A scientific, nationally representative survey commissioned in 2021 by the journal Education Next and the Kennedy School of Government at Harvard University found that U.S. adults on average estimate that their local public schools spend $8,719 per student.[98] [99] [100]

* The average class size in public schools is 22.6 students.[101]

* In the 2018–19 school year, the average spending per public school classroom was about $353,028.[102] This excludes the items in the bullet points above.[103]

* A scientific, nationally representative survey commissioned in 2019 by Just Facts found that 53% of voters believe the average spending per public school classroom is less than $150,000 per year.[104] [105] [106]

* Excluding the items in the bullet points above, the average inflation-adjusted spending per public school student has risen by 25% since 2000, 101% since 1980, 4.0 times since 1960, and 24 times since 1920:[107]

Inflation-Adjusted Public School Spending Per Student

[108]

* Since at least the early 1970s:

  • state governments have paid a growing share of the education expenses of low-income school districts in order to equalize their funding with higher-income districts.[109] [110]
  • school districts with higher portions of minority students have spent about the same average amount per student as school districts with smaller portions of minority students.[111] [112] [113] [114]

* Since at least 1994, school districts with higher portions of poor students have spent about the same average amount per student as school districts with smaller portions of poor students.[115]

* Adjusted for the cost of living in different states, the average spending per public school student in the 2018–19 school year ranged from $10,661 in Idaho to $26,913 in the District of Columbia. (This excludes state administration, unfunded pension liabilities, and non-pension post-employment benefits.[116])

Average Spending Per Public School Student, Adjusted for States’ Costs of Living

[117]


Private Schools

* In the 2017–18 school year, private consumers, nonprofit organizations, and governments spent an average of about $8,499 for every student enrolled in private K–12 schools.[118] [119] [120] [121] [122] [123]

* The average class size in private schools is 17.4 students.[124]

* In the 2017–18 school year, the average spending per private school classroom was about $147,883.[125]

* In the 2011–12 school year (latest available data), the average full tuition for students in private K–12 schools was $12,419. Full tuition or “sticker price” is “the highest annual tuition charged for a full-time student.” The actual amounts paid by individuals are lower if they receive discounts for reasons such as having low income, siblings in the school, or a parent who is a teacher. For different types of private schools, the average full tuition varied as follows:

School Type

Tuition

Catholic

$7,967

Other religious

$10,049

Nonsectarian

$24,874

[126] [127]


Homeschooling

* A nationwide study of 11,739 homeschooled students during the 2007–08 school year found that parents spent a median of $400 to $599 per student on “textbooks, lesson materials, tutoring, enrichment services, testing, counseling, evaluation,” and other incidentals.[128] [129] Regarding these findings:

  • The study was based on a survey with a response rate of approximately 19%.[130] Thus, the results are not definitive.[131] [132] [133]
  • Adjusted for inflation into 2021 dollars, the median annual cost to educate a homeschooled student ranged from $536 to $803.[134]
  • These figures do not account for the cost of parental time investment or the value of being able to live in areas without regard for the quality of the local schools.[135]

Sources of Funding

* From 1920 to 2019, the portion of K–12 public school funding provided by:

  • local governments decreased from 83% to 45%.
  • state governments increased from 16% to 47%.
  • the federal government increased from 0.3% to 8%.
Sources of K–12 School Funding

[136]

* In the 2018–19 school year, public school revenues came from the following sources:

Source

Portion of Revenues

Federal Government

8%

State Governments

47%

Local

45%

Property Taxes

37%

Other Government Revenues

7%

Private Revenues

2%

[137]


Spending by Function

* In the 2018–19 school year, 52% of public education spending was used for student instruction.[138] (This excludes state administration, unfunded pension liabilities, and non-pension post-employment benefits.[139]) The remainder was spent on:

Function

Portion of Total

Property purchases and building construction

10%

Operations and maintenance

8%

Administration

7%

Student guidance, health, attendance, and speech pathology services

5%

Instructional staff services, such as curriculum development, training, and computer centers

4%

Student transportation

4%

Food services

3%

Interest on school debt

3%

Other

4%

[140]

* In the 2018–19 school year, 69% of public school expenditures were spent on government employee benefits and salaries.[141] (This excludes state administration, unfunded pension liabilities, and non-pension post-employment benefits.[142])

* In 2020, 49% of all compensation for state and local government employees was paid to people who work in education.[143] This includes salaries and benefits.[144] [145] [146] [147] [148] [149]


Teacher Compensation

* In the 2020–21 school year, the average immediate costs to taxpayers of compensating each full-time public school teacher in the U.S. were:

  • $65,090 in salary, or 66% of the total.
  • $33,048 in benefits (such as health insurance, paid leave, and pensions), or 34% of the total.
  • $98,138 in total compensation.[150]

* Immediate costs of compensating teachers do not include unfunded pension liabilities and non-pension post-employment benefits like health insurance.[151] [152] [153] [154]

* Adjusted for the costs of living in different states, the average immediate costs of compensating each full-time public school teacher in the 2020–21 school year ranged from $74,238 in Florida to $121,173 in Massachusetts.[155]

* Full-time public school teachers work an average of 1,490 hours per year, including time spent for lesson preparation, test construction and grading, providing extra help to students, coaching, and other activities.[156] [157] [158] [159]

* Full-time private industry workers work an average of 2,045 hours per year, or about 27% more than public school teachers. This includes time spent working beyond assigned schedules at the workplace and at home.[160]

* Accounting for the disparity between the work hours of public school teachers and private industry workers, the annualized immediate cost of compensating each full-time public school teacher in the 2020–21 school year was a nationwide average of $134,693.[161] [162]

* Adjusted for the costs of living in different states, the average annualized immediate costs of compensating each full-time public school teacher in the 2020–21 school year ranged from $101,890 in Florida to $166,307 in Massachusetts:

Average Annualized Immediate Compensation Per Public School Teacher, Adjusted for States’ Costs of Living

[163] [164]


* In the 2017–18 school year (latest data), the average base salary for full-time public school teachers was 28% higher than for full-time private school teachers.[165]

* In March 2020, the average immediate cost per contract hour of compensating public school teachers and private school teachers varied as follows:

Compensation Component

Cost Per Contract Hour

Public School

Private School

Public School Premium

Wages and salaries

$45.29

$38.33

18%

Benefits

$23.56

$13.22

78%

Total compensation

$68.85

$51.55

34%

[166]

* The following caveats apply to the data above:

  • Immediate costs do not include unfunded pension liabilities and non-pension post-employment benefits like health insurance.[167] [168] [169] [170] These costs are common in the government sector and rare in the private sector.[171] [172]
  • Contract hours do not include the added time that teachers work beyond their contractual schedules for lesson preparation and other nonclassroom activities.[173] In 2010, full-time private school teachers worked an average of 11% more hours than full-time public school teachers.[174]

K–12 Outcomes

General

* In the U.S., all 50 states provide children with at least 13 years of taxpayer-financed education from kindergarten through 12th grade.[175]

* The average public school year is 179 days, and the average school day is 6.7 hours not including transportation and extracurricular activities.[176]

* In 2019, approximately 88% of K–12 students were enrolled in public schools, 10% were enrolled in private schools, and 2% were homeschooled.[177] [178]

* Among public school students who began high school in 2015, 86% graduated within four years. This was true for:

  • 93% of Asian students.
  • 89% of white students.
  • 82% of Hispanic students.
  • 80% of black students.
  • 74% of American Indian/Native Alaskan students.[179]

* In 2020, U.S. residents aged 25 to 64:

  • with some high school education who did not graduate high school reported an average of $14,125 in cash earnings.
  • with a high school degree and no further education reported an average of $24,430 in cash earnings.[180] [181]

* Click here for more data on education and earnings.


College Readiness

* In 2021, 38% of high school students who graduated that year took the ACT college readiness exam.[182] Among these graduates, 25% met ACT’s college readiness benchmarks in all four subjects (English, reading, math, and science). For each subject, the rates of college readiness were as follows:

  • English – 56%
  • Reading – 44%
  • Mathematics – 36%
  • Science – 35%[183]

* Among high school students who graduated in 2021 and took the ACT college readiness exam, the following racial/ethnic groups met ACT’s college readiness benchmarks in all four subjects:

  • Asian – 52%
  • White – 31%
  • Hispanic – 14%
  • Pacific Islander – 11%
  • American Indian – 7%
  • African American – 6%[184]

International Comparisons

* In 2017, the U.S. ranked 4th among 37 developed nations in average spending per full-time K–12 student. The average spending per U.S. pupil was 37% above the average of these nations.[185] [186]

Math

* In math tests administered by the International Mathematics and Science Study to 4th grade students during 2015, U.S. students ranked 14th among 48 nations. The average score of U.S. students was 8% above the average of all tested nations.[187]

* In math tests administered by the Program for International Student Assessment to 15-year-old students during 2018, U.S. students ranked 31st among 37 developed nations. The average score of U.S. students was 2% below the average of all tested nations.[188] [189] [190]

* U.S. students outperformed the following nations on the 4th-grade math exam but underperformed them on the 15-year-old math exam: Australia, Canada, Czech Republic, Finland, France, Germany, Hungary, Italy, Lithuania, Netherlands, New Zealand, Poland, Slovenia, Sweden, and Slovak Republic. U.S. students did not move ahead of any other nation between the 4th grade and 15 years old.[191] [192]

Reading

* In reading literacy tests administered by the Progress in International Reading Literacy Study to 4th grade students during 2016, U.S. students ranked 15th among 50 nations. The average score of U.S. students was 8% above the average of all tested nations.[193]

* In reading literacy tests administered by the Program for International Student Assessment to 15-year-old students during 2018, U.S. students ranked among 36 developed nations. The average score of U.S. students was 4% above the average of all tested nations.[194] [195] [196]

* U.S. students outperformed Canada and New Zealand on the 4th-grade reading exam but underperformed them on the 15-year-old reading exam. U.S. students moved ahead of Hungary, Latvia, Norway, and the United Kingdom between the 4th grade and 15 years old.[197] [198]

Spending

* In 2013, Randi Weingarten, president of the American Federation of Teachers labor union, stated:

When people talk about other countries out-educating the United States, it needs to be remembered that those other nations are out-investing us in education as well.[199]

* In 2013, the U.S. ranked 5th among 33 developed nations in average spending per full-time K–12 student. The average spending per U.S. student was 28% above the average of these nations, and U.S. 15-year-olds ranked 19th in reading and 30th in math.[200] [201] [202]

* Among the same nations, U.S. 15-year-olds did not match or outperform any nation in both reading and math that outspent the U.S. The following nations matched or outperformed the U.S. in both reading and math while spending less than the U.S.:

Nation

U.S. Spending Premium

Math Advantage Over U.S.

Reading Advantage Over U.S.

Belgium

2%

8%

0%

United Kingdom

3%

5%

0%

Denmark

6%

9%

1%

Sweden

9%

5%

1%

Netherlands

12%

9%

1%

Germany

15%

8%

2%

France

22%

5%

0%

Finland

24%

9%

6%

Japan

24%

13%

4%

Australia

25%

5%

1%

Ireland

27%

7%

5%

New Zealand

32%

5%

2%

Slovenia

33%

9%

2%

Portugal

35%

5%

0%

South Korea

42%

12%

4%

Spain

53%

3%

0%

Estonia

75%

11%

4%

Poland

78%

7%

2%

[203] [204] [205]


Historical Perspective

* In 1885, the Jersey City, NJ school district spent an average of $13.24 over the course of the year for each of the 14,926 students in average daily attendance.[206] Adjusted for inflation in 2021 dollars, this is an average of $432 per student per year.[207]

* Below are the arithmetic and algebra questions from the 1885 high school entrance exam in Jersey City, NJ. In order to enter high school, students had to score at least 75%. A copy of the full test and the names and scores of all passing students are shown in this footnote.[208]

Arithmetic

  1. If a 60 days note of $840 is discounted at a bank at 4½% what are the proceeds?
  1. Find the sum of √16.7281 and √.72¼.
  1. The interest of $50 from March 1st to July 1st is $2.50. What is the rate?
  1. What is the cost of 19 cwt. 83 lb. of sugar at $98.50 a ton? What is discount? A number?
  1. Divide the difference between 37 hundredths and 95 thousandths by 25 hundred thousandths and express the result in words.
  1. The mason work on a building can be finished by 16 men in 24 days, working 10 hours a day. How long will it take 22 men working 8 hours a day?
  1. A merchant sold a quantity of goods for $18,775. He deducts 5% for cash and then finds that he has made 10%. What did he pay for the goods?
  1. A requires 10 days and B 15 days to do a certain piece of work. How long will it take A and B working together to do the work?
  1. By selling goods it 12½% profits, a man clears $800. What was the cost of the goods, and for what were they sold?
  1. A merchant offered some goods for $1170.90 cash, or $1206 payable in 30 days. Which was the better offer for the customer, money being worth 10%?

Algebra

  1. Define Algebra, an algebraic expression, a polynomial. Make a literal trinomial.
  1. Write a homogeneous quadrinomial of the third degree. Express the cube root of 10ax in two ways.
  1. Find the sum and difference of 3x−4xy+7cd−4xy+16, and 10ay−3x−8xy+7cd−13.
  1. Express the following in its simplest form by removing the parentheses and combining: 1−(1−a)+(1−a+a2)−(1−a+a2−a3).
  1. Find the product of 3+4x+5x2−6x3, and 4−5x−6x2.
  1. Expand each of the following expressions and give the theorem for each: [a+4]2, [a2−10]2, [a+4] [a−4].
  1. Divide 6a4+4a3x−9a2x2−3ax3+2x4 by 2a2+2ax−x2.
  1. Find the prime factors of x4−b4 and x3−l.
  1. Find the greatest common denominator of 6a2+11ax+3x2 and 6a2+7ax−3x2.
  1. Divide [x2−2xy+y2]/ab by [x−y]/bc and give the answer in its lowest terms.
  1. Change [2x2+5]/[x+3] to a mixed quantity.

* From 1919 to 2019, the national average inflation-adjusted annual spending per public school student in daily attendance rose from $883 to $16,774.[209] This does not include state administration spending, unfunded pension liabilities, and non-pension post-employment benefits for government workers.[210]

Higher Education Costs

Spending Per Student

* In the 2018–19 school year, public 4-year colleges spent an average of $47,892 per full-time-equivalent student. For other types of colleges, spending per student varied as follows:

Control of Institution[211]

4-Year Colleges

2-Year Colleges

Public

$47,892

$17,191

Private Nonprofit

$63,827

$19,994

Private For-Profit

$17,190

$16,685

[212]

* From 2000 to 2019, the average inflation-adjusted spending by private non-profit 4-year colleges per full-time-equivalent student rose by 31%. For other types of colleges, spending per student varied as follows:

Inflation-Adjusted Average Spending Per College Student

[213]


Spending By Function

* In the 2018–19 school year, private for-profit colleges spent an average of 28% of their finances on student instruction. For all types of colleges, their breakdown of spending on various functions varied as follows:

Function

Public

Private Nonprofit

Private For-Profit

Instruction[214]

28%

30%

28%

Research[215]

10%

10%

0%

Public service[216]

4%

1%

Academic support[217]

8%

9%

64%

Student services[218]

6%

8%

Institutional support[219]

9%

13%

Auxiliary enterprises[220]

9%

8%

2%

Hospitals[221]

14%

14%

0%

Other[222] [223]

13%

6%

6%

[224] [225]


Taxpayer Funding

* During 2019, federal, state and local governments spent $206 billion on higher education.[226] This doesn’t include additional government funding of university research, university hospitals, and student loans.[227] [228] [229] This $206 billion amounts to:

  • 43% of spending by public and private colleges on all functions but research and hospitals.
  • 80% of spending by public and private colleges on all functions that directly contribute to the education of students and the general public.[230] This:
    • includes instruction (like teaching salaries and classrooms), public services (like informational conferences), and academic support (like libraries and information technology).[231] [232]
    • doesn’t include student services (like recreation and cultural events), institutional support (like administration and advertising), auxiliary enterprises (like dorms and food), and other miscellaneous expenses.[233] [234]

* From 1959 to 2020, inflation-adjusted government spending on higher education rose from $3,659 per student per year to $11,016. This doesn’t include additional government funding for university research, university hospitals, and student loans:

Inflation-Adjusted Government Spending Per Higher Education Student

[235] [236] [237] [238]


Tuition, Fees, Room & Board

* Colleges and universities publish “rates” or “sticker prices” for their tuition, fees, room, and board. Individual students pay less than these sticker prices if they receive discounts, scholarships, or financial aid.[239]

* In the 2019–20 school year, the average sticker price for:

  • tuition and fees at public 2-year colleges was:
    • $3,377 for in-state students.
    • $8,126 for out-of-state students.
  • tuition, fees, room, and board at public 4-year colleges was:
    • $21,035 for in-state students.
    • $38,710 for out-of-state students.
  • tuition, fees, room, and board at private 4-year colleges was $45,932.[240]

* From 1964 to 1980, the average annual inflation-adjusted sticker price for tuition, fees, room, and board for all full-time undergraduate students fell by 12%. From 1980 to 2020, it rose by 172%:

Inflation-Adjusted College Tuition. Fees, Room, and Board

[241]

* Colleges that are subsidized by taxpayers and donors generally spend more money per student than their sticker prices. In the 2018–19 school year, the average amount spent by colleges for each full-time-equivalent student at:

  • 2-year public colleges was about:
    • 5.2 times greater than their average sticker price for in-state students.[242]
    • 2.2 times greater than their average sticker price for out-of-state students.[243]
  • 4-year public colleges was about:
    • 2.3 times greater than their average sticker price for in-state students.[244]
    • 1.3 times greater than their average sticker price for out-of-state students.[245]
  • 4-year private non-profit colleges was about 1.4 times greater than their average sticker price.[246]

Fraud

* For the 2012 tax year, 12.2 million tax filers (claiming 13.4 million students) received $19 billion in higher education tax credits.[247] Tax credits decrease the taxes that people must pay on a dollar-for-dollar basis, and some are refundable, which means that households with credits that exceed their income taxes receive the difference as cash payouts from the government. Per the IRS Inspector General, “the risk of fraud for these types of claims is significant.”[248] [249] [250] [251] [252]

* In 2015, the IRS Inspector General published an investigation of higher education tax credits for the 2012 tax year. The investigation found that 3.6 million tax filers (claiming 3.8 million students) received $5.6 billion in credits “that appear to be erroneous based on IRS records.” Some examples include:

  • 1.6 million filers (claiming 1.7 million students) who received $2.5 billion in credits, even though the educational institutions listed on their tax forms were not eligible for the credits.
  • filers claiming 419,827 students who received at least five years of credits, even though they are legally limited to four years of credits.
  • 2,148 tax filers who received $3.9 million in credits for people who were incarcerated for the entire year.[253]

Student Loans

Overview

* The federal government offers student loans that can be used to attend college, vocational schools, or trade schools.[254]

* There are different types of federal student loans, each with its own set of conditions and interest rates. Most of these loans generally require borrowers to pay back the money within 10 years of finishing college.[255]

* For people with good credit histories, the market rates on private student loans are sometimes lower than the rates on federal student loans.[256]


Current Status

* As of the fourth quarter of 2021:

  • Americans owed $1.6 trillion dollars in student loans, or more than any other type of consumer debt except for mortgages.[257] [258]
  • 92% of outstanding student loan balances were federal loans.[259]
  • 99% of student loans were not being repaid, mainly because the federal government suspended payments in the wake of the Covid-19 pandemic.[260] [261] [262]

* In the context of student loans:

  • “default” means that no payments have been made for more than 360 days.
  • “deferment” means that payments have been postponed for reasons such as “returning to school, military service, or economic hardship.”
  • “forbearance” means that payments have been temporarily suspended or reduced because of financial hardship, including when the federal government suspended student loan repayments in the wake of the Covid-19 pandemic.[263] [264] [265]

* In the first quarter of 2022, 1% of all federal student loans were actively being repaid. The other 99% fell into the following categories:

  • 69% in forbearance
  • 11% in default
  • 8% still in school
  • 8% in deferment
  • 2% in a grace period
  • 1% other[266] [267] [268] [269] [270]

Risks

* Per the U.S. Treasury, the federal government creates loan programs so that people who are “unable to afford credit at the market rate” or have a “high risk” of defaulting can borrow money at “an interest rate lower than the market rate.”[271]

* Per the U.S. Congressional Budget Office, “When the government extends credit, the associated market risk of those obligations is effectively passed along to citizens….”[272]

* Per a 2014 report by the U.S. Treasury Borrowing Advisory Committee:

A key concern is that students are taking on student loans because historically an education has been correlated with economic mobility; however, today an average of 40% of students at four-year institutions (and 68% of students in for-profit institutions) do not graduate within six years, which means they most likely do not benefit from the income upside from a higher degree yet have the burden of student debt.[273]

* Per Deborah J. Lucas, director of the MIT Center for Finance and Policy and former chief economist of the Congressional Budget Office:[274]

Government credit programs may have adverse consequences that must be weighed against their expected benefits. One concern is that credit subsidies will distort the allocation of capital in the economy and crowd out productive investments by households and firms.
A related concern is that credit subsidies tend to affect the price of goods and services so as to reduce the benefits to the intended beneficiaries. Consider the mortgage guarantees offered to first-time home buyers by the FHA [Federal Housing Authority]. The program increases the demand for housing, which in turn puts upward pressure on home prices. Such price increases benefit current homeowners at the expense of first-time home buyers, possibly offsetting the value of the mortgage subsidy. As another example, some observers point to the easy and low-cost access to federal student loans as fueling the steep rise in the cost of higher education in the last decade.
Easier access to credit markets is not always advantageous to program participants. Unsophisticated borrowers, such as some college students and first-time homebuyers, may not be fully aware of the costs and risks associated with accumulating high debt loans. Consumer protection and disclosure laws usually do not extend to the government, and there is the possibility that it will inadvertently offer poorly designed products that can harm consumers. …
A well-understood consequence of government credit provision is that it tends to create incentives for greater risk taking, particularly when a borrower becomes financially distressed. The reason is that a debtor with a guaranteed debt benefits from the upside if a gamble pays off, whereas the government shares in the losses if the gamble fails.[275]

History

* In 1965, the 89th U.S. Congress and Democratic President Lyndon B. Johnson created a program to finance student loans for higher education. These loans were issued by private lenders and guaranteed against default by the federal government.[276] [277] [278]

* In 1993, the 103rd U.S. Congress and Democratic President Bill Clinton created a program to finance student loans directly from the U.S. Treasury. The law required that increasing portions of all new federal student loans be made through this program.[279] The bill passed Congress with 85% of Democrats voting for it and 100% of Republicans voting against it.[280]

* In 2010, the 111th Congress and Democratic President Barack Obama passed a law requiring that all new federal student loans be financed directly from the U.S. Treasury.[281] [282] [283] The bill passed Congress with 88% of Democrats voting for it and 99% of Republicans voting against it.[284]

* As of fourth quarter of 2021, Americans have $1.6 trillion of outstanding student loan debt:

Inflation-Adjusted Total Student Loan Debt

[285] [286] [287]

* In 2012, the 90+ day delinquency rate for student loans exceeded that of credit cards for the first time since reliable data on this measure became available in 2003.[288] It remained the most common type of delinquent debt until early 2020 when the federal government passed a law that suspended student loan payments in the wake of the Covid-19 pandemic:[289] [290] [291]

Balance of Consumer Loans 90+ Days Delinquent

[292] [293] [294]

* Before the federal government suspended student loan payments in the wake of the Covid-19 pandemic,[295] 57% of all federal student loan balances were actively being repaid or less than 360 days delinquent. This figure has declined to 1%:

Portion of Federal Student Loans Actively Being Repaid

[296] [297]

* Before the federal government suspended student loan payments in the wake of the Covid-19 pandemic,[298] the 43% of loans that were not actively being repaid fell into the following categories:

  • 13% in default
  • 10% in forbearance
  • 9% still in school
  • 9% in deferment
  • 2% in a grace period

Forgiveness

* Since 1976, federal law has prohibited people from reneging on federal student loans by filing for bankruptcy (except in rare cases).[301] [302] [303] [304]

* In 2015, President Obama instructed his administration to “develop recommendations for regulatory and legislative changes for all student loan borrowers, including possible changes to the treatment of loans in bankruptcy proceedings….”[305]

* Federal laws authorize more than 50 federal student loan forgiveness and repayment programs. Such programs reduce or eliminate student loan debt for various reasons, such as having income below certain thresholds or being a government employee for one to ten years.[306]

* In 2015, the Obama administration issued regulations that limited student loan payments to 10% of borrowers’ monthly incomes and forgave:

  • undergraduate loans after 20 years of payments.
  • graduate program loans after 25 years.
  • government employee loans after 10 years.[307] [308]

* In 2021–22, the Biden administration issued regulations that:

  • made loan cancellation automatic for disabled individuals, regardless of income.[309]
  • will more than double the government employee loan forgiveness program.[310] [311]

* By law, the U.S. Department of Education can forgive federal student loans for borrowers who attended a school that “violated state law” through “misleading activities or other misconduct [that] directly relate to the loan or to the educational services for which the loan was provided.”[312] The Obama administration in 2015 and Biden administration in 2021 announced regulations to “streamline” these applications and expand the scope of loan forgiveness to include:

  • students whose schools closed down while they were in attendance.
  • people “who believe they were victims of fraud, regardless of whether their school closed.”
  • refunds of any student loan payments already made.
  • full loan forgiveness for people who previously received partial loan forgiveness.[313] [314] [315]

* With regard to this law:

  • In 2015, the Obama administration announced that it was forgiving the federal student loans of people who attended schools owned by Corinthian Colleges, Inc., a for-profit company that filed for bankruptcy under allegations of fraud.[316] [317]
  • In 2017, the Trump administration announced a plan to protect “taxpayers from being forced to shoulder massive costs that may be unjustified” by calling for “tiers of relief … based on damages incurred.”[318] [319] After court losses, the Trump administration withdrew its plan and implemented the original regulations in 2019.[320] [321] [322] [323]
  • In 2021–22, the Biden administration:
    • cancelled about $3 billion in student loans.[324] [325] [326]
    • cancelled loans averaging $40,000 per student of DeVry University because the school misrepresented its job placement rate.
    • continued issuing new loans to students of DeVry.[327] [328]

Accreditation

* To receive a federal student loan to attend a specific college, the college must be accredited. This means that it must be officially certified as an institution that delivers quality education.[329]

* The process of accreditation takes place at least once every 10 years and is generally conducted by private non-profit agencies. These agencies are sanctioned by the Department of Education, which is under the authority of the U.S. president.[330] [331]

* Accrediting agencies have the power to sanction colleges by denying, suspending, or revoking their accreditation. These agencies can also take interim actions, such as placing colleges on probation and requiring them to submit financial reports.[332]

* In January 2015, the U.S. Government Accountability Office published the results of an investigation of accrediting agencies and the Department of Education from October 2009 through March 2014. The study found that:

  • the accreditors responsible for accrediting for-profit colleges “were no more likely to issue terminations or probations to schools with weaker student outcomes compared to schools with stronger student outcomes….” This includes outcomes such as graduation rates, dropout rates, and student loan default rates.
  • “for 36 of the 93 schools receiving federal student aid funds that were placed on probation by their accreditors in fiscal year 2012, we found no indication of follow-up activities by [the Department of] Education between the beginning of fiscal year 2012 and December 2013.”
  • a Department of Education “official noted that her team would never respond to accreditor probations because they occur too frequently to track and would disrupt other work.”[333]

* Per the study’s conclusion:

These findings raise questions about whether existing accreditor standards are sufficient to ensure the quality of schools, whether [the Department of] Education is effectively determining if these standards ensure educational quality, and whether federal student aid funds are appropriately safeguarded.[334]

* Five months after the results of this investigation were published, the Obama administration issued a press release stating:

Over the past six years, the Education Department has taken unprecedented steps to hold career colleges accountable for giving students what they deserve: a high-quality, affordable education that prepares them for their careers.[335]

Federal Accounting

* When the federal government lends money for student loans, the government doesn’t report these amounts as outlays in the federal budget. Instead, the budget reflects only what the government projects it will lose or gain on these loans.[336] [337]

* Under federal budget rules, the federal government typically projects that it will make money on student loans. Thus, the more money the government loans, the better the budget appears to be.[338]

* Federal budget rules do not account for the market risk of issuing student loans. Market risk stems from the possibility that the economy will perform worse than the government projects, which would increase default rates and have other negative effects on returns from these loans.[339] [340]

* Per estimates made by the Congressional Budget Office:

  • in 2012, the federal government:
    • projected it would reap an average profit of 9% on the student loans it made from 2010 to 2020.
    • would have projected an average loss of 12% if it accounted for the market risk of those loans.[341]
  • in 2021, the federal government:
    • projected it will reap an average profit of 2% on the student loans that it makes in 2022.
    • would have projected an average loss of 14% if it accounted for the market risk of these loans.[342]

Higher Education Outcomes

General

* Institutes of higher learning are also known as colleges, universities, and post-secondary schools.[343] Such institutions award:

  • associate degrees for completing a program that typically requires 2–4 full-time school years.
  • baccalaureate (or bachelor’s) degrees for completing a program that typically requires 4–5 full-time school years.
  • master’s degrees, which typically require 1–2 full-time years of graduate school after obtaining a bachelor’s degree.[344]
  • doctoral academic (or Ph.D.) degrees, which typically require 5–10 years of full-time graduate school. The coursework for such degrees is largely geared toward people who intend to conduct research or become a professor, although it typically provides little instruction in how to teach.[345] [346] [347] [348]
  • doctoral professional degrees, which require at least two years of full-time college work before entering the program and then at least six full-time years in the program. The coursework for such degrees is largely geared toward people who intend to practice in fields such as medicine, dentistry, law, and theology.[349] [350] [351]

* As of the fall of 2020, roughly 19.4 million students were attending U.S. colleges. Among these students:

  • 59% are females, and 41% are males.
  • 73% are at 4-year colleges and 26% are at 2-year colleges.
  • 61% are attending full time, and 39% are attending part time.[352]

* From 1960 to 2020, the portion of recent high school graduates (aged 16–24) enrolled in college:

  • increased from 45% to 63%.
  • increased from 54% to 59% for males.
  • increased from 38% to 66% for females.
Portion of High School Graduates Aged 16–24 Enrolled in College

[353]

* Among recent high school graduates of different racial/ethnic groups, the rates of college enrollment in 2020 were:

  • 83% for Asians.
  • 65% for whites.
  • 58% for African Americans.
  • 56% for Hispanics.[354]

Graduation Rates

* Among full-time, new college students who entered a 2-year college in 2017, 34% graduated from it within 150% of the normal time required to do so (typically three years). This was true for:

  • 62% of students at for-profit colleges.
  • 52% of students at nonprofit colleges.
  • 29% of students at public colleges.
  • 35% of female students.
  • 32% of male students.
  • 42% of Asian students.
  • 36% of white students.
  • 32% of Hispanic students.
  • 30% of American Indian students.
  • 28% of mixed-race students.
  • 25% of black students.[355]

* Among full-time, new college students who entered a 4-year college in 2014, 47% graduated from the same institution within four years.[356]

* Among full-time, new college students who entered a 4-year college in 2013, 63% graduated from it within six years. This was true for:

  • 68% of students at nonprofit institutions.
  • 62% of students at public institutions.
  • 26% of students at for-profit institutions.
  • 66% of female students.
  • 60% of male students.
  • 76% of Asian students.
  • 67% of white students.
  • 60% of mixed-race students.
  • 58% of Hispanic students.
  • 44% of black students.
  • 41% of American Indian students.[357]

Earnings

* In 2020, people aged 25–64:

  • with some college but did not graduate reported an average of $30,752 in cash earnings.
  • with an associate’s degree and no further education reported an average of $35,403 in cash earnings.
  • with a bachelor’s degree and no further education reported an average of $56,447 in cash earnings.
  • with a master’s degree and no further education reported an average of $68,715 in cash earnings.
  • with a doctoral degree reported an average of $104,172 in cash earnings.
  • with a professional degree reported an average of $112,026 in cash earnings.[358] [359]

* Click here for more data on education and earnings.


Effort & Grades

* From 1961 to 2003, the average time spent by full-time college students on educational activities like attending class and studying dropped from roughly 40 hours per week to 27 hours per week.[360]

* During the 2005–06 and 2006–07 school years, full-time students at 4-year colleges spent an average of about:

• 27–28 hours per week or 16–17% of their time on educational activities.

• 43 hours per week or 26% of their time on leisure activities and sports.[361]

* In 1960, roughly 15% of college course grades were A’s. By 1988, approximately 31% of grades were A’s. By 2013, about 45% of grades were A’s.[362] [363]


Practical Skills

* The Collegiate Learning Assessment (CLA) is a test designed to measure the “core outcomes” of higher education, including “critical thinking, analytical reasoning, problem solving, and writing.”[364] This assessment evaluates how well college students perform “real-world tasks that are holistic and drawn from life situations.”[365] [366]

* In 2014, Professor Richard Arum of New York University and Assistant Professor Josipa Roksa of the University of Virginia published a study using the CLA to measure the “critical thinking, complex reasoning, and writing skills” of 1,666 full-time students who entered 4-year colleges in the fall of 2005 and graduated in the spring of 2009. The authors found that:

  • if the test “were rescaled to a one-hundred-point scale, approximately one-third of students would not improve more than one point over four years of college.”
  • “after four years of college, an average-scoring student in the fall of his or her freshman year would score at a level only eighteen percentile points higher in the spring of his or her senior year. Stated differently, freshmen who entered higher education at the 50th percentile would reach a level equivalent to the 68th percentile of the incoming freshman class by the end of their senior year.”
  • “students attending high-selectivity institutions improve on the CLA substantially more than those attending low-selectivity institutions, even when models are adjusted for students’ background and academic characteristics. … While students in more selective institutions gain more on the CLA, their gains are still modest….”[367] [368]

* Using test questions from the National Center for Education Statistics’ adult test of practical literacy, the American Institutes for Research assessed the literacy skills of 1,827 graduating college students in 2003. These students were randomly selected from across the U.S., and each was graded as Proficient, Intermediate, Basic, or Below Basic on three different types of literacy:[369]

1) Prose Literacy, which is the ability to “search, comprehend, and use information from continuous texts,” such as “editorials, news stories, brochures, and instructional materials.” Students who were proficient in this included:

  • 38% of males and 37% of females at 4-year colleges.
  • 24% of males and 22% of females at 2-year colleges.
  • 42% of whites, 29% of Hispanics, 23% of Asians/Pacific Islanders, and 16% of blacks at 4-year colleges.
  • 27% of whites, 22% of Hispanics, 11% of blacks, and 7% of Asians/Pacific Islanders at 2-year colleges.[370]

2) Document Literacy, which is the ability to “search, comprehend, and use information from noncontinuous texts,” such as “job applications, payroll forms, transportation schedules, maps, tables, and drug or food labels.” Students who were proficient in this included:

  • 43% of males and 38% of females at 4-year colleges.
  • 24% of males and 24% of females at 2-year colleges.
  • 45% of whites, 35% of Hispanics, 20% of Asians/Pacific Islanders, and 17% of blacks at 4-year colleges.
  • 28% of whites, 18% of Asians/Pacific Islanders, 15% of Hispanics, and 10% of blacks at 2-year colleges.[371]

3) Quantitative Literacy, which is the ability to “identify and perform computations … using numbers embedded in printed materials,” such as “balancing a checkbook, figuring out a tip, completing an order form, or determining the amount of interest on a loan from an advertisement.” Students who were proficient in this included:

  • 39% of males and 30% of females at 4-year colleges.
  • 20% of males and 16% of females at 2-year colleges.
  • 40% of whites, 20% of Asians/Pacific Islanders, 19% of Hispanics, and 5% of blacks at 4-year colleges.
  • 24% of whites, 14% of Hispanics, 7% of blacks, and 3% of Asians/Pacific Islanders at 2-year colleges.[372]

* The study also found:

  • “The literacy of students in 4-year public institutions was comparable to the literacy of students in 4-year private institutions.”
  • “Prose literacy was higher for students in selective 4-year colleges, though differences between selective and nonselective 4-year colleges for document and quantitative literacy could not be determined because of the sample size.”
  • “College students come from a variety of economic backgrounds, with some students supporting themselves and others relying on their families to pay for tuition and other necessities. Despite variations in income, most differences in the literacy of students across income groups were not significant.”[373]
College Student Literacy Scores and Family Income

[374]


* A 2013 Gallup poll of 623 business leaders found that over two-thirds do not think U.S. college graduates have the necessary “skills and competencies” for their particular business.[375]

* In 2020, the Association of American Colleges and Universities commissioned a poll of employers who hire people with bachelor’s degrees to assess their views of recent college graduates. The poll included 496 employers, had a margin of sampling error of plus or minus 5 percentage points, and found the following results:

  • About 49% employers are “very satisfied” with graduates’ “ability to apply the skills and knowledge learned in college to complex problems in the workplace.”
  • A majority of employers find 14 skills “very important,” and the portions of employers who think recent graduates are “very well prepared” in these skills are:
    • 49% for digital literacy.
    • 48% for teamwork.
    • 46% for creative thinking.
    • 44% for writing.
    • 44% for quantitative reasoning.
    • 43% for intercultural skills.
    • 42% for decision making.
    • 41% for data analysis.
    • 41% for ethical judgement.
    • 41% for verbal communication.
    • 39% for complex problem-solving.
    • 39% for critical thinking.
    • 39% for practical application of knowledge.
    • 39% for integrating ideas across settings.[376] [377]

Comparative Earnings

* In 2020, U.S. residents aged 25 to 64 reported average cash earnings of $50,251.[378] Cash earnings do not include non-cash compensation, such as employee fringe benefits.[379] For varying levels of education, average reported cash earnings were as follows:

Average Cash Earnings of People 25–64

[380] [381]

* In 2020, 79% of U.S. residents aged 25–64 reported at least some cash earnings and 21% did not report any cash earnings. For varying levels of education, the rates were as follows:

Portion of People Aged 25–64 with Cash Earnings

[382] [383]

* Among U.S. residents aged 25–64 who reported cash earnings in 2020, average cash earnings were $63,553. Among these same people, median cash earnings were $47,754.[384] For varying levels of education, median cash earnings were as follows:

Median Cash Earnings of People Aged 25–64 With Earnings

[385] [386]

Preschool Spending

Overview

* During 2021 amid the Covid-19 pandemic,[387] private consumers and nonprofit organizations in the U.S. spent $17.4 billion on day care and preschools/nursery schools.[388] [389] [390] [391] [392]

* During 2015, the federal government funded 47 programs that provided or subsidized education and/or childcare for children under the age of five.[393]

* The largest federal education/childcare program for preschoolers is called “Head Start.”[394] [395] During 2021 amid the Covid-19 pandemic,[396] Head Start served 744,898 children and 11,767 pregnant women at some point during the year.[397]

* In 2021, the federal government spent an average of $12,449 for each person enrolled in Head Start. This does not include additional funds from state governments.[398] [399]


Fraud

* Federal law requires that at least 90% of Head Start enrollees have incomes below 130% of the federal poverty line. To determine if the law was being enforced, the U.S. Government Accountability Office (GAO) conducted 15 undercover tests of Head Start centers in six states from 2008 to 2010. The investigation found the following:

  • “In 8 instances staff at these centers fraudulently misrepresented information, including disregarding part of the families’ income to register over-income children into under-income slots.”
  • “At no point during our registrations was information submitted by GAO’s fictitious parents verified, leaving the program at risk that dishonest persons could falsify earnings statements and other documents in order to qualify.”
  • One Head Start staffer “explained that families often lie about being separated or divorced in order to reduce their income and that Head Start is not strict about checking whether that is true.”
  • The “lack of documentation made it virtually impossible to determine whether only under-income children were enrolled in spots reserved for under-income children.”[400]

* From 2017 to 2019, GAO reviewed the Head Start program to determine if eligibility and enrollment problems persisted. Of the 15 centers covertly tested:

  • seven correctly identified ineligible families.
  • three accepted applicants without verifying eligibility documentation.
  • three fabricated income information on applications.
  • two omitted documents that made the applicant ineligible.[401]

Preschool Outcomes

General

* During 2018, 31% of all 3-to-4 year-olds in the U.S. were enrolled in government-controlled education programs. In 1970, this figure was 9%.[402]

* During 2018, 23% of all 3-to-4 year-olds in the U.S. were enrolled in private education programs. In 1970, this figure was 12%.[403]

* In 2013, President Obama called on Congress to fund certain initiatives that would allow every child in the U.S. from birth to age five to have access to government-controlled early learning programs. Specifically, he called for funding to:

  • provide “new, full-day” Early Head Start programs for children from birth to age three.
  • allow all four-year-olds from families with incomes at or below 200% of the poverty line to be enrolled in government preschools.[404]

* In May 2015, U.S. Senator Patty Murray (D-WA) introduced a bill that would enact much of President Obama’s early learning agenda. At the end of President Obama’s term in January 2017:

  • the bill had 24 cosponsors, including 23 Democrats and a self-described “democratic socialist” who caucuses with the Democrats.
  • the Senate, which had a Republican majority, had not taken any action on this bill.[405] [406] [407] [408] [409] [410]

* In 2021, President Biden proposed a social spending plan that called for:

  • subsidizing child care costs for most families with young children, including “nearly all families of four making up to $300,000 per year.”
  • taxpayer-funded preschool for all three- and four-year-olds in both government-run and private schools.[411] [412]

* In September 2021, U.S. Representative John Yarmuth (D-KY) introduced a bill that would enact much of President Biden’s childcare and preschool agenda.[413] As of February 2022:

  • the bill passed the House of Representatives with 220 of 221 Democrats voting for it and 212 of 213 Republicans voting against it.[414]
  • the Democrat-controlled Senate had not taken any action on this bill.[415] [416]

Head Start

* The largest federal education/childcare program for preschoolers is Head Start, which “provides comprehensive educational, social, health, and nutritional services to low-income preschool children and their families.”[417] [418] [419] [420] [421]

* Head Start operates mostly during the school year and has full-day and part-day programs. When Head Start programs are in session, the average participant attends about 24 to 28 hours per week.[422] [423]

* From 2002 through 2008, the U.S. Department of Health & Human Services conducted a nationally representative study of 3- and 4-year-old children whose parents had applied for enrollment in Head Start and were found to be eligible. The study included 4,667 children from high-poverty communities. The design and results were as follows:

  • The children were randomly assigned to groups that were either enrolled in Head Start or not enrolled in Head Start due to a lack of available slots.
  • Among the children not enrolled in Head Start, about 60% were placed by their parents in other types of preschool programs.
  • The researchers measured 41 outcomes relating to the children’s educational performance, physical health, emotional development, and parental interactions up through third grade.
  • The researchers found that “there were initial positive impacts from having access to Head Start, but by the end of 3rd grade there were very few impacts,” and among these, some were positive and some were negative with no “clear pattern” in either direction.[424]

High/Scope Perry Program

* From 1962 to 1967, a Ph.D. public school administrator named David Weikart led a study of 123 preschool-aged children in a town near Detroit named Ypsilanti, Michigan. This famous study is known as the “High/Scope Perry Preschool” study, because HighScope is the name of the research firm that Weikart later founded, and the study was conducted on children who lived near the Perry Elementary School in Ypsilanti.[425] [426] [427] [428]

* The study’s design was as follows:

  • To be included in the study, children had to be 3–4 years old, African American, impoverished, and have an IQ ranging from 70 to 85 (as compared to the national average of 111 at the time).[429] [430]
  • The children were randomly assigned to groups that were either enrolled in the preschool program or not enrolled.[431] [432]
  • The preschool curriculum was “centered around play that is based on problem-solving and guided by open-ended questions” like “What happened? How did you make that? Can you show me? Can you help another child? [433]
  • Most of the children who attended the program did so for two years but some for only one year.[434] [435]
  • The children in the program attended preschool for 2.5 hours per weekday from mid-October through May. A teacher also visited each student once per week at his or her home for 1.5 hours. Per child, this is a total of 14 hours per week, 462 hours per year, or 924 total hours for those who attended two full years.[436]
  • The child/teacher ratio ranged from 5:1 to 6:1.[437]
  • The preschool program cost about $25,000 per student in inflation-adjusted 2022 dollars.[438] [439] Adjusted for the cost growth of public schooling since 1965, the program cost about $69,201 per student.[440]
  • When the study participants were ages 4–10, 12, 14, 17–19, 27, and 40, researchers measured “numerous factors” relating their careers, finances, criminal history, education, intellect, and personality.[441] [442] [443]
  • The sample groups that were evaluated consisted of roughly 25 males and 25 females who were in the program and 25 males and 25 females who were not.[444] [445]

* The authors of a 2008 paper in the Journal of the American Statistical Association examined the outcomes of the four Perry sample groups and found the following statistically significant outcomes at different ages.

  • At age 5, the average IQs of males and females in the program were respectively 11 and 13 points higher than those not in the program.
  • At age 18, females in the program had an 84% graduation rate, as opposed to 35% for those not in the program.
  • At age 19, 5% of the females in the program had been arrested, as opposed to 42% of those not in the program.
  • At age 19, 40% of the females in the program were unemployed, as opposed to 71% of those not in the program.
  • At age 27, females in the program had been arrested an average of 0.32 times, as opposed to 2.3 times for those not in the program.
  • At age 27, 40% of the females in the program were married, as opposed to 8% of those not in the program.[446]

* The authors of the study also found:

  • “In contrast to females, males appear to not derive lasting benefits” from the Perry program.
  • Studies of two other preschool programs with children from similar backgrounds have replicated the early IQ and female graduation rate outcomes of the Perry program.
  • Previous studies that found other benefits from the Perry program have “serious statistical” problems, because the “samples are very small,” and the researchers failed to account for a common issue with studies that measure numerous outcomes: seemingly significant results “emerge simply by chance, even if there are no” actual effects.[447] [448]
  • Studies of another preschool program with children from similar backgrounds who spent 10 times as many hours in preschool have not replicated the large reductions in criminality that statistically flawed studies of the Perry program have found.[449] [450] [451]

* Using “novel statistical approaches” to account for “small sample sizes” and a “corrupted randomization” process in the original study, researchers at the University of Chicago found several other statistically significant outcomes between the four Perry sample groups at different ages. For example:

  • At age 27, 80% of the females in the program were employed, as opposed to 55% of those not in the program.
  • At age 40, females in the program had been arrested an average of 2.2 times, as opposed to 4.8 times for those not in the program.
  • At age 19, 70% of the males in the program were employed, as opposed to 50% of those not in the program.
  • At age 27, males in the program earned an average of $2,310 per month, as opposed to $1,430 for those not in the program.
  • At age 40, males in the program had been arrested an average of 8.2 times, as opposed to 12.4 times for those not in the program.[452] [453]

* Given the sample sizes of the four Perry groups (roughly 25 each), the approximate margin of error with 95% confidence for any outcome is ± 20 percentage points.[454] [455] Per an academic textbook on statistical analysis by University of Pennsylvania professor Paul D. Allison:

There’s very little information in a small sample, so estimates of correlations are very unreliable. … Almost anyone would consider a sample less than 60 to be small, and virtually everyone would agree that a sample of 1,000 or more is large.[456]

* Policymakers and activists have pointed to the Perry program as a reason to enact universal government preschool.[457] [458] [459] [460] [461] [462] Per an academic book on applied statistics by Harvard Ph.D. and social physiologist Rebecca M. Warner:

  • “Researchers in the behavioral and social sciences almost always want to make inferences beyond their samples,” but this is “always risky.”
  • It is “questionable to generalize” the results of a study to populations who are “drastically different” from the subjects of a study.[463] [464]

* The subjects of the Perry study (black, impoverished, IQ of 70–85) represented 2% of the U.S. population and 16% of the African American population at the time the study was conducted.[465] [466]


Abecedarian Project

* From 1972 to 1977, researchers at the University of North Carolina led a study of 111 preschool-aged children in the area of Chapel Hill, NC. This study is known as the “Abecedarian Project,” because that was the name of the main curriculum used in the program.[467] [468] [469]

* The study’s design was as follows:

  • Children included in the study “were believed to be at risk of retarded intellectual and social development.” Most were African Americans whose mothers had about 10 years of education and an IQ of 85. Roughly 75% of the children were from single-parent households, and 55% of the households were receiving cash welfare.[470]
  • The children were randomly assigned to groups that were either enrolled in the preschool program or not enrolled.[471] [472]
  • The preschool curriculum was focused on “developing cognitive, language, and social skills.”[473] [474]
  • The children in the program attended from shortly after birth (at an average age of 4.4 months) until they began kindergarten.[475]
  • The children in the program attended preschool for 8–10 hours per weekday and 50 weeks per year. Per child, this is 40–50 hours per week, 2,000–2,500 hours per year, and a total 8,000–10,000 hours for those who attended for four years. This is roughly 10 times more hours than the Perry program.[476] [477]
  • The child/teacher ratio ranged from 3:1 to 6:1.[478]
  • Based on the child/teacher ratio, the total classroom time, and the cost growth of public schooling since the 1970s, the Abecedarian program would cost about $269,000 per student to implement today.[479]
  • When the study participants were ages 2–8, 12, 15, 18, 19, and 21, researchers measured numerous factors relating their careers, criminal history, education, intellect, and personality.[480]
  • The sample groups who were evaluated consisted of roughly 25 males and 25 females who were in the program and 25 males and 25 females who were not.[481] [482]

* The authors of a 2008 paper in the Journal of the American Statistical Association examined the outcomes of the four Abecedarian sample groups and found the following statistically significant outcomes at different ages:

  • At age 12, the average IQ of females in the program was 8 points higher than those not in the program.
  • At age 21, 40% of the females in the program were in college, as opposed to 11% of those not in the program.
  • At age 21, 4% of the females in the program were marijuana users, as opposed to 36% of those not in the program.[483]

* The authors of the study also found:

  • Previous studies that found other benefits from the Abecedarian program have “serious statistical” problems, because the “samples are very small,” and the researchers failed to account for a common issue with studies that measure numerous outcomes: seemingly significant results “emerge simply by chance, even if there are no” actual effects.[484] [485]
  • The Abecedarian subjects did not show significant reductions in criminality like previous studies of the Perry program had found, even though the Abecedarian children spent 10 times as many hours in preschool.[486] [487] [488] [489]

* Policymakers and activists have cited the Abecedarian Project as a reason to enact universal government preschool.[490] [491]

School Choice

Overview

* Laws in all 50 U.S. states generally compel people to:

  • pay taxes that fund government-run K–12 schools.[492] [493] [494]
  • send their children to specific public schools based on physical boundaries around their homes unless they:
    • pay additional money for private school.
    • spend additional money and/or time for homeschooling.[495] [496]

* School choice initiatives allow parents to select the schools their children attend, with part or all of the costs paid by their taxes or other government revenues. This can include:

  • public schools outside a child’s neighborhood or school district.
  • charter and magnet schools.[497] [498] [499] [500]
  • private schools.
  • tutors and homeschools.[501]

* In the U.S., government revenues regularly fund the education of students who attend private colleges and universities but rarely students who attend private K–12 schools.[502] [503] [504]

* In other economically advanced nations—like Austria, Canada, Spain, France, Hungary, Australia, New Zealand, and the Netherlands—government revenues commonly fund the education of students who attend private K–12 schools and sometimes those who are homeschooled.[505]

* In different nations, governments exercise varying amounts of centralized control over public and private schools. Public schools in some countries have more autonomy than private schools in others.[506]

* Per the academic serial work Handbook of Research on School Choice:

Much of the debate over school choice is based on the premise that there is a public monopoly over the provision of schooling and that schools are inefficient, in part, because of the absence of competition. If families could be treated as consumers and had the right to freely choose which kind of education they would prefer for their children, choice advocates assert that both government and non-government schools would improve….[507] [508] [509]

Costs

* In the 2018–19 school year, governments in the U.S. spent an average of $15,621 for every student enrolled in K–12 public schools.[510] [511] This excludes state administration spending, unfunded pension liabilities, and non-pension post-employment benefits.[512]

* In the 2017–18 school year, the average spending per student enrolled in private K–12 schools was about $8,499.[513] [514] [515] [516] [517] [518]

* Per the academic textbook Antitrust Law:

Monopoly pricing confronts the consumer with false alternatives: the product that he chooses because it seems cheaper actually requires more of society’s scarce resources to produce. Under monopoly, consumer demands are satisfied at a higher cost than necessary.[519] [520] [521] [522]

* Per the U.S. Supreme Court’s unanimous decision in Abood v. Detroit Board of Education:

A public employer, unlike his private counterpart, is not guided by the profit motive and constrained by the normal operation of the market.
Although a public employer, like a private one, will wish to keep costs down, he lacks an important discipline against agreeing to increases in labor costs that in a market system would require price increases.[523]

* Governments are subject to certain types of competition, because people and businesses sometimes migrate to locations where governments provide better value for their tax dollars, and because voters sometimes remove politicians for reasons such as increasing taxes and government spending.[524] [525]


Effects on Students

NOTE: In order to curb the methodological trickery that besets public policy debates, Just Facts has developed Standards of Credibility that call for the presentation of “data in its rawest comprehensible form.” However, the results of all experimental studies on the academic outcomes of students who experience school choice are more processed than Just Facts would prefer. Thus, instead of ignoring them or attempting to analyze all of the raw data, Just Facts has briefly summarized all of these studies and documented their results in the footnotes below.

* At least 23 experimental (or quasi-experimental) studies have been conducted on the academic outcomes of students who experience school choice.[526] [527] Among them:

* In a 2014 interview, Bill O’Reilly asked Barack Obama, “Why do you oppose school vouchers when it would give poor people a chance to go to better schools?” Obama replied:

Actually—every study that’s been done on school vouchers, Bill, says that it has very limited impact if any.
I’ve taken a look at it. As a general proposition, vouchers has not significantly improved the performance of kids that are in these poorest communities.[548]

* A 2010 experimental study of a school voucher initiative in the District of Columbia published by the Obama administration’s Department of Education found the following statistically significant results:

  • Students who applied for a voucher and did not win a lottery to receive one had a graduation rate of 70%.
  • Students who applied for a voucher and won a lottery to receive one had a graduation rate of 82%.
  • Students who applied for a voucher, won a lottery to receive one, and then used it had a graduation rate of 91%.[549] [550]

* Per a 2004 report by the Civil Rights Project at Harvard University, the Urban Institute, Advocates for Children of New York, and the Civil Society Institute:

In an increasingly competitive global economy, the consequences of dropping out of high school are devastating to individuals, communities and our national economy. At an absolute minimum, adults need a high school diploma if they are to have any reasonable opportunities to earn a living wage. A community where many parents are dropouts is unlikely to have stable families or social structures.[551] [552] [553]

* The 2012 Democratic Party Platform states:

Too many students, particularly students of color and disadvantaged students, drop out of our schools, and Democrats know we must address the dropout crisis with the urgency it deserves.[554]

* In 2013, the Journal of Policy Analysis and Management published an experimental study of the same District of Columbia voucher initiative by the same lead author. The study found the following statistically significant results:

  • “The impact of using a [voucher] scholarship was an increase of 21 percentage points in the likelihood of graduating. The positive impact of the program on this important student outcome was highly statistically significant.”
  • “Our analysis indicated a marginally statistically significant positive overall impact of the program on reading achievement after at least four years.”
  • “We did find evidence to suggest that scholarship use boosted student reading scores by the equivalent of about one month of additional learning per year.”[555]

* In 2011, the Quarterly Journal of Economics published an experimental study of a public school choice initiative in the 20th largest school district in the nation (Charlotte-Mecklenburg, North Carolina). The study compared the adult crime outcomes of male students who won and did not win a lottery for their parents’ first choice of school. The author found the following statistically significant results:

  • “Across various schools and for both middle and high school students, I find consistent evidence that winning the lottery reduces adult crime.”
  • “The effect is concentrated among African American males and youth who are at highest risk for criminal involvement.”
  • “Across several different outcome measures and scalings of crime by severity, high-risk youth who win the lottery commit about 50% less crime.”
  • “They are also more likely to remain enrolled and ‘on track’ in school, and they show modest improvements on school-based behavioral outcomes such as absences and suspensions.”[556] [557]

* Per a 2006 book about school choice written by Harvard professors William G. Howell and Paul E. Peterson:

No publicly funded voucher program offers all students within a political jurisdiction the opportunity to attend the private school of their choice. All are limited in size and scope, providing vouchers only to students who come from low-income families, who attend “failing” public schools, or who lack a public school in their community.
Most publicly funded voucher programs today are so small that they do little to enrich the existing educational market.
Most privately funded voucher programs operating today promise financial support for only three to four years.
In the short term, vouchers may yield some educational benefits to the low-income families that use them. But sweeping, systemic change will not materialize as long as small numbers of vouchers, worth small amounts of money, are offered to families for short periods of time. The claims of vouchers’ strongest advocates as well as those of the most ardent opponents, both of whom forecast all kinds of transformations, will be put to the test only if and when the politics of voucher programs stabilizes, support grows, and increasing numbers of educational entrepreneurs open new private schools.[558]

Effects on Government Schools

* The primary measure of school resources is spending per student.[559] [560] [561]

* School choice initiatives that allow students to attend private schools typically increase the funding per student in public schools, because public schools do not have to educate students who leave and because private schools typically spend less per student than public schools.[562] [563]

* Certain school costs are fixed in the short term (like buildings), and thus, the cost savings of educating fewer students occurs in steps instead of linearly. This means that private school choice programs can temporarily decrease the funding per student in public schools.[564]

* In 2022, the journal Education Next published a study of a Florida school choice initiative that awards scholarships for low-income students to use towards private school tuition and transportation. It measured how “increased competition” from the program’s expansion since 2002 affected educational and behavioral outcomes of students who remained in public schools. The study found that increased program enrollment and competition:

  • “are associated with positive behavioral outcomes among non-scholarship students,” including fewer suspensions and lower absenteeism.
  • produced larger improvements in reading and math test scores than schools with less market competition, especially among poorer students.
  • benefited 90% of students and created no educational losses for the other 10%.[565]

* In 2013, the Journal of School Choice: International Research and Reform published a systematic review of 21 “high-quality” studies about the academic outcomes of U.S. students who remain in public schools after other students leave through choice programs. This review was designed to measure the effects of competition on public schools whose enrollments are threatened by private school choice programs. The author found:

  • “All but one of these 21 studies found neutral/positive or positive results” on public school students.
  • None of the studies found negative results on public school students.
  • The quasi-experimental studies, which are studies that are best able to determine causal effects, “unanimously find positive impacts on student academic achievement.”
  • “The only study to find no effects across all subjects … was restricted to a relatively small number of participants in the year this study was conducted. Furthermore, a ‘hold-harmless’ provision ensured that public schools were insulated from the financial loss from any students that transferred into private schools with a voucher. The absence of a positive competition effect is thus unsurprising, given these design features.”[566]

* In 2004, the journal Education Next published an experimental study of a Florida school choice initiative that offered private and public school vouchers to students enrolled in chronically failing public schools. The study compared the academic gains of public school students whose schools were eligible for vouchers and public school students whose schools were not eligible for vouchers. The study found the following statistically significant results:

  • On the Florida Comprehensive Assessment Test, “gains in test scores were 15 points higher among those schools whose students were eligible for vouchers than the gains among the rest of Florida’s public schools. Schools whose students were on the verge of becoming eligible also made greater gains.”
  • “The same pattern—of greater gains among schools facing competition or the threat thereof—was witnessed on the national Stanford-9 exam, confirming that the gains reflect genuine improvements in learning rather than teaching to the test or cheating.”
  • After one year, “the gains among [chronically failing] schools whose students were eligible for vouchers were enough to erase almost one-fifth of the [achievement] gap between their average score in the 2001–02 school year and the average score of all other Florida public schools.”[567]

Politics

* According to donations reported to the Federal Election Commission, the following education groups were among the top 100 organizations that gave the most money to federal candidates, parties, political action committees, and related organizations during the 1990–2020 election cycles:

Group

Rank in the Top 100

Total Contributions

Portion to Democrats & Liberal Groups

American Federation of Teachers (AFT)

17

$109,841,040

100%

National Education Association (NEA)

20

$87,146,756

95%

[568] [569] [570]

* The NEA and AFT are labor unions.[571] For facts about the accuracy of union donations reported to the Federal Election Commission, visit Just Facts’ research on labor unions.

* In 2009, the president of the NEA sent an open letter to Democrats in the U.S. House and Senate stating that “opposition to [private school] vouchers is a top priority for NEA.”[572]

* The 2020 Democratic Party Platform opposes private school vouchers and supports a ban on federal funding of for-profit charter schools.[573]

* The Republicans didn’t adopt a platform in 2020.[574] The 2016 Republican Party Platform supports “options for learning, including home-schooling, career and technical education, private or parochial schools, magnet schools, charter schools, online learning, and early-college high schools,” as well as “education savings accounts (ESAs), vouchers, and tuition tax credits.”[575]
 

* The President of the United States appoints justices to the U.S. Supreme Court. These appointments must be approved by a majority of the Senate.[576]

* Once seated, federal judges serve for life unless they voluntarily resign or are removed through impeachment, which requires a majority vote of the House of Representatives and two-thirds of the Senate.[577]

* Senate rules previously allowed for a “filibuster,” in which a vote to approve a judge or Supreme Court justice could be blocked unless a super-majority of the senators (typically 60 out of 100) agreed to let it take place.[578] [579] [580] These rules were repealed:

  • in 2013 when the Democrat majority voted to eliminate filibusters of all presidential nominees except Supreme Court justices.[581]
  • in 2017 when the Republican majority voted to eliminate filibusters of Supreme Court justices.[582]

* Once seated, federal judges serve for life unless they voluntarily resign or are removed through impeachment, which requires a majority vote of the House of Representatives and a two-thirds majority vote in the Senate.[583]

* In 2002, the U.S. Supreme Court ruled (5 to 4) that a school choice initiative in Cleveland was constitutional (details below). Five of the seven justices appointed by Republicans ruled that it was constitutional, and both of the justices appointed by Democrats ruled that it was not.[584]


Positions & Actions

* A nationally representative poll of U.S. adults commissioned in 2015 by Education Next and the Kennedy School of Government at Harvard University found that the following portions of Americans:

  • are opposed to giving “all families with children in public schools a wider choice, by allowing them to enroll their children in private schools instead, with government helping to pay the tuition”:
    • 57% of teachers
    • 43% of whites
    • 36% of the general public
    • 30% of parents
    • 18% of African Americans
    • 13% of Hispanics
  • have ever enrolled their own children in private K–12 schools:
    • 22% of teachers
    • 18% of whites
    • 14% of the general public
    • 14% of parents
    • 14% of African Americans
    • 8% of Hispanics[585] [586]

* An analysis of U.S. Census data from the year 2000 by the Thomas B. Fordham Institute (a proponent of school choice) found that the following portions of parents were sending at least one of their own children to a private K–12 school:

  • 12.2% of all households with children
  • 17.5% of urban households with children
  • 21.5% of urban public school teacher households with children[587] [588]

* The following opponents of private school choice personally attended and/or sent their own children to private K–12 schools:

* The American Civil Liberties Union (ACLU) opposes taxpayer-funded private school choice programs. One of the ACLU’s arguments for this stance is that:

School voucher schemes would force all taxpayers to support religious beliefs and practices with which they may strongly disagree.[617]

* The ACLU supports taxpayer-funded abortions. With regard to whether all taxpayers should be forced to support practices with which they may strongly disagree, the ACLU asks the following rhetorical question:

What about those who are morally or religiously opposed to abortion?

And answers:

Our tax dollars fund many programs that individual people oppose.[618]

Affluence & Connections

* Per the academic serial work Handbook of Research on School Choice:

It may be misleading … to distinguish traditional public schools as “unchosen.” Some parents choose to live near excellent public schools and thereby choose their children’s schools by residential location.[619] [620]

* Per the academic reference book 21st Century Geography, “economically depressed populations with limited access to resources … have restricted choices on where they can live….”[621]

* In 2013, homes in top-ranked school districts cost an average of $50 more per square foot than homes in average-ranked school districts.[622]

* In 2009, Barack Obama’s Secretary of Education, Arne Duncan, was asked, “Where does your daughter go to school, and how important was the school district in your decision about where to live?” Duncan replied:

She goes to Arlington public schools. That was why we chose where we live, it was the determining factor. That was the most important thing to me. … I didn’t want to try to save the country’s children and our educational system and jeopardize my own children’s education.[623]

* In 2009, families living in Arlington, Virginia reported an inflation-adjusted median cash income of $181,813, the highest among all counties in the United States.[624] [625]

* When Arne Duncan was the chief executive of the Chicago public school system, his office contacted school principals to help the children of politically connected parents get into better public schools. Per a 2010 Chicago Tribune article:

Whispers have long swirled that some children get spots in the city’s premier schools based on whom their parents know. But a list maintained over several years in Duncan’s office and obtained by the Tribune lends further evidence to those charges.
The log is a compilation of politicians and influential business people who interceded on behalf of children during Duncan’s tenure.
After getting a request … [Duncan’s staffers] would look up the child’s academic record. If the student met their standard, they would call the principal of the desired school.
[A Duncan staffer] said the calls from his office were not directives to the principals—no one was ever told they had to accept a student. Often, students did not get any of their top choices but were placed in larger, less competitive, but still desirable schools….
The initials “AD” are listed 10 times as the sole person requesting help for a student, and as a co-requester about 40 times. [A Duncan staffer] said “AD” stood for Arne Duncan, though Duncan’s involvement is unclear.[626]

Court Rulings

Zelman v. Simmons-Harris

* In the 2002 case of Zelman v. Simmons-Harris, the U.S. Supreme Court ruled (5–4) that a school choice initiative in Cleveland was constitutional. This program provided tuition aid for students:

to attend participating public or private schools of their parent’s choosing and tutorial aid for students who choose to remain enrolled in public school. Both religious and nonreligious schools in the district may participate, as may public schools in adjacent school districts. Tuition aid is distributed to parents according to financial need, and where the aid is spent depends solely upon where parents choose to enroll their children.[627]

* The Zelman case hinged upon:

  • the “Establishment of Religion” clause in the First Amendment to the Constitution, which prohibits Congress from making any law “respecting an establishment of religion, or prohibiting the free exercise thereof.”
  • the Fourteenth Amendment to the Constitution, which, among other things, made the First Amendment applicable to state and local governments.”[628] [629] [630]

* Per the majority ruling in Zelman:

The Ohio program is entirely neutral with respect to religion. It provides benefits directly to a wide spectrum of individuals, defined only by financial need and residence in a particular school district. It permits such individuals to exercise genuine choice among options public and private, secular and religious. The program is therefore a program of true private choice. In keeping with an unbroken line of decisions rejecting challenges to similar programs, we hold that the program does not offend the Establishment Clause.[631]

* Per a dissent by Justice David Souter:

In the city of Cleveland the overwhelming proportion of large appropriations for voucher money must be spent on religious schools if it is to be spent at all, and will be spent in amounts that cover almost all of tuition. The money will thus pay for eligible students’ instruction not only in secular subjects but in religion as well, in schools that can fairly be characterized as founded to teach religious doctrine and to imbue teaching in all subjects with a religious dimension.[632]

* Per a concurrence by Justice Sandra Day O’Connor, the Cleveland school choice program:

pales in comparison to the amount of funds that federal, state, and local governments already provide religious institutions. … Although data for all states is not available, data from Minnesota, for example, suggest that a substantial share of Pell Grant and other federal funds for college tuition reach religious schools.[633]

* Per a dissent by Justice John Paul Stevens:

… I am convinced that the Court’s decision is profoundly misguided. Admittedly, in reaching that conclusion I have been influenced by my understanding of the impact of religious strife on the decisions of our forbearers to migrate to this continent, and on the decisions of neighbors in the Balkans, Northern Ireland, and the Middle East to mistrust one another. Whenever we remove a brick from the wall that was designed to separate religion and government, we increase the risk of religious strife and weaken the foundation of our democracy.[634]

* Per a concurrence by Justice Clarence Thomas, the Cleveland program:

does not force any individual to submit to religious indoctrination or education. It simply gives [poor] parents a greater choice as to where and in what manner to educate their children. This is a choice that those with greater means have routinely exercised.[635]

* State supreme courts have ruled differently regarding whether various school choice programs are prohibited by their respective constitutions.[636] For example, the states of Florida and Indiana both enacted school choice programs that allowed certain children to attend private schools, but:

  • in 2006, the Florida Supreme Court ruled (5–2) that the program violated the state’s constitution, which calls for a “uniform, efficient, safe, secure, and high quality system of free public schools….”[637]
  • in 2013, the Indiana Supreme Court ruled (5–0) that the program did not violate the state’s constitution, which calls for a “general and uniform system of Common Schools.”[638]

Espinoza v. Montana Department of Revenue

* In the 2020 case of Espinoza v. Montana Department of Revenue, the U.S. Supreme Court ruled (5–4) that a publicly subsidized scholarship program could not exclude religious schools.[639]

* The Espinoza case hinged upon:

  • the “Establishment” and “Free Exercise” clauses in the First Amendment to the Constitution, which prohibit Congress from making any law “respecting an establishment of religion, or prohibiting the free exercise thereof.”
  • the proposed use of the scholarship for education at a religious school.[640] [641]

* Per the majority ruling in Espinoza:

Montana’s no-aid provision bars religious schools from public benefits solely because of the religious character of the schools. The provision also bars parents who wish to send their children to a religious school from those same benefits, again solely because of the religious character of the school. This is apparent from the plain text.[642]

* Per a dissent by Justice Sonia Sotomayor:

Contra the Court’s current approach, our free exercise [of religion] precedents had long-granted the government “some room to recognize the unique status of religious entities and to single them out on that basis for exclusion from otherwise generally applicable laws.”[643]

* Per a concurrence by Justice Clarence Thomas:

[T]he modern view, which presumes that States must remain both completely separate from and virtually silent on matters of religion to comply with the Establishment Clause, is fundamentally incorrect. Properly understood, the Establishment Clause does not prohibit States from favoring religion. They can legislate as they wish, subject only to the limitations in the State and Federal Constitutions.[644]

* Per a dissent by Justice Stephen Breyer:

There is no dispute that religious schools seek generally to inspire religious faith and values in their students. How else could petitioners claim that barring them from using state aid to attend these schools violates their free exercise rights? Thus, the question in this case … boils down to what the schools would do with state support. And the upshot is that here … we confront a State’s decision not to fund the inculcation of religious truths.[645]

* Per a concurrence by Justice Samuel Alito:

I join the opinion of the Court in full. The basis of the decision below was a Montana constitutional provision that, according to the Montana Supreme Court, forbids parents from participating in a publicly funded scholarship program simply because they send their children to religious schools. Regardless of the motivation for this provision or its predecessor, its application here violates the Free Exercise Clause.[646]

* As of 2021, the Friedman Foundation for Educational Choice has identified 77 school choice programs in 32 states, the District of Columbia, and Puerto Rico.[647]

Common Core

Overview

* Per the official Common Core website:

The Common Core is a set of high-quality [K–12] academic standards in mathematics and English language arts/literacy (ELA). These learning goals outline what a student should know and be able to do at the end of each grade.[648]

* The Common Core standards were developed and are maintained by the Common Core State Standards Initiative (CCSSI), which is a joint project of the Council of Chief State School Officers and the National Governors Association’s Center for Best Practices.[649] [650] [651]

* The Council of Chief State School Officers is a nonprofit organization controlled by the chief public education officials of each state, the District of Columbia, the U.S. military, and each U.S. territory.[652]

* The National Governors Association is an organization funded by the states and controlled by the governors of 55 U.S. states, territories, and commonwealths.[653] [654] The Center for Best Practices is a nonprofit organization that is “an integral part of the National Governors Association” but is “funded through federal grants and contracts, fee-for-service programs, private and corporate foundation contributions, and NGA’s Corporate Fellows program.”[655] [656]

* The Bill and Melinda Gates Foundation provided most of the money to create Common Core. This included money to develop the standards and build support for Common Core through donations to politicians, unions, civic leaders, and business organizations. Bill Gates, the wealthiest person in the world at the time, personally authorized this funding.[657] [658]

* In July 2009, CCSSI announced the names of 29 people that it had chosen to write the Common Core standards. The press release stated that:

  • these individuals were organized into two “working groups” consisting of 15 people for math and 14 people for ELA.
  • a “feedback group” will offer “expert input on draft documents,” but “final decisions” on the standards will be made by the working groups.
  • all “deliberations” of the working groups will “be confidential throughout the process.”[659]

* In September 2009, CCSSI announced that six governors and six chief state school officers had appointed a 29-person “validation committee” of education experts to review and certify the Common Core standards.[660]

* As a condition of being on the validation committee, each member had to agree to keep all “deliberations, discussions, and work” of the committee “strictly confidential” in perpetuity.[661] [662]

* In June 2010, the validation committee issued a report certifying the standards. The report listed 24 people who had signed the standards and:

  • stated that CCSSI had “convened a 25-member Validation Committee” (as opposed to the 29 members it actually convened[663]).
  • did not explicitly state that four of the committee members listed among the authors of the report refused to certify the standards.[664] [665]

* At least two of the committee members who declined to certify the standards have publicly criticized them and the process by which they were created.[666] [667]

* In November 2009, the Obama administration issued regulations governing how states could compete for $4.35 billion in federal education funds under its “Race to the Top” program. These regulations required states to demonstrate their “commitment to adopting a common set” of K–12 education standards. The regulations also stipulated that states would earn “high points” if they adopted the same standards as the “majority of the States in the country.”[668] [669] [670] [671]

* By September 2011, 44 states and the District of Columbia had adopted the Common Core standards.[672] [673]

* Among the 46 states that had adopted all or part of the Common Core standards by early 2014, six had done so by legislative action, and 40 by decisions made by state boards of education or chief education officials.[674] [675]

* As of March 2019:

  • 14 states who previously adopted the Common Core standards have replaced or rewritten them.
  • 31 states and the District of Columbia retain the full Common Core standards.
  • 1 state retains only the English language arts standards.
  • 4 states never adopted the standards.[676]

* New Hampshire, which retains the Common Core standards, passed a law in 2017 that prevents the state government “from requiring the implementation of the Common Core standards in any school or school district in this state.[677]

* In 2020, the governor of Florida removed and replaced the Common Core standards.[678]

* CCSSI asserts that the Common Core standards:

  • “represent what American students need to know and do to be successful in college and careers.”[679]
  • are “for the benefit of all students.”[680]
  • “are research- and evidence-based.”[681]

* Two of the Common Core validation committee members who refused to validate the standards assert that they:

  • “barely prepare students for attending a community college, let alone a 4-year university.”
  • employ approaches to math and geometry that have yielded “bad outcomes” for students.
  • are not justified by “suitable research.”[682] [683] [684] [685]

* Organizations other than CCSSI are developing common standards for science, world languages, and arts.[686]


Centralization & Decentralization

* In the field of education, “centralization” refers to the transfer of decision-making authority from individuals, teachers, schools, and local governments to state or national governments. “Decentralization” is the opposite of centralization.[687] [688]

* Common Core is a form of educational centralization because it specifies “a single body of knowledge and skills that students … will be expected to possess.”[689]

* The alleged benefits of centralizing education include but are not limited to:

  • more equity between schools with regard to standards, curriculum, testing, graduation requirements, funding, and teacher qualifications.[690] [691]
  • reduced costs through economies of scale, so that certain tasks are not repeated needlessly.[692] [693]
  • increased effectiveness in nations where students have similar cultural, ethnic, and linguistic backgrounds.[694]
  • greater likelihood of equipping students with broader skills that transcend local and regional variations.[695]
  • the ability to rapidly spread educational improvements across schools.[696] [697]

* The alleged benefits of decentralizing education include but are not limited to:

  • more flexibility for educators to teach and motivate students based upon their personal aptitudes, backgrounds, interests, and goals.[698] [699] [700] [701] [702]
  • reduced bureaucracy leading to fewer costs, “bureaucratic stagnation, centralized inefficiencies, and corruption.”[703] [704] [705] [706]
  • increased opportunity for communities to be involved in education and greater ability for them to effect change.[707] [708]
  • greater likelihood of equipping students with skills that are needed in the areas where they live.[709] [710]
  • less proliferation of counterproductive or ineffectual polices favored by central authorities.[711]

* Some of the factors that make it difficult to determine the effects of centralization and decentralization include:

  • the complexity of measuring centralization.[712] [713] [714] [715] [716]
  • dynamics that may cause centralization to be helpful in some settings and harmful in others.[717] [718]
  • numerous conflating variables that affect students and school systems.[719] [720]
  • a dearth of experimental studies on this issue.[721] [722] [723]

* CCSSI asserts that a “root cause” of U.S. academic stagnation has been “an uneven patchwork of academic standards that vary from state to state and do not agree on what students should know and be able to do at each grade level.”[724]

* In October 2015, Just Facts asked CCSSI to provide “specific studies” that prove academic stagnation has been caused by differing state education standards.[725] CCSSI responded but did not provide such research.[726]

* From 1920 to 2019, the portion of K–12 public school funding provided by:

  • local governments decreased from 83% to 45%.
  • state governments increased from 16% to 47%.
  • the federal government increased from 0.3% to 8%.[727]

* As the federal and state governments have funded a growing share of K–12 school expenses, the U.S. education system has become increasingly centralized. This has transferred decision-making power from community schools to higher levels of government through:

  • a decrease in public school districts from about 117,000 in 1940 to 13,452 in 2018.[728] [729]
  • district control over school personnel and curriculums.[730]
  • state-mandated “uniform standards across grade levels, schools, and districts.”[731]
  • state requirements on teacher certification, unionization, and binding arbitration.[732] [733] [734] [735] [736] [737] [738]
  • federal laws and regulations that require and incentivize states to adopt various standards, assessments, and policies.[739] [740] [741] [742]

* Per a 1980 academic book on the U.S. education system:

[T]he American assumption is that communities constitute the unit most capable of running the schools. While the state may mandate that districts’ boundaries be redrawn, the notion that a particular state might be capable of running all schools within its boundaries is unthinkable in the American context.[743]

* Per a 1997 academic book on education decentralization:

Site-based management [SMB] is a business derivative of decentralization and participatory decision-making. The intent of site-based management is to improve student performance by making those closest to the delivery of services—teachers and principals—more autonomous, resulting in their being more responsive to parents and students concerns.
While many schools in the United States claim to implement SBM, very little decision-making is truly decentralized. In most cases SBM is only a subset of the various types of decisions that are made at the district level. … The illusion of autonomy based on SBM is often constrictive because the district office retains the final authority or limits the range of decision-making….[744]

Math

* The complete Common Core math standards are available here.[745]

* R. James Milgram, Emeritus Professor at Stanford University’s Department of Mathematics, was the only mathematician who served on Common Core’s validation committee.[746] [747] [748] He refused to certify the standards and has been critical of them.[749]

* Other mathematicians have supported and opposed the standards.[750] [751] [752]


* CCSSI asserts that the math standards “call for speed and accuracy in calculation.”[753]

* The math standards require first graders to “think of whole numbers between 10 and 100 in terms of tens and ones” and solve problems such as:

  • “8 + 6” with “strategies” like this: “8 + 2 + 4 = 10 + 4 = 14”
  • “13 – 4” by “decomposing” numbers like this: “13 – 3 – 1 = 10 – 1 = 9”
  • “6 + 7” by “creating equivalent but easier or known sums” like this: “6 + 6 + 1 = 12 + 1 = 13”[754]

* The math techniques above are illustrated in the following videos produced by a local NBC television station. The station made these videos so that parents can help students who “find the math lessons confusing.” The lessons are taught by a local public school math teacher:[755]

Addition Using Base 10 for 1st Grade & Older

Subtraction Using Place Value Chart (2nd Grade)

* CCSSI asserts that the Common Core standards are “research- and evidence-based.”[756]

* In October 2015, Just Facts asked CCSSI to provide “specific studies” that prove the math strategies above are effective.[757] CCSSI responded but did not provide such research.[758] [759] [760]


* The Common Core math standards compel students to explain “why a particular mathematical statement is true or where a mathematical rule comes from.”[761]

* The following sample question and answer are from a teaching guide for 3rd grade Common Core math from the North Carolina Department of Public Instruction:

[Question]: “What do you notice about the numbers highlighted in pink in the multiplication table? Explain a pattern using properties of operations.”
Common Core Math Verbalization Problem
[Answer]: “When (commutative property) one changes the order of the factors they will still gets the same product, example 6 x 5 = 30 and 5 x 6 = 30.”[762]

* Per W. Stephen Wilson, Ph.D. mathematician, professor of mathematics at Johns Hopkins University, and Common Core supporter:[763] [764]

There will always be people who believe that you do not understand mathematics if you cannot write a coherent essay about how you solved a problem, thus driving future STEM [science, technology, engineering and math] students away from mathematics at an early age. A fairness doctrine would require English language arts (ELA) students to write essays about the standard [math] algorithms, thus also driving students away from ELA at an early age. The ability to communicate is NOT essential to understanding mathematics.[765]

* Per CCSSI:

There is a world of difference between a student who can summon a mnemonic device [i.e., reminder of as rule] to expand a product such as (a + b)(x + y) and a student who can explain where the mnemonic comes from. The student who can explain the rule understands the mathematics, and may have a better chance to succeed at a less familiar task such as expanding (a + b + c)(x + y). Mathematical understanding and procedural skill are equally important….[766]

* In October 2015, Just Facts asked CCSSI to provide “specific studies” proving that forcing student to verbalize “why a particular mathematical statement is true” improves their math education.[767] CCSSI responded but did not provide such research.[768] [769] [770]


* The Common Core math standards require students to solve math problems by using “concrete models,” “drawings,” and “objects.”[771] The following video shows an example of this:

Homework Helper: Division with a Remainder (4th Grade & Up)

* Per a 1989 meta-study of student learning styles published in Educational Leadership and republished in 2002 in the California Journal of Science Education:

  • “Learning style is a biologically and developmentally imposed set of personal characteristics that make the same teaching method effective for some and ineffective for others.”
  • Students have differing sensory learning preferences, such as sight, sound, and touch.
  • Students learn better and achieve higher test scores when they are taught with instructional resources that correspond to their sensory preferences.[772] [773]

* CCSSI asserts that the Common Core standards are “for the benefit of all students.”[774]

* In October 2015, Just Facts asked CCSSI to provide “specific studies” that prove drawing pictures and using objects improve students’ math abilities.[775] CCSSI responded but did not provide such research.[776] [777] [778]


English Language Arts

* The complete Common Core standards for “English Language Arts & Literacy in History/Social Studies, Science, and Technical Subjects” are available here.[779]

* Sandra Stotsky was the only expert on K–12 English language arts (ELA) standards who served on Common Core’s validation committee.[780] The validation committee report states that she is an:

Endowed Chair in Teacher Quality at the University of Arkansas’s Department of Education Reform and Chair of the Sadlier Mathematics Advisory Board
Stotsky has abundant experience in developing and reviewing ELA standards. As senior associate commissioner of the Massachusetts Department of Education, she helped revise pre-K–12 standards. She also served on the 2009 steering committee for NAEP reading and on the 2006 National Math Advisory Panel.[781]

* Stotsky refused to certify the standards and has been critical of them.[782] [783]

* Per CCSSI, the ELA standards:

  • “set grade-specific standards but do not define the intervention methods or materials necessary to support students who are well below or well above grade-level expectations.”[784]
  • “focus on what is most essential,” but “they do not describe all that can or should be taught. A great deal is left to the discretion of teachers and curriculum developers.”[785]
  • “intentionally do not include a required reading list. Instead, they include numerous sample texts to help teachers prepare for the school year and allow parents and students to know what to expect during the year.”[786]
  • require “much greater attention to a specific category of informational text—literary nonfiction—than has been traditional.”[787] [788]
  • require students to “evaluate the argument and specific claims in a text, assessing whether the reasoning is valid and the evidence is relevant and sufficient….”[789]
  • require students to “evaluate a speaker’s point of view, reasoning, and use of evidence and rhetoric, identifying any fallacious reasoning or exaggerated or distorted evidence.”[790]

* The ELA standards assert that “a particular standard was included in the document only when the best available evidence indicated that its mastery was essential for college and career readiness in a twenty-first-century, globally competitive society.”[791]


Impact on Curriculum & Teaching

* CCSSI states that the Common Core standards are “not a curriculum.”[792]

* Per a 2003 academic book about middle school education standards:

No issue currently impacts the middle level school more than curriculum reform based on state and national standards. … In fact, the aligning of curriculum and instruction to specific state content standards has become a universal teaching skill now taught in colleges of education and practiced in literally all school districts. Does this mean that the content of middle level curriculum is being controlled by the content of state standards, and, to some degree, the content of the state tests that are based on these standards? Certainly, without a doubt.[793]

* In 2009, Bill Gates, the primary financial backer of Common Core,[794] wrote that “identifying common standards is not enough. We’ll know we’ve succeeded when the curriculum and the tests are aligned to these standards.”[795]

* In 2010, the Common Core validation committee wrote that “alignment of curricula and assessments to the Common Core State Standards … will be essential to the staying power and lasting impact of the standards.”[796]

* In 2014, Bill Gates wrote:

These are standards, just like the ones schools have always had; they are not a curriculum. They are a blueprint of what students need to know, but they have nothing to say about how teachers teach that information. It’s still up to local educators to select the curriculum.[797]

* CCSSI asserts that the Common Core standards “do not dictate how teachers should teach.”[798]

* In 2014, Bill Gates wrote that the Common Core standards “are a blueprint of what students need to know, but they have nothing to say about how teachers teach that information.”[799]

* The Common Core ELA standards state that they “do not mandate such things as a particular writing process or the full range of metacognitive strategies that students may need to monitor and direct their thinking and learning.”[800] [801] The Common Core math standards do not contain a similar statement.[802]

* The Common Core math standards dictate the specific teaching processes and learning strategies shown in the examples above.

* Mathematician and Common Core supporter Hung-Hsi Wu has written that the Common Core math standards “say explicitly what needs to be taught” about the “process of reasoning” for solving equations.[803] In a commentary for American Educator, Wu detailed how Common Core requires the use of certain processes for adding fractions and mandates that these processes be taught over three years from grades 3 through 5. The first part of the 3rd grade teaching process is as follows:

Briefly, in grade 3, students learn to think of a fraction as a point on the number line that is “so many copies” of its corresponding unit fraction. For example, 5/6 is 5 copies of the unit fraction 1/6 (and 1/6 is 1 copy). When we represent a fraction as a point on the number line, we place a unit fraction such as 1/6 on the division point to the right of 0 when the unit segment from 0 to 1 is divided into 6 equal segments. It is natural to identify such a point with the segment between the point itself and 0. Thus, as shown below, 1/6 is identified with the red segment between 0 and 1/6, 5/6 is identified with the segment between 0 and 5/6, etc. Then, the statement that “5/6 is 5 copies of 1/6” acquires an obvious visual meaning: the segment from 0 to 5/6 is 5 copies of the segment from 0 to 1/6.[804]

* According to a math framework adopted by the Los Angeles County Office of Education and sponsored by Bill Gates:[805] [806]

Universal access to the content standards requires that educators apply a strong equity lens as they plan their instruction.[807]

* This framework asserts that, “White supremacy culture shows up in math classrooms when students are required to ‘show their work’ ” and instructs teachers to practice “how to answer mathematical problems without using words or numbers.”[808]

* For more facts about the impact of Common Core on teaching processes, see the forthcoming section on standardized tests.


Standardized Tests

* Tests (standardized and otherwise) can be used to:

  • “diagnose students’ strengths and weaknesses.”
  • “serve as the basis for teacher reflections on their instructional effectiveness.”
  • help “teachers to identify students who need additional instruction, special services, or more advanced work.”[809]
  • motivate students to learn and cognitively assist them in this process.[810] [811] [812]
  • help colleges and employers evaluate potential students and job candidates.[813] [814]
  • help parents, taxpayers, and policymakers evaluate the effectiveness of educators and education policies.[815]

* Per a 1980 academic book on the U.S. education system:

If no standardization exists, schools can postulate anything as satisfying graduation requirements. The development of standardized testing constitutes a response to this problem in the United States, but many graduates are led to believe that they have received a certain kind of education when, in reality their achievement is low.[816]

* When parents and governments don’t have access to valid information about student outcomes, school employees have leeway to minimize their workloads and favor their own interests over that of the students. Per a 2005 paper in the journal Education Economics, standardized exams can help remedy this problem “by supplying information about the performance of individual students relative to the national (or regional) student population.”[817] [818]

* Standardized tests can provide valid information about student outcomes if they accurately measure the desired effects of education. In education literature, this is called test validity. Per the Encyclopedia of Educational Psychology:

Validity is the extent to which a test measures what it was designed to measure. This means that tests are designed for specific purposes, and each test must have its own validity for the purpose for which it was designed. … That is, a test may consistently measure the wrong thing. Establishing test validity is thought to be a more complex process than establishing test reliability because establishing validity depends on the judgments to be made based on test results and how the results will be used. It is necessary to collect information as evidence that a test provides a true measure of such abstractions. To validate that tests provide true measures, certain information or evidence must be collected depending on the type of validity to be determined.[819]

* Per the Encyclopedia of Measurement and Statistics:

  • Standardized “test scores should never be used for purposes that are not validated.”
  • “The process of validation is a responsibility of the test developer and the sponsor of the testing program.”
  • “A technical report or test manual” should show “the argument and evidence supporting each intended test score interpretation or use.”[820]

* In 2010, the Obama administration awarded $330 million to two state-led consortiums to develop standardized tests that are aligned to Common Core:[821]

  1. The Partnership for Assessment of Readiness in College and Career (PARCC)[822]
  2. The SMARTER (Summative Multi-State Assessment Resources for Teachers and Educational Researchers) Balanced Assessment Consortium (SBAC)[823]

* In 2011, the Obama administration announced that it would exempt states from various requirements of federal education law if the states adhered to four conditions. The first of these was to adopt “college- and career-ready standards” and administer standardized tests aligned with these standards.[824] [825] [826] CCSSI refers to Common Core as “college- and career-readiness standards.”[827]

* Among the 46 states that adopted the Common Core standards, at least 26 became members of the PARCC consortium at some point, and at least 31 became members of the SBAC consortium at some point.[828] [829]

* In the 2014–15 school year, the first time the PARCC and SBAC tests were administered, 11 states and the District of Columbia used the PARCC exam, and 18 states used the SBAC exam.[830] [831] [832]

* Since the 2014–15 school year, several states that previously used the PARCC and SBAC exams have announced that they will not use them in the future.[833] [834] [835] [836] [837]

* SBAC maintains a list of states that are current members of the consortium.[838]

* PARCC used to maintain a list of states that were members of the consortium but no longer does so.[839] Per Education Week:

In 2015, its leaders decided to go in a new direction, allowing states to license content like specific test questions, rather than having a rigid membership model in which member states gave the whole test.[840] [841]

* Per a 2001 book on educational assessments published by the National Academies of Science:

[P]olicy makers see large-scale assessments of student achievement as one of their most powerful levers for influencing what happens in local schools and classrooms. Increasingly, assessments are viewed as a way not only to measure performance, but also to change it, by encouraging teachers and students to modify their practices.[842]

* David Coleman was a lead writer for the Common Core ELA standards, a cofounder of an organization that “played a leading role in developing” the standards, and one of the key people who lobbied Bill Gates to fund Common Core.[843] [844] [845] In 2011, Coleman stated that the Common Core standards:

are worthy of nothing if the assessments built on them are not worthy of teaching to, period. … [T]he great rule that I think is a statement of reality, though not a pretty one, which is teachers will teach towards the test. There is no force strong enough on this earth to prevent that. … Tests exert an enormous effect on instructional practice, direct and indirect, and it’s hence our obligation to make tests that are worthy of that kind of attention. It is in my judgment the single most important work we have to do over the next two years to ensure that that is so, period.[846]

* In 2012, Coleman became president of the College Board, the organization that produces the SAT college entrance exam and Advanced Placement tests.[847] [848] [849] [850]

* In 2013, Coleman announced that the College Board was going to “redesign the SAT” to “prepare students for the rigors of college and career.”[851]

* In 2014, the College Board published a “conversation guide” for the redesigned SAT that posed the question, “Is the SAT aligned to the Common Core?” The guide answered:

The redesigned SAT measures the skills and knowledge that evidence shows are essential for college and career success. It is not aligned to any single set of standards.[852]

* In March 2016, the redesigned SAT replaced the former version.[853]

Homeschooling

* Homeschooling is the oldest form of education, and it was common practice until public schools became prevalent in the mid-1800s.[854] [855] [856] [857]

* In 2019, approximately 1.46 million children or 2.8% of K–12 students in the U.S. were homeschooled. These figures are not categorical, because some of these students also took some classes and played sports in public and private schools and colleges.[858] [859] [860]

* Depending upon their level of education, parents homeschooled their children at the following rates in 2019:

  • High school diploma or less – 2.2%
  • Vocational/technical/associate’s or some college – 2.9%
  • Bachelor’s degree/some graduate school – 3.3%
  • Graduate/professional degree – 3.1%[861]

* Homeschooling is legal throughout the U.S. with widely varying state regulations on it. In the state of Washington, parents must be certified as teachers in order to homeschool.[862] [863] [864] [865]

* Homeschooling is permitted in most nations.[866] Germany has generally prohibited homeschooling since 1938 when the Nazi government enacted a law that effectively banned it.[867] [868] [869] Some other nations that ban or strictly limit homeschooling include Bulgaria, Greece, and the Netherlands.[870]

* A 2007 survey of parents who homeschool their children found that they did so for the following reasons:

Reason

Portion of Parents

Concern about the school environment, such as safety, drugs, or negative peer pressure

88%

Desire to provide religious or moral instruction to their children

83%

Dissatisfaction with academic instruction at other schools

73%

Desire to take a nontraditional approach to education

65%

Increased family time, financial considerations, flexibility to travel, or lack of proximity to an appropriate school

32%

Having a child with special needs “other than a physical or mental health problem that the parent feels the school cannot or will not meet”

21%

Having a child with a physical or mental health problem

11%

[871]

* In 2010, the journal Academic Leadership published a nationwide study of 11,739 homeschooled students during the 2007–08 school year. It found that parents spent a median of $400 to $599 per student on “textbooks, lesson materials, tutoring, enrichment services, testing, counseling, evaluation,” and other incidentals.[872] [873] Regarding these findings:

  • The study was based on a survey with a response rate of approximately 19%.[874] Thus, the results are not definitive.[875] [876] [877]
  • The families who participated in the survey were more likely than the general population to have bachelor’s degrees, be married, and not be racial minorities.[878] [879]
  • Adjusted for inflation into 2022 dollars, the median annual cost to educate a homeschooled student ranged from $541 to $810.[880]
  • These figures do not account for the cost of parental time investment or the value of being able to live in areas without regard for the quality of the local schools.[881]

* The same study in Academic Leadership examined the academic performance of 22,584 homeschooled students who took standardized tests administered by three major testing services. This was the broadest sample of homeschooled student test scores ever studied. The researcher found that the average performance of these students ranked in the top 20% of all U.S. students in each of the five academic disciplines examined:

Subject

Average National Ranking

Reading

87%

Language

81%

Math

80%

Science

82%

Social Studies

80%

[882]

* Regarding the findings above, the paper documents that “the above-average nature of these achievement test scores is also consistent” with nine other similar studies. Per the study’s author, Brian D. Ray (Ph.D. in science education):[883]

Comparisons between home-educated students and institutional school students nationwide should, however, be interpreted with thoughtfulness and care. … [This study] is not an experiment and readers should be careful about assigning causation to anything.
 
One could say … “This study simply shows that those parents choosing to make a commitment to home schooling are able to provide a very successful academic environment.” On the other hand, it may be that something about the typical nature and practice of home-based education causes higher academic achievement, on average, than does institutional state-run schooling….[884] [885]

* Per the Encyclopedia of Education Economics & Finance (2014):

More rigorous empirical work is needed regarding the “black box” of homeschooling before definitive conclusions are drawn.
 
At issue are several limitations for the study of homeschooler outcomes. First, there has been no empirical study thus far based on data obtained from a random sample of all homeschoolers. This means that the findings cannot be generalized from the study samples to the entire homeschooling population.[886]

Digital Learning

* Digital learning involves the use of computerized technologies to increase the effectiveness of education or reduce its costs.[887] [888]

* Forms of digital learning include (but are not limited to):

  • Online courses, which allow students to take courses that are not offered at their local public, private, or home schools. These courses also give students flexibility to pursue careers, independent study programs, athletics, and other endeavors.[889] [890] [891] [892]
  • Fully online schools, which “provide a student’s entire education online.” These schools offer accessibility to “hospitalized, homebound, pregnant, incarcerated, or other students in similar uncommon circumstances.”[893]
  • Adaptive learning software and platforms, which teach students through interactive courseware that analyzes each student’s learning style, academic needs, and intellectual abilities. The software then uses this information to deliver content designed to optimize each student’s learning potential. Per the SAGE Encyclopedia of Educational Technology:
Adaptive learning software and platforms, due to their ability to change the content and representations according to a student’s needs, resemble the situation when a personal instructor is available for each individual student.[894] [895]
  • Blended or hybrid learning, which combines traditional face-to-face teaching with digital technologies. Blended learning typically does not yield the cost savings of other digital learning approaches, because it does not reduce the need for school staff, school buildings, or student transportation.[896] [897] [898] [899]

* In the 2019–20 school year prior to the Covid-19 pandemic,[900] 17 states had publicly funded online K–12 schools that allowed students to take supplemental courses. Students took more than 1 million courses through these schools.[901] [902]

* With regard to fully online K–12 schools—primarily operated without physical buildings—that attract students from across districts:

  • Prior to the Covid-19 pandemic in the 2018–19 school year, 32 states and the District of Columbia permitted such schools, which educated about 375,000 students.[903] [904]
  • Amid the Covid-19 pandemic in the 2020–21 school year, 35 states and the District of Columbia permitted such schools, which educated about 656,000 students. This figure does not include students who temporarily studied remotely due to government shutdown of public schools amidst the Covid-19 pandemic.[905] [906] [907]

* With regard to college students:

  • In the 2015–16 school year, 43% of undergraduate students took at least one online class, and 11% took their entire degree program online.[908]
  • In the 2011–12 school year, 36% of graduate students took at least one online class, and 20% took exclusively online classes.[909]

* In 2013, the journal Teachers College Record published an analysis of 45 experimental (and quasi-experimental) studies that measured 50 effects of online and blended learning versus traditional face-to-face classrooms. These studies included K–12 students, college students, and people receiving job-related training. The authors found that:

  • “Among the 50 individual contrasts between online and face-to-face instruction, 11 were significantly positive, favoring the online or blended learning condition. Three significant negative effects favored traditional face-to-face instruction.”
  • In total, the studies showed that students who learned online fared about the same as students in traditional classrooms, and students in blended learning environments performed better than students in traditional classrooms. According to common (yet subjective) statistical conventions, the overall positive effect of blended learning was “small” to “medium.”
  • “Studies using blended learning also tended to involve additional learning time, instructional resources, and course elements that encourage interactions among learners.” These variables and others may have “contributed to the particularly positive outcomes for blended learning.”
  • This analysis of studies does “not reflect the latest technology innovations” since 2009, because “the cycle time for study design, execution, analysis, and publication cannot keep up with the fast-changing world of Internet technology.”[910] [911]

Footnotes

[1] Book: The SAGE Encyclopedia of Educational Technology. Edited by J. Michael Spector. Sage Publications, 2015. Article: “Adaptive Learning Software and Platforms.” By Dr. Kinshuk. Pages 7–10.

Page 9: “Various cognitive abilities of students are crucial for learning. Examples of these abilities include working memory capacity, inductive reasoning ability, information processing speed, associative learning skills, metacognitive skills, observation ability, analysis ability, and abstraction ability.”

[2] Paper: “The Importance of Noncognitive Skills: Lessons from the GED Testing Program.” By James J. Heckman and Yona Rubinstein. American Economic Review, May, 2001. Pages 145–149. <www.researchgate.net>

Pages 145–146:

Studies by Samuel Bowles and Herbert Gintis (1976), Rick Edwards (1976), and Roger Klein and others (1991) demonstrate that job stability and dependability are traits most valued by employers as ascertained by supervisor ratings and questions of employers although they present no direct evidence on wages and educational attainment. Perseverance, dependability, and consistency are the most important predictors of grades in school (Bowles and Gintis, 1976).

[3] Encyclopedia of Education Economics and Finance. Edited by Dominic J. Brewer and Lawrence O. Picus. Sage Publications, 2014.

Page 498:

Omitted variable bias (OVB) occurs when an important independent variable is excluded from an estimation model, such as a linear regression, and its exclusion causes the estimated effects of the included independent variables to be biased. Bias will occur when the excluded variable is correlated with one or more of the included variables. An example of this occurs when investigating the returns to education. This typically involves regressing the log of wages on the number of years of completed schooling as well as on other demographic characteristics such as an individual’s race and gender. One important variable determining wages, however, is a person’s ability. In many such regressions, a measure of ability is not included in the regression (or the measure included only imperfectly controls for ability). Since ability is also likely to be correlated with the amount of schooling an individual receives, the estimated return to years of completed schooling will likely suffer from OVB.

[4] Report: “Improving Health and Social Cohesion through Education.” Organization for Economic Cooperation and Development, Center for Educational Research and Innovation, 2010. <www.oecd.org>

Pages 31–33:

(a) Reverse causality

One source of endogeneity stems from the possibility that there is reverse causality, whereby poor health or low CSE [civic and social engagement] reduces educational attainment. Poor health in youth might interfere with educational attainment by interfering with student learning because of increased absences and inability to concentrate. It may also lead to poor adult health, thus creating a correlation between education and adult health. Similarly, low CSE such as lack of trust and political interest might also reduce educational attainment. For example, a family with low CSE might reduce their involvement with schools, which might lead to poorer student outcomes.7

The bias due to reverse causality can be re-cast as an omitted variable problem after considering timing issues. Since health and CSE tend to persist over time, past health or CSE can be an important determinant of current health or CSE. Thus, past health or CSE is an omitted variable in equation (1) which is captured by the error term. The extent to which omitting past health or CSE will lead to an omitted variable bias depends on the extent to which past health or CSE is also correlated with the included variable Education. Because the current stock of education depends on past decisions about investments in education, reverse causality generates a correlation between past health or CSE and the individual’s current stock of education.8 If the estimated coefficient picks up the effect of past health or CSE … will be biased towards overestimating the causal effect of education.

(b) Hidden third variables

The second source of endogeneity comes from the possibility that there might be one or more hard-to-observe hidden third variables which are the true causes of both educational attainment and health and CSE.9 In the context of the education–earnings link, the most commonly mentioned hidden third variable is ability.10 The long-standing concern in this line of research has been that people with greater cognitive ability are more likely to invest in more education, but even without more education their higher cognitive ability would lead to higher earnings (Card, 2001). More recently, non-cognitive abilities such as the abilities to think ahead, to persist in tasks, or to adapt to their environments have been suggested as important determinants of both education and earnings outcomes (Heckman and Rubinstein, 2001).

In the context of the education–health link, Fuchs (1993) describes time preference and self-efficacy as his favorite candidates for hidden third variables. People with a low rate of time preference are more willing to forego current utility and invest more in both education and health capital that pays off in the future (Farrell and Fuchs, 1982, Fuchs, 1982). A classic example is the Stanford Marshmallow Experiment in which 4 year-olds were given the choice between eating the marshmallow now or waiting for the experimenter’s return and getting a second marshmallow. When these children were tested again at age 18, Shoda and others (1990) found a strong correlation between delayed gratification at age 4 and mathematical and English competence. Similarly, people with greater self-efficacy, i.e. those who believe in their ability to exercise control over outcomes, will be more likely to invest in schooling and health. Most studies of the schooling–health link use data sets that do not contain direct or proxy measures of time preference and self-efficacy. Consequently, these variables are typically omitted when estimating equation (1). The resulting omitted variable bias again implies that … will be biased towards overestimating the causal effect of education on health.

In the context of the education–CSE link, Milligan and others (2004) suggest that the same parents who encourage their children to participate in civic activities might also instill in their children a stronger taste for education.11 It also seems reasonable to suggest time preference and self-efficacy as candidates for hidden third variables behind the education–CSE link. As suggested by the term “social capital”, education capital, health capital and CSE share some common features. In particular, a belief in self-efficacy is a potentially important determinant of civic participation and other aspects of investments in CSE. As in the education–health link, this type of omitted variable bias implies that … will be biased towards overestimating the causal effect of education on CSE.

A few recent studies have explored the issue of biases due to omitting measures of cognitive or non-cognitive skills in the context of the education–health link. Sander (1998) suggests that some of the negative correlation between attending college and smoking in the US can be attributed to differences in cognitive ability. Auld and Sidhu (2005) using the U.S. Armed Forces Qualification Test (AFQT) scores suggest that cognitive ability accounts for roughly one-quarter of the association between education and self-reported health limitations. Kenkel and others (2006) also use the AFQT score as a measure of cognitive skills and in addition include the Rotter index of the locus of control as a proxy for non-cognitive skills. They find that cognitive ability has strong associations with smoking, but weaker associations with being overweight. Their results for the Rotter index of locus of control12 suggest that men who believe that what happens to them is outside their control are more likely to currently smoke and are less likely to be former smokers. Locus of control is more weakly associated with women’s smoking and is not associated with the probability of being overweight or obese for either men or women. Hence, the empirical evidence from the United States suggests that cognitive and non-cognitive ability might be important omitted variables in many previous studies of the education–health link.

Page 36: “Although studies identifying the causal effect of education on health and CSE should strive to control for hidden third variables such as time preference, in most cases data limitations will severely limit the usefulness of this strategy.”

[5] Book: Higher Education: Handbook of Theory and Research (Volume 28). Edited by Michael B. Paulsen. Springer, 2013.

Chapter 6: “Instrumental Variables: Conceptual Issues and an Application Considering High School Course Taking.” By Rob M. Bielby and others. Pages 263–312.

Page 273:

Some student characteristics may be difficult or impossible to obtain information about in observational datasets, but this does not change the fact that they are confounding factors (Cellini, 2008). Examples of potential unobservable factors in course taking effects research include a student’s enjoyment of the learning process and a student’s desire to undertake and persevere through challenges. It is likely that these unobservable factors contribute to student selection into high school courses and a student’s subsequent choice to attain a bachelor’s degree.

[6] Paper: “What Roles Do Parent Involvement, Family Background, and Culture Play in Student Motivation?” By Alexandra Usher and Nancy Kober. Center on Education Policy, 2012. <eric.ed.gov>

Page 1:

Research has long documented a strong relationship between family background factors, such as income and parents’ educational levels, and student achievement. Studies have also shown that parents can play an important role in supporting their children’s academic achievement. But to what extent do family background and parent involvement affect student motivation, a critical underpinning of academic achievement and success in school?

This paper examines findings from research about the impact of various family background and cultural factors on student motivation, as well as the role of parental beliefs, attitudes, and actions in fostering children’s motivation. The paper does not attempt to be a comprehensive review of the broad literature on family background and achievement, but rather is a sampling of some current findings from the field that appear to impinge on motivation.

[7] Book: Knowing What Students Know: The Science and Design of Educational Assessment. Edited by James W. Pellegrino, Naomi Chudowsky, and Robert Glaser. National Academies Press, 2001. <www.nap.edu>

Page 39: “[A] teacher whose students have higher test scores is not necessarily better than one whose students have lower scores. The quality of inputs—such as the entry characteristics of students or educational resources available—must also be considered.”

Page 40:

As with evaluating teachers, care must be taken not to extend the results of assessments at a particular school to reach conclusions not supported by the evidence. For example, a school whose students have higher test scores is not necessarily better than one whose students have lower test scores. As in judging teacher performance, the quality of inputs—such as the entry characteristics of students or educational resources available—must also be considered.

[8] Book: Introductory Econometrics: Using Monte Carlo Simulation with Microsoft Excel. By Humberto Barreto and Frank M. Howland. Cambridge University Press, 2006.

Page 491:

Omitted variable bias is a crucial topic because almost every study in econometrics is an observational study as opposed to a controlled experiment. Very often, economists would like to be able to interpret the comparisons they make as if they were the outcomes of controlled experiments. In a properly conducted controlled experiment, the only systematic difference between groups results from the treatment under investigation; all other variation stems from chance. In an observational study, because the participants self-select into groups, it is always possible that varying average outcomes between groups result from systematic difference between groups other than the treatment. We can attempt to control for these systematic differences by explicitly incorporating variables in a regression. Unfortunately, if not all of those differences have been controlled for in the analysis, we are vulnerable to the devastating effects of omitted variable bias.

[9] Book: Multiple Regression: A Primer. By Paul D. Allison. Pine Forge Press, 1998.

Chapter 1: “What Is Multiple Regression?” <us.sagepub.com>

Page 20:

Multiple regression shares an additional problem with all methods of statistical control, a problem that is the major focus of those who claim that multiple regression will never be a good substitute for the randomized experiment. To statistically control for a variable, you have to be able to measure that variable so that you can explicitly build it into the data analysis, either by putting it in the regression equation or by using it to form homogeneous subgroups. Unfortunately, there’s no way that we can measure all the variables that might conceivably affect the dependent variable. No matter how many variables we include in a regression equation, someone can always come along and say, “Yes, but you neglected to control for variable X and I feel certain that your results would have been different if you had done so.”

[10] Book: Theory-Based Data Analysis for the Social Sciences (2nd edition). By Carol S. Aneshensel. SAGE Publication, 2013.

Page 90:

The numerous variables that are omitted from any model are routinely assumed to be uncorrelated with the error term, a requirement for obtaining unbiased parameter estimates from regression models. However, the possibility that unmeasured variables are correlated with variables that are in the model obviously cannot be eliminated on empirical grounds. Thus, omitted variable bias cannot be ruled out entirely as a counterargument for the empirical association between the focal independent and dependent variables in observational studies.

[11] Book: Applied Statistics for Economists. By Margaret Lewis. Routledge, 2012.

Page 413: “In economics, our primary concern is to identify and then include all relevant independent variables as indicated by economic theory.9 Omitting such variables will cause the regression model to be underspecified, with the partial regression coefficients that are affected by the omitted variable(s) will not equal the true population parameters.”

[12] Encyclopedia of Education Economics and Finance. Edited by Dominic J. Brewer and Lawrence O. Picus. Sage Publications, 2014.

Page 498:

Omitted variable bias (OVB) occurs when an important independent variable is excluded from an estimation model, such as a linear regression, and its exclusion causes the estimated effects of the included independent variables to be biased. Bias will occur when the excluded variable is correlated with one or more of the included variables. An example of this occurs when investigating the returns to education. This typically involves regressing the log of wages on the number of years of completed schooling as well as on other demographic characteristics such as an individual’s race and gender. One important variable determining wages, however, is a person’s ability. In many such regressions, a measure of ability is not included in the regression (or the measure included only imperfectly controls for ability). Since ability is also likely to be correlated with the amount of schooling an individual receives, the estimated return to years of completed schooling will likely suffer from OVB.

[13] Book: Higher Education: Handbook of Theory and Research (Volume 28). Edited by Michael B. Paulsen. Springer, 2013.

Chapter 6: “Instrumental Variables: Conceptual Issues and an Application Considering High School Course Taking.” By Rob M. Bielby and others. Pages 263–312.

Page 273:

An additional issue with the aforementioned studies is that none employ strategies to eliminate the influence of unobservable factors on course taking and attainment. Some student characteristics may be difficult or impossible to obtain information about in observational datasets, but this does not change the fact that they are confounding factors (Cellini, 2008). Examples of potential unobservable factors in course taking effects research include a student’s enjoyment of the learning process and a student’s desire to undertake and persevere through challenges. It is likely that these unobservable factors contribute to student selection into high school courses and a student’s subsequent choice to attain a bachelor’s degree. However, none of the studies we examined that employ a standard regression approach accounted for a student’s intrinsic love of learning or ability to endure through difficulties; the failure to account for these unobserved factors may bias the estimates that result from these studies.

[14] Book: Multiple Regression: A Primer. By Paul D. Allison. Pine Forge Press, 1998.

Chapter 1: “What Is Multiple Regression?” <us.sagepub.com>

Page 1: “Multiple regression is a statistical method for studying the relationship between a single dependent variable and one or more independent variables. It is unquestionably the most widely used statistical technique in the social sciences. It is also widely used in the biological and physical sciences.”

Chapter 3: “What Can Go Wrong With Multiple Regression?” <us.sagepub.com>

Page 49:

Any tool as widely used as multiple regression is bound to be frequently misused. Nowadays, statistical packages are so user-friendly that anyone can perform a multiple regression with a few mouse clicks. As a result, many researchers apply multiple regression to their data with little understanding of the underlying assumptions or the possible pitfalls. Although the review process for scientific journals is supposed to weed out papers with incorrect or misleading statistical methods, it often happens that the referees themselves have insufficient statistical expertise or are simply too rushed to catch the more subtle errors. The upshot is that you need to cast a critical eye on the results of any multiple regression, especially those you run yourself.

Fortunately, the questions that you need to ask are neither extremely technical nor large in number. They do require careful thought, however, which explains why even experts occasionally make mistakes or overlook the obvious. Virtually all the questions have to do with situations where multiple regression is used to make causal inferences.

NOTE: Pages 49–65 detail eight possible pitfalls of regression analyses.

Page 65: “The preceding eight problems are the ones I believe most often lead to serious errors in judging the results of a multiple regression. By no means do they exhaust the possible pitfalls that may arise. Before concluding this chapter, I’ll briefly mention a few others.”

Page 67: “Non-experimental data rarely tell you anything about the direction of a causal relationship. You must decide the direction based on your prior knowledge of the phenomenon you’re studying.”

[15] Book: Regression With Social Data: Modeling Continuous and Limited Response Variables. By Alfred DeMaris. John Wiley & Sons, 2004.

Page 9:

Regression modeling of nonexperimental data for the purpose of making causal inferences is ubiquitous in the social sciences. Sample regression coefficients are typically thought of as estimates of the causal impacts of explanatory variables on the outcome. Even though researchers may not acknowledge this explicitly, their use of such language as impact or effect to describe a coefficient value often suggest a causal interpretation. This practice is fraught with controversy….

Page 12:

Friedman … is especially critical of drawing causal inferences from observational data, since all that can be “discovered,” regardless of the statistical candlepower used, is association. Causation has to be assumed into the structure from the beginning. Or, as Friedman … says: “If you want to pull a causal rabbit out of the hat, you have to put the rabbit into the hat.” In my view, this point is well taken; but it does not preclude using regression for causal inference. What it means, instead, is that prior knowledge of the causal status of one’s regressors is a prerequisite for endowing regression coefficients with a causal interpretation, as acknowledged by Pearl 1998.

Page 13: “In sum, causal modeling via regression, using nonexperimental data, can be a useful enterprise provided we bear in mind that several strong assumptions are required to sustain it. First, regardless of the sophistication of our methods, statistical techniques only allow us to examine associations among variables.”

[16] Article: “Statistical Malpractice.” By Bruce G. Charlton. Journal of the Royal College of Physicians of London, March 1996. <www.researchgate.net>

Page 112: “Science is concerned with causes but statistics is concerned with correlations.”

Page 113:

The root of most instances of statistical malpractice is the breaking of mathematical neutrality and the introduction of causal assumptions into analysis without justifying them on scientific grounds. This amounts to performing science by sleight-of-hand: the quickness of the statistics deceives the mind. The process is often accidental, the product of misunderstanding rather than of malice—as commonly happens when statistical adjustments or standardization of populations are performed to remove the effects of confounding variables.6 These are maneuvers by which data sets are recalculated (for example, by stratified or multivariate analysis) in an attempt to eliminate the consequences of uncontrolled “interfering” variables which distort the causal relationship under study. …

There are however, no statistical rules by which confounders can be identified, and the process of adjustment involves making quantitative causal assumptions based upon secondary analysis of the database in question. …

Adjustment is therefore, implicitly, a way of modeling the magnitude of a causal process in order to subtract its effects from the data. However, modeling is not mathematically neutral and involves inputting assumptions—an activity which requires to be justified for each case. …

… Statistical malpractice occurs, however, exactly because it has not dispensed with causation, but has merely concealed it under a cloak of mathematical neutrality.

[17] Paper: “Econometric Methods for Causal Evaluation of Education Policies and Practices: A Non-Technical Guide.” By Martin Schlotter, Guido Schwerdt, and Ludger Woessmann. Education Economics, January 2011. <www.tandfonline.com>

Page 110:

Using standard statistical methods, it is reasonably straightforward to establish whether there is an association between two things—for example, between the introduction of a certain education reform (the treatment) and the learning outcome of students (the outcome). However, whether such a statistical correlation can be interpreted as the causal effect of the reform on outcomes is another matter. The problem is that there may well be other reasons why this association comes about.

Page 111:

Whenever other reasons exist that give rise to some correlation between the two things of interest—the treatment and the outcome—the overall correlation cannot be interpreted as the causal effect of the treatment on the outcome. Broadly speaking, this is what economists call the ‘endogeneity problem’. The term stems from the idea that treatment cannot be viewed as exogenous to the model of interest, as it should be, but that it is rather endogenously determined within the model—depending on the outcome or being jointly determined with the outcome by a third factor. Because of the problem of endogeneity, estimates of the association between treatment and outcome based on correlations will be biased estimates of the causal effect of treatment on outcome.2

Standard approaches try to deal with this problem by observing the other sources of possible correlation and take out the difference in outcomes that can be attributed to these other observed differences. This is the approach of multivariate models that estimate the effects of multiple variables on the outcome at the same time, such as the classical ordinary least-squares (OLS) or multilevel modeling (or hierarchical linear models, HLM) techniques. They allow estimating the association between treatment and outcome conditional on the effects of the other observed factors.

2 Other possible sources of endogeneity include self-selection (objects with different characteristics can choose whether to be treated or not) and simultaneity (treatment and outcome are choice variables that are jointly determined). In econometric terms, measurement error in the treatment variable can also be interpreted as an endogeneity problem, because it gives rise to a particular form of association between treatment and outcome (one that generally biases the estimates toward finding no effect, even if there was one).

Page 131:

But obtaining convincing evidence on the effects on specific education policies and practices is not an easy task. As a precondition, relevant data on possible outcomes has to be gathered. What is more, showing a mere correlation between a specific policy or practice and potential outcomes is no proof that the policy or practice caused the outcome. For policy purposes, mere correlations are irrelevant, and only causation is important. What policy-makers care about is what would really happen if they implemented a specific policy or practice—would it really change any outcome that society cares about? In order to implement evidence-based policy, policy-makers require answers to such causal questions.

[18] Book: Multiple Regression: A Primer. By Paul D. Allison. Pine Forge Press, 1998.

Chapter 1: “What Is Multiple Regression?” <us.sagepub.com>

Page 20:

Multiple regression shares an additional problem with all methods of statistical control, a problem that is the major focus of those who claim that multiple regression will never be a good substitute for the randomized experiment. To statistically control for a variable, you have to be able to measure that variable so that you can explicitly build it into the data analysis, either by putting it in the regression equation or by using it to form homogeneous subgroups. Unfortunately, there’s no way that we can measure all the variables that might conceivably affect the dependent variable. No matter how many variables we include in a regression equation, someone can always come along and say, “Yes, but you neglected to control for variable X and I feel certain that your results would have been different if you had done so.”

That’s not the case with randomization in an experimental setting. Randomization controls for all characteristics of the experimental subjects, regardless of whether those characteristics can be measured. Thus, with randomization there’s no need to worry about whether those in the treatment group are smarter, more popular, more achievement oriented, or more alienated than those in the control group (assuming, of course, that there are enough subjects in the experiment to allow randomization to do its job effectively).

[19] Book: The Education Gap: Vouchers and Urban Schools (Revised edition). By William G. Howell and Paul E. Peterson with Patrick J. Wolf and David E. Campbell. Brookings Institution Press, 2006 (first published in 2002). <www.brookings.edu>

Page 39:

In a perfectly controlled experiment in the natural sciences, the researcher is able to control for all factors while manipulating the variable of interest. …

Experiments with humans are much more difficult to manage. Researchers cannot give out pills or placebos and then ask subjects not to change any other aspect of their lives. To conduct an experiment in the social sciences that nonetheless approximates the natural-science ideal, scientists have come up with the idea of random assignment—drawing names out of a hat (or, today, by computer) and putting subjects into a treatment or control group. When individuals are assigned randomly to one of two categories, one can assume that the two groups do not differ from each another systematically, except in the one respect under investigation.

Page 40:

It is the very simplicity of random assignment that makes such studies so eloquent and their findings so compelling. Simply by comparing what happens to members of the treatment and control groups, analysts can assess whether an intervention makes any difference, positive or negative. Of course, complications inevitably arise. People in the treatment group refuse treatment. People in the control group discover alternative ways of getting the treatment. People fail to report back, or move away, or provide inaccurate information. Still, statisticians have found a variety of ways to correct for such eventualities; such adjustments are discussed in greater detail below.

[20] Paper: “Econometric Methods for Causal Evaluation of Education Policies and Practices: A Non-Technical Guide.” By Martin Schlotter, Guido Schwerdt, and Ludger Woessmann. Education Economics, January 2011. <www.tandfonline.com>

Page 132:

In medical research, experimental evaluation techniques are a well-accepted standard device to learn what works and what does not. No one would treat large numbers of people with a certain medication unless it has been shown to work. Experimental and quasi-experimental studies are the best way to reach such an assessment. It is hoped that a similar comprehension is reached in education so that future education policies and practices will be able to better serve the students.

[21] Paper: “Private School Vouchers and Student Achievement: An Evaluation of the Milwaukee Parental Choice Program.” By Cecilia Elena Rouse. Quarterly Journal of Economics, May, 1998. Pages 553–602. <eml.berkeley.edu>

Page 554:

Ideally, the issue of the relative effectiveness of private versus public schooling could be addressed by a social experiment in which children in a well-defined universe were randomly assigned to a private school (the “treatment group”), while others were assigned to attend public schools (the “control group”). After some period of time, one could compare outcomes, such as test scores, high school graduation rates, or labor market success between the treatment and control groups. Since, on average, the only differences between the groups would be their initial assignment—which was randomly determined—any differences in outcomes could be attributed to the type of school attended.

[22] Paper: “Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects.” By Michael L. Anderson. Journal of the American Statistical Association, December 2008. Pages 1481–1495. <are.berkeley.edu>

Page 1483: “The random assignment process makes estimation of causal effects straightforward.”

Page 1484: “Note that no assumptions regarding the distributions or independence of potential outcomes are needed. This is because the randomized design itself is the basis for inference (Fisher 1935), and preexisting clusters cannot be positively correlated with the treatment assignments in any systematic way.”

[23] Paper: “Another Look at the New York City School Voucher Experiment.” By Alan B. Krueger and Pei Zhu. American Behavioral Scientist, January 2004. Pages 658–698. <abs.sagepub.com>

Page 660: “Because of random assignment, however, estimates are unbiased even

without conditioning on baseline information….”

Pages 693–694:

Researchers are often unsure as to whether they should or should not control for baseline characteristics when a treatment is randomly assigned. We would advise that key results be presented both ways, with and without baseline characteristics (and with and without varying samples). …

Controlling for baseline characteristics can be justified if their inclusion increases the precision of the key estimates. As a practical matter, however, controlling for baseline characteristics tends to reduce the sample size, which could well offset the decline in residual variance and create a nonrepresentative sample.

Simplicity and transparency are valuable in their own right and can help prevent mistakes. These benefits may be well worth the loss of some precision. A complicated design increases the likelihood of error down the road, for example, in the derivation of weights or in the delineation of strata within which the treatment is randomly assigned. An underappreciated virtue of presenting results without baseline covariates is that the results are transparent and simple, and therefore less prone to human error.

[24] Book: Regression With Social Data: Modeling Continuous and Limited Response Variables. By Alfred DeMaris. John Wiley & Sons, 2004.

Page 10:

Nonetheless, according to the potential response model, the average causal effect can be estimated in an unbiased fashion if there is random assignment to the cost. Unfortunately, this pretty much rules out making causal inferences from nonexperimental data. … Still, hard-core adherence to the potential response framework would deny the causal status of most of the interesting variables in the social sciences because they are not capable of being assigned randomly. Holland and Rubin, for example have made up a motto that expresses this quite succinctly: “No causation without manipulation” (Holland, 1986, p. 959). In other words, only “treatments” that can be assigned randomly to any case at will are considered candidates for exhibiting causal effects. … I agree with others … who take exception to this restrictive conception of causality, despite the intuitive appeal of counterfactual reasoning.

Page 13:

Sobel’s (1988, p. 346) advice is in the same vein: “[s]ociologists might follow the example of epidemiologists. Here, when an association is found in an observational study that might plausibly suggest causation, the findings are treated as preliminary and tentative. The next step, when possible, is to conduct the randomized study that will more definitively answer the causal question of interest.”

[25] Paper: “A Modified General Location Model for Noncompliance with Missing Data: Revisiting the New York City School Choice Scholarship Program Using Principal Stratification.” By Hui Jin and others. Journal of Educational and Behavioral Statistics, April 2010. Pages 154–173. <jeb.sagepub.com>

Pages 154–155: “Although quite a few school choice voucher programs have been conducted across the United States, the New York City School Choice Scholarship Program is arguably the largest and best-implemented private school choice randomized experiment to date. However, even this program suffers from two common complications in social science experiments: missing data and noncompliance.”

[26] Dataset: “Table 3.16. Government Current Expenditures by Function [Billions of Dollars].” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 29, 2021. <www.bea.gov>

“Government1 … Education … 2020 [=] 1,036.5”

[27] Calculated with the dataset: “AVG1. Average Number of People Per Household, by Race and Hispanic Origin1, Marital Status, Age, and Education of Householder: 2020.” U.S. Census Bureau, Current Population Survey, 2019 Annual Social and Economic Supplement, December 2020. <www2.census.gov>

“Total households (in thousands) … All [=] 128,451”

CALCULATION: $1,036,500,000,000 education spending / 128,451,000 households = $8,069

[28] Calculated with the dataset: “Table 1.1.5. Gross Domestic Product [Billions of Dollars].” United States Department of Commerce, Bureau of Economic Analysis. Last revised November 24, 2021. <www.bea.gov>

“Gross domestic product … 2020 [=] 20,893.7”

CALCULATION: $1,036.5 billion education spending / $20,893.7 billion GDP = 5.0%

[29] Calculated with the dataset: “Table 3.16. Government Current Expenditures by Function [Billions of Dollars].” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 29, 2021. <www.bea.gov>

“2020 … Government1 [=] 8,934.4 … Education [=] 1,036.5”

CALCULATION: $1,036.5 billion / $8,934.4 billion = 12%

[30] As documented below, government “total expenditures” is a more inclusive measure of spending than “current expenditures,” but the U.S. Bureau of Economic Analysis—which provides the only comprehensive and timely estimates of government spending at all levels—does not publish total expenditures broken down by function (for example, education, healthcare, etc.). Instead, it only publishes current expenditures by function.† ‡

“Current expenditures” include “all spending by government on current-period activities,” such as:

  • “consumption expenditures,” or “what government spends on its work force and for goods and services, such as fuel for military jets and rent for government buildings and other structures.”
  • “current transfer payments,” which consist of:
    • “social benefits,” or “payments from social insurance funds, such as social security and Medicare, and payments providing other income support, such as Medicaid and food stamp benefits.”
    • “grants-in-aid to state and local governments.”
    • “transfers to the rest of the world,” or “federal aid to foreign countries and payments to international organizations such as the United Nations.”
  • “interest payments,” or the costs “of borrowing by governments to finance their capital and operational costs.”
  • “subsidies,” or grants to businesses, other government entities, and homeowners.§ †

“Total expenditures” include all current expenditures plus:

  • “gross investment,” or “what government spends on structures, equipment, and software, such as new highways, schools, and computers.” This also includes research expenditures.
  • “other capital-type expenditures that affect future-period activities,” such as payments to foreigners.
  • “net purchases of nonproduced assets,” such as land.§ † Φ

NOTES:

  • † Report: “A Primer on BEA’s Government Accounts.” By Bruce E. Baker and Pamela A. Kelly. U.S. Bureau of Economic Analysis, March 2008. <apps.bea.gov>. Page 29: “The federal estimates in the NIPAs [National Income and Product Accounts] contain much of the same information as the Budget of the United States Government, although the information is classified differently. The state and local estimates in the NIPAs are the only comprehensive estimates of state and local government activity available on a timely basis.” Page 34: “Current transfer payments. These consist of social benefits and other current transfer payments to the rest of the world. Social benefits are payments from social insurance funds, such as social security and Medicare, and payments providing other income support, such as Medicaid and food stamp benefits. Other current transfers to the rest of the world consists of federal aid to foreign countries and payments to international organizations such as the United Nations. Federal ‘other current transfer payments’ also includes grants-in-aid to state and local governments. … Interest payments. These represent the cost of borrowing by governments to finance their capital and operational costs. … Subsidies. These are payments to businesses, including homeowners and government enterprises at another level of government.”
  • ‡ Email from the U.S. Bureau of Economic Analysis to Just Facts, March 18, 2015. “BEA does not produce an estimate of government total expenditures by function as defined by the national income and product accounts (NIPAs).”
  • § Webpage: “FAQ: BEA Seems to Have Several Different Measures of Government Spending. What Are They for and What Do They Measure?” U.S. Bureau of Economic Analysis (BEA). Last modified April 28, 2020. <www.bea.gov>. “Consumption expenditures include what government spends on its work force and for goods and services, such as fuel for military jets and rent for government buildings and other structures. Gross investment includes what government spends on structures, equipment, and software, such as new highways, schools, and computers. … Current expenditures measures all spending by government on current-period activities, and consists not only of government consumption expenditures, but also current transfer payments, interest payments, and subsidies (and removes wage accruals less disbursements#). … Total government expenditures: In addition to the transactions that are included in current expenditures, this measure includes gross investment (as defined earlier), and other capital-type expenditures that affect future-period activities, such as capital transfer payments and net purchases of nonproduced assets (for example, land).”£
  • # Email from the U.S. Bureau of Economic Analysis to Just Facts, March 18, 2015. “Wage accruals less disbursements is no longer an adjustment that is needed in the accounts as BEA’s income estimates for wages were moved to an accrual basis during the 2013 comprehensive revision.”
  • £ Webpage: “Glossary: Capital Transfers to the Rest of the World (Net).” U.S. Bureau of Economic Analysis. Last modified April 13, 2018. <www.bea.gov>. “Cash or in-kind transfers to foreigners that are linked to the acquisition or disposition of a fixed asset.”
  • Φ Email from the U.S. Bureau of Economic Analysis to Just Facts, June 19, 2015. “As of July 2013, research expenditures are included in the NIPAs as investment.”

[31] See the footnote above, which documents that the U.S. Bureau of Economic Analysis does not publish total expenditures for education or any other specific function of government. Per the U.S. Bureau of Economic Analysis, land purchases are included in total expenditures but not in current expenditures:

Total government expenditures: In addition to the transactions that are included in current expenditures, this measure includes … net purchases of nonproduced assets (for example, land).” [Webpage: “FAQ: BEA Seems to Have Several Different Measures of Government Spending. What Are They for and What Do They Measure?” U.S. Bureau of Economic Analysis. Last modified April 28, 2020. <www.bea.gov>]

[32] See the second footnote above, which documents that the U.S. Bureau of Economic Analysis does not publish data for education total expenditures. Per the U.S. Bureau of Economic Analysis, purchases of durable items such as buildings and computers are included in total expenditures but not in current expenditures:

Gross investment includes what government spends on structures, equipment, and software, such as new highways, schools, and computers. …

Total government expenditures: In addition to the transactions that are included in current expenditures, this measure includes gross investment….†

Note that although current expenditures do not include gross investment, they do include “consumption of fixed capital,” which measures the depreciation of durable items as they are used.‡ § This accounts for most (but not all) of the costs of these items. From 1929 through 2014, consumption of fixed capital was roughly 70% of gross government investment.#

NOTES:

  • † Webpage: “FAQ: BEA Seems to Have Several Different Measures of Government Spending. What Are They for and What Do They Measure?” U.S. Bureau of Economic Analysis. Last modified April 28, 2020. <www.bea.gov>
  • ‡ Report: “A Primer on BEA’s Government Accounts.” By Bruce E. Baker and Pamela A. Kelly. U.S. Bureau of Economic Analysis, March 2008. <apps.bea.gov>

Page 33: “Consumption expenditures [include] … consumption of fixed capital….”

Page 38: “In estimating the national income and product accounts, it is necessary to compute consumption of fixed capital (CFC) or depreciation. … In the government accounts, CFC is used as a proxy for the services derived from government capital investment, both past and present.”

  • § Calculated with data from “Table 3.1. Government Current Receipts and Expenditures.” U.S. Bureau of Economic Analysis. Last revised February 27, 2015. <www.bea.gov>. NOTE: An Excel file containing the data and calculations is available upon request.

[33] The next six footnotes document that:

  • Substantial amounts of healthcare benefits promised to government employees are unfunded.
  • Accrual accounting (as opposed to cash accounting) of these benefits would measure these unfunded liabilities.
  • The U.S. Bureau of Economic Analysis (the source of the education spending figures cited above) uses cash accounting (as opposed to accrual accounting) to measure government spending on retiree healthcare benefits.

[34] Report: “State and Local Government Retiree Health Benefits: Liabilities Are Largely Unfunded, but Some Governments Are Taking Action.” U.S. Government Accountability Office, November 2009. <www.gao.gov>

Page 2 (of PDF):

Accounting standards require governments to account for the costs of other post-employment benefits (OPEB)—the largest of which is typically retiree health benefits—when an employee earns the benefit. As such, governments are reporting their OPEB liabilities—the amount of the obligation to employees who have earned OPEB. As state and local governments have historically not funded retiree health benefits when the benefits are earned, much of their OPEB liability may be unfunded. Amid fiscal pressures facing governments, this has raised concerns about the actions the governments can take to address their OPEB liabilities. …

The total unfunded OPEB liability reported in state and the largest local governments’ CAFRs [comprehensive annual financial reports] exceeds $530 billion. However, as variations between studies’ totals show, totaling unfunded OPEB liabilities across governments is challenging for a number of reasons, including the way that governments disclose such data. The unfunded OPEB liabilities for states and local governments GAO [Government Accountability Office] reviewed varied widely in size. Most of these governments do not have any assets set aside to fund them. The total for unfunded OPEB liabilities is higher than $530 billion because GAO reviewed OPEB data in CAFRs for the 50 states and 39 large local governments but not data for all local governments or additional data reported in separate financial reports. Also, the CAFRs we reviewed report data that predate the market downturn. Finally, OPEB valuations are based on assumptions about the health care cost inflation rate and discount rates for assets, which also affect the size of the unfunded liability.

Some state and local governments have taken actions to address liabilities associated with retiree health benefits by setting aside assets to prefund the liabilities before employees retire and reducing these liabilities by changing the structure of retiree health benefits. Approximately 35 percent of the 89 governments for which GAO reviewed CAFRs reported having set aside some assets for OPEB liabilities, but the percentage of the OPEB liability funded varied.

[35] Article: “Defined Benefit Pensions and Household Income and Wealth.” By Marshall B. Reinsdorf and David G. Lenze. Survey of Current Business, U.S. Bureau of Economic Analysis, August 2009. Pages 50–62. <apps.bea.gov>

Pages 50–51:

U.S. households usually participate in two kinds of retirement income programs: social security, and a plan sponsored by their employer. The employer plan may be organized as either a defined contribution plan, such as a 401(k) plan, or a defined benefit plan. Defined contribution plans provide resources during retirement based on the amount of money that has been accumulated in an account, while defined benefit plans determine the level of benefits by a formula that typically depends on length of service and average or final pay. …

… A defined benefit plan has an actuarial liability for future benefits equal to the expected present value of the benefits to which the plan participants are entitled under the benefit formula. The value of participants’ benefit entitlement often does not coincide with the value of the assets that the plan has on hand; indeed, a plan that has a pay-as-you-go funding scheme might have only enough assets to ensure that it can make the current period’s benefit payments.2

A complete measure of the wealth of defined benefit plan participants is the expected present value of the benefits to which they are entitled, not the assets of the plan. This follows from the fact that if the assets of a defined benefit plan are insufficient to pay promised benefits, the plan sponsor must cover the shortfall. …

… [U]nder the accrual approach, the measure of compensation income for the participants in the plan is no longer the employer’s actual contributions to the plan. Instead, it is the present value of the benefits to which employees become entitled as a result of their service to the employer.

Measuring household income from defined benefit plans by actual contributions from employers plus actual investment income on plan assets can be considered a cash accounting approach to measuring these plans’ transactions…. We use the term “accrual accounting” to mean any approach that adopts the principle that a plan’s benefit obligations ought to be recorded as they are incurred.

2. Federal law requires that private pension plans operate as funded plans, not as pay-as-you-go plans.

[36] Report: “Preview of the 2013 Comprehensive Revision of the National Income and Product Accounts: Changes in Definitions and Presentations.” By Shelly Smith and others. U.S. Bureau of Economic Analysis, March 2013. <apps.bea.gov>

Page 21: “Accrual accounting is the preferred method for compiling national accounts because it matches incomes earned from production with the corresponding productive activity and records both in the same period.”

[37] Statement: “Employers’ Accounting for Postretirement Benefits Other Than Pensions.” Financial Accounting Standards Board, December 1990. <www.fasb.org>

The Board believes that measurement of the obligation and accrual of the cost based on best estimates are superior to implying, by a failure to accrue, that no obligation exists prior to the payment of benefits. The Board believes that failure to recognize an obligation prior to its payment impairs the usefulness and integrity of the employer’s financial statements. …

This Statement relies on a basic premise of generally accepted accounting principles that accrual accounting provides more relevant and useful information than does cash basis accounting. …

[L]ike accounting for other deferred compensation agreements, accounting for postretirement benefits should reflect the explicit or implicit contract between the employer and its employees.

[38] Email from the U.S. Bureau of Economic Analysis to Just Facts, March 19, 2015.

“Retiree health care benefits (which are separate from pensions) are treated on a cash basis and are effectively included in the compensation of current workers.”

[39] Webpage: “What Is Included in Federal Government Employee Compensation?” U.S. Bureau of Economic Analysis. Last modified July 26, 2018. <www.bea.gov>

The contributions for employee health insurance consist of the federal share of premium payments to private health insurance plans for current employees and retirees1.

1 The payments to amortize the unfunded health care liabilities of the Postal Service Retiree Health Benefits Fund are treated as capital transfers to persons and are therefore not included in compensation.

[40] Dataset: “Table 3.16. Government Current Expenditures by Function [Billions of Dollars].” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 29, 2021. <www.bea.gov>

“2020 [Billions of dollars] … Education [=] 1,036.5 … Elementary and secondary [=] 719.3 … Higher [=] 217.5 … Libraries and other [=] 99.7”

[41] Calculated with data from:

a) Dataset: “Table 3.16. Government Current Expenditures by Function [Billions of Dollars].” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 29, 2021. <www.bea.gov>

b) Dataset: “Table 3.1—Outlays by Superfunction and Function: 1940–2026.” White House Office of Management and Budget, May 2021. <www.whitehouse.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[42] The next 3 footnotes document that:

  • Private-sector economic output is equal to personal consumption expenditures (PCE) + gross private domestic investment (GPDI) + net exports of goods and services.
  • PCE is the “primary measure of consumer spending on goods and services” by private individuals and nonprofit organizations.
  • GPDI is a measure of private spending on “structures, equipment, and intellectual property products.”

Since education is not a service that is typically imported or exported, a valid approximation of private spending on education can be arrived at by summing PCE and GPDI. The fourth footnote below details the data used in this calculation.

[43] Report: “Fiscal Year 2013 Analytical Perspectives, Budget of the U.S. Government.” White House Office of Management and Budget, February 12, 2012. <www.gpo.gov>

Page 471:

The main purpose of the NIPAs [national income and product accounts published by the U.S. Bureau of Economic Analysis] is to measure the Nation’s total production of goods and services, known as gross domestic product (GDP), and the incomes generated in its production. GDP excludes intermediate production to avoid double counting. Government consumption expenditures along with government gross investment—State and local as well as Federal—are included in GDP as part of final output, together with personal consumption expenditures, gross private domestic investment, and net exports of goods and services (exports minus imports).

[44] Report: “Concepts and Methods of the U.S. National Income and Product Accounts, Chapter 5: Personal Consumption Expenditures.” U.S. Bureau of Economic Analysis. Updated November 2017. <www.bea.gov>

Page 5-1:

Personal consumption expenditures (PCE) is the primary measure of consumer spending on goods and services in the U.S. economy.1 It accounts for about two-thirds of domestic final spending, and thus it is the primary engine that drives future economic growth. PCE shows how much of the income earned by households is being spent on current consumption as opposed to how much is being saved for future consumption.

PCE also provides a comprehensive measure of types of goods and services that are purchased by households. Thus, for example, it shows the portion of spending that is accounted for by discretionary items, such as motor vehicles, or the adjustments that consumers make to changes in prices, such as a sharp run-up in gasoline prices.2

Page 5-2:

PCE measures the goods and services purchased by “persons”—that is, by households and by nonprofit institutions serving households (NPISHs)—who are resident in the United States. Persons resident in the United States are those who are physically located in the United States and who have resided, or expect to reside, in this country for 1 year or more. PCE also includes purchases by U.S. government civilian and military personnel stationed abroad, regardless of the duration of their assignments, and by U.S. residents who are traveling or working abroad for 1 year or less.

Page 5-67:

Nonprofit Institutions Serving Households

In the NIPAs [National Income and Product Accounts], nonprofit institutions serving households (NPISHs), which have tax-exempt status, are treated as part of the personal sector of the economy. Because NPISHs produce services that are not generally sold at market prices, the value of these services is measured as the costs incurred in producing them.

In PCE, the value of a household purchase of a service that is provided by a NPISH consists of the price paid by the household or on behalf of the household for that service plus the value added by the NPISH that is not included in the price. For example, the value of the educational services provided to a student by a university consists of the tuition fee paid by the household to the university and of the additional services that are funded by sources other than tuition fees (such as by the returns to an endowment fund).

[45] Report: “Measuring the Economy: A Primer on GDP and the National Income and Product Accounts.” U.S. Bureau of Economic Analysis, December 2015. <www.bea.gov>

Page 8: “Gross private domestic investment consists of purchases of fixed assets (structures, equipment, and intellectual property products) by private businesses that contribute to production and have a useful life of more than one year, of purchases of homes by households, and of private business investment in inventories.”

[46] Calculated with data from:

a) Dataset: “Table 2.4.5U. Personal Consumption Expenditures by Type of Product.” U.S. Bureau of Economic Analysis. Last revised January 27, 2022. <apps.bea.gov>

b) Dataset: “Table 1.1.5. Gross Domestic Product.” U.S. Bureau of Economic Analysis. Last revised January 27, 2022. <www.bea.gov>

c) Dataset: “HH-1. Households by Type: 1940 to Present (Numbers in Thousands).” U.S. Census Bureau, Current Population Survey, November 2021. <www.census.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[47] Calculated with the dataset: “Table 2.4.5U. Personal Consumption Expenditures by Type of Product.” U.S. Bureau of Economic Analysis. Last revised January 27, 2022. <apps.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[48] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Accessed April 19, 2022 at <www.census.gov>

“Both Sexes, 25 to 64 Years, Total Work Experience, All Races” <www2.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[49] Report: “Income and Poverty in the United States: 2020.” By Emily Shrider and others. U.S. Census Bureau, September 14, 2021. <www.census.gov>

Page 22: “The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as those provided by the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, public housing, employer-provided fringe benefits, tax credits, or stimulus payments.”

Page 25:

Data on income collected in the ASEC [Current Population Survey Annual Social and Economic Supplements] by the U.S. Census Bureau cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Money income also excludes tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and special COVID-19-related stimulus payments. Money income does not reflect that some families receive noncash benefits such as Supplemental Nutrition Assistance/food stamps, health benefits, and subsidized housing. In addition, money income does not reflect that noncash benefits often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries more accurately than other sources of income, and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.

[50] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Accessed April 19, 2022 at <www.census.gov>

“Both Sexes, 25 to 64 Years, Total Work Experience, All Races” <www2.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[51] Dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Accessed April 19, 2022 at <www.census.gov>

“Both Sexes, 25 to 64 Years, Total Work Experience, All Races” <www2.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[52] Report: “Key Concepts and Features of the 2003 National Assessment of Adult Literacy.” By Sheida White and Sally Dillow. U.S. Department of Education, National Center for Education Statistics, December 2005. <nces.ed.gov>

Page 3:

NAAL [National Assessment of Adult Literacy] Measures How Well U.S. Adults Perform Tasks with Printed Materials

As a part of their everyday lives, adults in the United States interact with a variety of printed and other written materials to perform a multitude of tasks. A comprehensive list of such tasks would be virtually endless. It would include such activities as balancing a checkbook, following directions on a prescription medicine bottle, filling out a job application, consulting a bus schedule, correctly interpreting a chart in the newspaper, and using written instructions to operate a voting machine. …

Literacy is not a single skill or quality that one either possesses or lacks. Rather, it encompasses various types of skills that different individuals possess to varying degrees. There are different levels and types of literacy, which reflect the ability to perform a wide variety of tasks using written materials that differ in nature and complexity. A common thread across all literacy tasks is that each has a purpose—whether that purpose is to pay the telephone bill or to understand a piece of poetry. All U.S. adults must successfully perform literacy tasks in order to adequately function—that is, to meet personal and employment goals as well as contribute to the community.

[53] Webpage: “What PIAAC Is.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <nces.ed.gov>

The Program for the International Assessment of Adult Competencies (PIAAC) is an international study for measuring, analyzing, and comparing adults’ basic skills of literacy, numeracy, and digital problem solving. The assessment focuses on the basic cognitive and workplace skills needed for individuals to participate in society and for economies to prosper. Data from PIAAC is meant to help countries better understand their education and training systems and the distribution of these basic skills across the adult working-age population.

Developed by the Organization for Economic Cooperation and Development (OECD), PIAAC is intended to be administered at least once a decade. PIAAC was first conducted in 2011 and the same survey instruments were administered twice more through 2017. In total, 39 countries participated in PIAAC in Cycle I (2011–17). Cycle II of PIAAC, with revised survey instruments, will begin in 2022, with 33 countries scheduled to participate in the first round of administration.

[54] Report: “Highlights of PIACC 2017 U.S. Results.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <nces.ed.gov>

The Program for the International Assessment of Adult Competencies (PIACC) is a cyclical, large-scale study of adult cognitive skills and life experiences developed by the Organization for Economic Cooperation and Development (OECD) and, in the United States, conducted by the National Center for Education Statistics (NCES). …

In 2017, the third round of PIACC data collection in the United States took place. The results of the first round of U.S. PIACC data collection in 2012 and the second round of data collection in 2014 (officially known as the National Supplement to the Main Study) are combined, by design, into one data point for 2012/14.

[55] Webpage: “Frequently Asked Questions.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <nces.ed.gov>

Countries that participate in PIAAC [Program for the International Assessment of Adult Competencies] must draw a sample of individuals ages 16–65 that represents the entire population of adults living in households in the country. … In the United States, a nationally representative household sample was drawn from the most current Census Bureau population estimates. …

The results from the National Adult Literacy Survey (NALS), International Adult Literacy Survey (IALS) and the Adult Literacy and Lifeskills Survey (ALL) have been rescaled to match the statistical models used in creating PIAAC scores for literacy and, in the case of ALL, numeracy. Rescaling was possible because PIAAC repeated a sufficient number of the same test questions used in NALS, IALS, and ALL. Rescaled plausible values for literacy for IALS and ALL and numeracy for ALL, along with some trend background questionnaire items, allow for trend analysis with the U.S. PIAAC results along an international trend line. Separately, the rescaled plausible values for literacy for NALS, along with some trend background questionnaire items, allow for trend analysis with the U.S. PIAAC results along a national trend line.

The results from the National Assessment for Adult Literacy (NAAL) were not rescaled to match the model used in creating PIAAC scores. For various reasons, including that there is no overlap between NAAL and PIAAC literacy items, NAAL and PIAAC are thought to be the least comparable of the adult literacy assessments (or practically, not comparable) in terms of literacy items.

[56] E-mail from U.S. Department of Education to Just Facts on February 11, 2022:

Unfortunately, we do not have a straightforward examples of items with the percentage of respondents answering correctly. …

The actual items used to assess literacy, numeracy, and problem solving in technology-rich environments (PS-TRE) in PIAAC [Program for the International Assessment of Adult Competencies] are not released to public. Most of the assessment items are being preserved for possible use for trend purposes in future assessments. …

One could potentially use the U.S. data files to calculate the percentage who received the item and who answered it correctly, as there are variables for scored responses to each item. However … PIAAC (2012/2014 and 2017) is available in two modes; paper-and-pencil-based assessment (PBA) and computer-based assessment (CBA), meaning that some items would have both a paper and computer-based version. In addition, the computer-based PIAAC assessment used an adaptive design, meaning that respondents were directed to a set of easier or more difficult items based on their answers to the … core questions (as well as their performance in the CBA Module as they advance through the assessment). This adds complexity to interpreting the percent who answered correctly, as the sample of adults receiving the item is not random or representative and is influenced by respondents’ skill levels.

[57] Report: “Sample PIAAC Tasks in Literacy, Numeracy, and Problem Solving in Technology-Rich Environments.” Prepared by American Institutes for Research for U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <piaacgateway.com>

Page 27: “Numeracy Item: Level 2 … Beauchamp Manufacturing”

[58] Webpage: “What PIAAC Measures.” U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <nces.ed.gov>

Numeracy Proficiency Levels

In PIAAC [Program for the International Assessment of Adult Competencies], results are reported as averages on a 500-point scale or as proficiency levels. Proficiency refers to competence that involves “mastery” of a set of abilities along a continuum that ranges from simple to complex information-processing tasks.

This continuum has been divided into five levels of proficiency. Each level is defined by a particular score-point range associated with competence at specific information-processing tasks. Adults with literacy scores within the score-point range for a particular proficiency level are likely to successfully complete the tasks at that proficiency level as well as any lower proficiency levels. Adults with scores at a particular proficiency level might be able to complete a task at a higher proficiency level but the probability is small and diminishes greatly the higher the level. …

Level 2

226–275 points

Tasks at this level require the respondent to identify and act on mathematical information and ideas embedded in a range of common contexts where the mathematical content is fairly explicit or visual with relatively few distractors. Tasks tend to require the application of two or more steps or processes involving calculations with whole numbers and common decimals, percentages, and fractions; simple measurement and spatial representation; estimation; or interpretation of relatively simple data and statistics in texts, tables, and graphs. …

In general, this means that tasks located at a particular proficiency level can be successfully completed by the “average” person at that level approximately two-thirds of the time. However, individuals scoring at the bottom of the level would successfully complete tasks at that level only about half the time while individuals scoring at the top of the level would successfully complete tasks at that level about 80 percent of the time.

[59] Calculated with data from the webpage: “PIAAC [Program for the International Assessment of Adult Competencies] Data Explorer.” U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <nces.ed.gov>

Percentages for U.S. Adults, 16–74 (Household and Prison) PIAAC numeracy: overall scale, by PIAAC Numeracy proficiency levels [BMNUM] and jurisdiction: PIAAC 2012–2017 and PIAAC 2017 … PIAAC 2017 … U.S. Household (16–65 years old) … Percentage … Below Level 1 [=] 9% … Level 1 [=] 20% … Level 2 [=] 33% … Level 3 [=] 27% … Level 4 [=] 9% … Level 5 [=] 1%

CALCULATION: 33% + 27% + 9% + 1% = 70% at Level 2 or higher

[60] Report: “Sample PIAAC Tasks in Literacy, Numeracy, and Problem Solving in Technology-Rich Environments.” Prepared by American Institutes for Research for U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <piaacgateway.com>

Page 32: “Numeracy Item: Level 3 … Running Shoes”

[61] Webpage: “What PIAAC Measures.” U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <nces.ed.gov>

Numeracy Proficiency Levels

In PIAAC [Program for the International Assessment of Adult Competencies], results are reported as averages on a 500-point scale or as proficiency levels. Proficiency refers to competence that involves “mastery” of a set of abilities along a continuum that ranges from simple to complex information-processing tasks.

This continuum has been divided into five levels of proficiency. Each level is defined by a particular score-point range associated with competence at specific information-processing tasks. Adults with literacy scores within the score-point range for a particular proficiency level are likely to successfully complete the tasks at that proficiency level as well as any lower proficiency levels. Adults with scores at a particular proficiency level might be able to complete a task at a higher proficiency level but the probability is small and diminishes greatly the higher the level. …

Level 3

276–325 points

Tasks at this level require the respondent to understand mathematical information that may be less explicit, embedded in contexts that are not always familiar, and represented in more complex ways. Tasks require several steps and may involve the choice of problem-solving strategies and relevant processes. Tasks tend to require the application of number sense and spatial sense; recognizing and working with mathematical relationships, patterns, and proportions expressed in verbal or numerical form; or interpretation and basic analysis of data and statistics in texts, tables, and graphs. …

In general, this means that tasks located at a particular proficiency level can be successfully completed by the “average” person at that level approximately two-thirds of the time. However, individuals scoring at the bottom of the level would successfully complete tasks at that level only about half the time while individuals scoring at the top of the level would successfully complete tasks at that level about 80 percent of the time.

[62] Report: “Highlights of PIACC 2017 U.S. Results.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <nces.ed.gov>

“Figure 1-B. Percentage Distribution of U.S. Adults Age 16 to 65 at Selected Levels of Proficiency on PIAAC Literacy, Numeracy, and Digital Problem Solving: 2012/14 and 2017 … Numeracy … 2017 … Level 3 or above [=] 37%”

[63] Report: “Sample PIAAC Tasks in Literacy, Numeracy, and Problem Solving in Technology-Rich Environments.” Prepared by American Institutes for Research for U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <piaacgateway.com>

Page 37: “Numeracy Item: Level 4”

[64] Webpage: “What PIAAC Measures.” U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <nces.ed.gov>

Numeracy Proficiency Levels

In PIAAC [Program for the International Assessment of Adult Competencies], results are reported as averages on a 500-point scale or as proficiency levels. Proficiency refers to competence that involves “mastery” of a set of abilities along a continuum that ranges from simple to complex information-processing tasks.

This continuum has been divided into five levels of proficiency. Each level is defined by a particular score-point range associated with competence at specific information-processing tasks. Adults with literacy scores within the score-point range for a particular proficiency level are likely to successfully complete the tasks at that proficiency level as well as any lower proficiency levels. Adults with scores at a particular proficiency level might be able to complete a task at a higher proficiency level but the probability is small and diminishes greatly the higher the level. …

Level 4

326–375 points

Tasks at this level require the respondent to understand a broad range of mathematical information that may be complex, abstract, or embedded in unfamiliar contexts. These tasks involve undertaking multiple steps and choosing relevant problem-solving strategies and processes. Tasks tend to require analysis and more complex reasoning about quantities and data; statistics and chance; spatial relationships; or change, proportions, and formulas. Tasks at this level may also require understanding arguments or communicating well-reasoned explanations for answers or choices. …

In general, this means that tasks located at a particular proficiency level can be successfully completed by the “average” person at that level approximately two-thirds of the time. However, individuals scoring at the bottom of the level would successfully complete tasks at that level only about half the time while individuals scoring at the top of the level would successfully complete tasks at that level about 80 percent of the time.

[65] Calculated with data from the webpage: “PIAAC [Program for the International Assessment of Adult Competencies] Data Explorer.” U.S. Department of Education, National Center for Education Statistics. Accessed March 23, 2022 at <nces.ed.gov>

Percentages for U.S. Adults, 16–74 (Household and Prison) PIAAC numeracy: overall scale, by PIAAC Numeracy proficiency levels [BMNUM] and jurisdiction: PIAAC 2012–2017 and PIAAC 2017 … PIAAC 2017 … U.S. Household (16–65 years old) … Percentage … Below Level 1 [=] 9% … Level 1 [=] 20% … Level 2 [=] 33% … Level 3 [=] 27% … Level 4 [=] 9% … Level 5 [=] 1%

CALCULATION: 9% + 1% = 10% at Level 4 or higher

[66] Report: “Key Concepts and Features of the 2003 National Assessment of Adult Literacy.” By Sheida White and Sally Dillow. U.S. Department of Education, Institute of Education Sciences, December 2005. <nces.ed.gov>

Page 1: “Sponsored by the National Center for Education Statistics (NCES) in the U.S. Department of Education’s Institute of Education Sciences, the 2003 National Assessment of Adult Literacy (NAAL) is a nationally representative assessment of literacy among adults (age 16 and older) residing in households and prisons in the United States.”

Page 3:

The National Assessment of Adult Literacy (NAAL) measures the ability of a nationally representative sample of adults to perform literacy tasks similar to those that they encounter in their daily lives. Statistical procedures ensure that NAAL participants represent the entire population of U.S. adults who are age 16 and older and live in households or prisons. In 2003, the 19,714 adults who participated in NAAL represented a U.S. adult population of about 222 million. …

Like other adults, NAAL participants bring to literacy tasks a full range of backgrounds, experiences, and skill levels. Like real-life tasks, NAAL tasks vary with respect to the difficulty of the materials used as well as the complexity of the actions to be performed. However, in order to be fair to all participants, none of the tasks require specialized background knowledge, and all of them were reviewed for bias against particular groups. …

NAAL tasks reflect a definition of literacy that emphasizes the use of written materials to function adequately in one’s environment and to develop as an individual. Of course, the actual literacy tasks that individuals must perform in their daily lives vary to some extent depending on the nature of their work and personal goals. However, virtually all literacy tasks require certain underlying skills, such as the ability to read and understand common words. NAAL measures adults’ performance on a range of tasks mimicking actual tasks encountered by adults in the United States. Adults with very low levels of performance on NAAL tasks may be unable to function adequately in 21st century America.

Page 4:

NAAL Examines Three Literacy Areas—Prose, Document, and Quantitative

NAAL reports a separate score for each of three literacy areas:

Prose literacy refers to the knowledge and skills needed to perform prose tasks—that is, to search, comprehend, and use continuous texts. Prose examples include editorials, news stories, brochures, and instructional materials.

Document literacy refers to the knowledge and skills needed to perform document tasks—that is, to search, comprehend, and use noncontinuous texts in various formats. Document examples include job applications, payroll forms, transportation schedules, maps, tables, and drug or food labels.

Quantitative literacy refers to the knowledge and skills required to perform quantitative tasks—that is, to identify and perform computations, either alone or sequentially, using numbers embedded in printed materials. Examples include balancing a checkbook, computing a tip, completing an order form, or determining the amount of interest on a loan from an advertisement.

Pages 13–14:

In addition to the four performance levels that were developed using the bookmark method, the Committee on Performance Levels for Adult Literacy also recommended that NCES report on a fifth category—Nonliterate in English. This category includes two groups of adults:

• Two percent of the adults who were selected to participate in the 2003 NAAL could not be tested—in other words, could not participate in NAAL at all—because they knew neither English nor Spanish (the other language spoken by interviewers in most areas). The Nonliterate in English category includes these adults because their inability to communicate in English indicates a lack of English literacy skills.

• Three percent of the adults who were tested in 2003 did not take the main part of the assessment, which was too difficult for them, but did take an alternative assessment specifically designed for the least-literate adults. Questions on the alternative assessment were asked in either English or Spanish, but all written materials were in English only. While some adults in this group displayed minimal English literacy skills (for example, the ability to identify a letter or a common word in a simple text), others lacked such skills entirely. (For example, an adult who was able to attempt the alternative assessment by following oral Spanish instructions might still prove unable to do even the minimal amount of English reading needed to provide any correct answers.) The Nonliterate in English category includes these adults because their English literacy skills are minimal at best.

In 2003, the two groups of adults classified as Nonliterate in English—the 2 percent who could not be tested because of a language barrier (i.e., inability to communicate in English or Spanish) and the 3 percent who took the alternative assessment—accounted for 11 million adults, or 5 percent of the population. These adults range from having no English literacy skills to being able to “recognize some letters, numbers, or common sight words in everyday contexts” (Hauser and others 2005).

Page 32: “Because NAAL is designed to assess literacy in English, all the written instructions and responses are in English.”

[67] Webpage: “National Assessment of Adult Literacy, Sample Questions Search: 1985, 1992 & 2003.” U.S. Department of Education, National Center for Education Statistics. Accessed July 19, 2015 at <nces.ed.gov>

“Item Number: N120601 … Scale: Document Literacy … Task Demand: Text Search … Percent who answered correctly: 82.0%”

[68] Webpage: “National Assessment of Adult Literacy, Sample Questions Search: 1985, 1992 & 2003.” U.S. Department of Education, National Center for Education Statistics. Accessed July 19, 2015 at <nces.ed.gov>

“Item Number: C080101 … Scale: Quantitative Literacy … Task Demand: Computation, Text Search … Percent who answered correctly: 59.6%”

[69] Webpage: “National Assessment of Adult Literacy, Sample Questions Search: 1985, 1992 & 2003.” U.S. Department of Education, National Center for Education Statistics. Accessed July 19, 2015 at <nces.ed.gov>

“Item Number: N130901 … Quantitative Literacy: XX … Task Demand: Computation, Text Search … Percent who answered correctly: 45.8%”

[70] Webpage: “National Assessment of Adult Literacy, Sample Questions Search: 1985, 1992 & 2003.” U.S. Department of Education, National Center for Education Statistics. Accessed July 19, 2015 at <nces.ed.gov>

“Item Number: N091001 … Scale: Quantitative Literacy … Task Demand: Computation, Text Search … Percent who answered correctly: 17.6%”

[71] Webpage: “National Assessment of Adult Literacy, Sample Questions Search: 1985, 1992 & 2003.” U.S. Department of Education, National Center for Education Statistics. Accessed July 19, 2015 at <nces.ed.gov>

“Item Number: N100701 … Scale: Document Literacy … Task Demand: Application, Inferential, Text Search … Percent who answered correctly: 10.6%”

[72] Book: Productivity Management: A Practical Handbook. By Joseph Prokopenko. International Labour Office, 1987.

Page 242:

Pre-Employment Education

There are two main goals of pre-employment education: to create productivity awareness and to prepare youth for productive work by teaching the necessary knowledge and skills. Unfortunately, too much attention is paid to developing formal knowledge and too little to practical skills.

For example British industrialists have long been complaining that business and management education in the United Kingdom is oriented towards teaching how to trade and how to invest, rather than how to add new value.

Some prestigious educational institutions place too much emphasis on purely academic matters instead of teaching people how to manage factories and shop-floor production. Too much emphasis is still placed on management sciences and research instead of on preparing creative entrepreneurs capable of innovating, and of organising and managing work. Under such a system, it is quite normal that the most gifted go on to academic studies, and the less gifted are forced to work in industry.

A change of emphasis from a knowledge-based or academic system of education (both secondary and higher) to one based on problem-solving and the completion of concrete tasks would result in an improvement in the productivity culture.

[73] Book: Youth Unemployment in the North: Young People on the Labour Market – Actions to Combat Unemployment. Nordic Council of Ministers, 1987.

Page 190:

General secondary education is oriented towards higher education. As a rule, secondary schools do not equip school leavers with any practical skills that would enable them to get a job. Young people receive a good general education from secondary school but their business and financial skills are mostly insufficient. Moreover, they are not prepared for entering into a competitive labour market.

[74] Article: “Mann, Horace.” Encyclopædia Britannica Ultimate Reference Suite 2004.

U.S. educator, the first great American advocate of public education, who believed that, in a democratic society, education should be free and universal, nonsectarian, democratic in method, and reliant on well-trained, professional teachers. …

… He started a biweekly Common School Journal for teachers and lectured widely to interested groups of citizens. His annual reports to the board ranged far and wide through the field of pedagogy, stating the case for the public school and discussing its problems. Essentially his message centred on six fundamental propositions:

(1) that a republic cannot long remain ignorant and free, hence the necessity of universal popular education;

(2) that such education must be paid for, controlled, and sustained by an interested public;

(3) that such education is best provided in schools embracing children of all religious, social, and ethnic backgrounds;

(4) that such education, while profoundly moral in character, must be free of sectarian religious influence;

(5) that such education must be permeated throughout by the spirit, methods, and discipline of a free society, which preclude harsh pedagogy in the classroom; and

(6) that such education can be provided only by well-trained, professional teachers.

Mann encountered strong resistance to these ideas—from clergymen who deplored nonsectarian schools, from educators who condemned his pedagogy as subversive of classroom authority, and from politicians who opposed the board as an improper infringement of local educational authority—but his views prevailed.

[75] Webpage: “Horace Mann.” PBS. Accessed July 9, 2015 at <www.pbs.org>

Horace Mann, often called the Father of the Common School, began his career as a lawyer and legislator. … He spearheaded the Common School Movement, ensuring that every child could receive a basic education funded by local taxes. His influence soon spread beyond Massachusetts as more states took up the idea of universal schooling. …

… These developments were all part of Mann’s driving determination to create a system of effective, secular, universal education in the United States.

[76] The Common School Journal for the Year 1841 (Volume III). Edited by Horace Mann (Secretary of the Massachusetts Board of Education). Marsh, Capen, Lyon, and Webb, 1841.

Page 15:

Conclusion.

The tendency of the preceding remarks must be obvious, and therefore our application of them may be brief.

In the first place, if there must be institutions, associations, combinations amongst men, whose tendency is to alienation and discord; to whet the angry feelings of individuals against each other; to transmit the contentions of the old to the young, and to make the enmities of the dead survive to the living;—if these things must continue to be, in a land calling itself Christian;—let there be one institution, at least, which shall be sacred from the ravages of the spirit of party,—one spot, in the wide land, unblasted by the fiery breath of animosity. Amid unions for aggression, let there be one rallying point for a peaceful and harmonious cooperation and fellowship, where all the good may join, in the most beneficent of labors. The young do not come into life, barbed and fanged against each other. A blow is never the salutation which two infants give, on meeting for the first time. By a proper training, the kindly feelings may be kept uppermost. Those powers may be cultivated, which have the double blessing of bestowing happiness on the possessor and on the race. The Common School is the institution which can receive and train up children in the elements of all good knowledge, and of virtue, before they are subjected to the alienating competitions of life. This institution is the greatest discovery ever made by man;—we repeat it, the Common School is the greatest discovery ever made by man. In two grand, characteristic attributes, it is supereminent over all others:—first, in its universality;—for it is capacious enough to receive and cherish in its parental bosom every child that comes into the world; and second, in the timeliness of the aid it proffers;—its early, seasonable supplies of counsel and guidance making security antedate danger. Other social organizations are curative and remedial; this is a preventive and an antidote; they come to heal diseases and wounds; this to make the physical and moral frame invulnerable to them. Let the Common School be expanded to its capabilities, let it be worked with the efficiency of which it is susceptible, and nine tenths of the crimes in the penal code would become obsolete; the long catalogue of human ills would be abridged; men would walk more safely by day; every pillow would be more inviolable by night; property, life, and character held by a stronger tenure; all rational hopes respecting the future brightened.

[77] Book: Life of Horace Mann (Volume 1). By Mary Tyler Peabody Mann (Horace Mann’s wife). Walker, Fuller, and Company, 1865.

Pages 141–142:

Dec. 20. Have been engaged mainly this week with a long article for the first number of the third volume of the “Common-school Journal.” …

In this introduction, Mr. Mann shows how forcibly his mind had been led, by the “wild roar of party politics” of that year, to look into the secret springs of public action; and how futile is the attempt to “define truth by law, and to perpetuate it by power and wealth, instead of knowledge.” He closes it in these words, which apply equally to our own times: …

… The common school is the institution which can receive and train up children in the elements of all good knowledge and of virtue before they are subjected to the alienating competitions of life. This institution is the greatest discovery ever made by man: we repeat it, the common school is the greatest discovery ever made by man. … Let the common school be expanded to its capabilities, let it be worked with the efficiency of which it is susceptible, and nine-tenths of the crimes in the penal code would become obsolete; the long catalogue of human ills would be abridged; men would walk more safely by day; every pillow would be more inviolable by night; property, life, and character held by a stronger tenure; all rational hopes respecting the future brightened.

[78] Article: “Most U.S. Youths Unfit to Serve, Data Show.” By William H. McMichael. Army Times, November 3, 2009. <www.armytimes.com>

In a study being released Thursday in Washington, Education Secretary Arne Duncan and a group of retired military officers led by former Army Gen. Wesley Clark will sound the alarm bells and call young Americans’ relative lack of overall fitness for military duty a national security threat. The group, Mission: Readiness, will release a report that draws on Pentagon data showing that 75 percent of the nation’s 17- to 24-year-olds are ineligible for service for a variety of reasons.

Put another way, only 4.7 million of the 31.2 million 17- to 24-year-olds in a 2007 survey are eligible to enlist, according to a periodic survey commissioned by the Pentagon. This group includes those who have scored in the top four categories on the Armed Forces Qualification Test, or AQFT; eligible college graduates; and qualified college students.

According to the Pentagon, the ineligible population breaks down this way:

* Medical/physical problems, 35 percent.

* Illegal drug use, 18 percent.

* Mental Category V (the lowest 10 percent of the population), 9 percent.

* Too many dependents under age 18, 6 percent.

* Criminal record, 5 percent.

[79] Calculated with data from the report: “2013 Qualified Military Available (QMA) Results Summary.” Department of Defense, Joint Advertising Market Research & Studies, 2013. <www.justfacts.com>

Pages 1–2:

The Department of Defense (DoD) 2013 Qualified Military Available (QMA) Study examined the number of youth eligible and available for military service. This number is an important indicator used by the Department of Defense (DoD) to plan recruiting policy and programs. The basic ingredient of this metric is the size of the population aged 17–24, reduced by the number who are disqualified or unavailable for military service. The 2013 QMA Study revised and updated previous QMA estimations by using more recent data to estimate the prevalence of disqualifying conditions and by accounting for the correlations of disqualifying conditions that account for overlap among multiple disqualifiers.

The 2013 QMA project used the most recent data from the following sources:

• National Health and Nutrition Examination Survey (NHANES)

• National Survey on Drug Use and Health (NSDUH)

• Joint Advertising Market Research & Studies Youth Poll Survey (JAMRS-YP)

• MEPCOM Production Applicant AFQT score database (MEPCOM)

• Woods & Poole Population Estimates

• 1997 Profile of American Youth (PAY97)1

Methodology & Results Summary

After reviewing the particular guidelines established by DoD Instructions 1304.26, “Qualification Standards for Enlistment, Appointment, and Induction and 6130.03, Medical Standards for Appointment, Enlistment, or Induction in the Military Services,” which govern military entrance eligibility criteria, disqualifying conditions were grouped into seven broad disqualification categories: medical/physical, overweight, mental health, drugs, conduct, dependents and aptitude. Disqualification estimates were derived for each of the seven disqualification categories based on data obtained from the sources cited above. Next, a Multivariate Probit Model (MVP) was used to estimate the overlap between disqualifying conditions. This is an accepted method for analyzing binary outcomes that are “seemingly unrelated.” After probabilities of disqualifying on each of the conditions and the overlap were calculated, the probabilities were applied to the Woods & Poole population counts to obtain ZIP Code level estimates.

According to the analysis, only 28.6% of the youth population is estimated to be qualified to enlist in the Military without a waiver. Additionally, the 2013 QMA Study estimated that only 17% of youth would qualify without a waiver and be available, not enrolled in college, for enlisted Active Duty Military service. In practice, the Services typical deny enlistment to youth who score in the bottom 30th percentile (i.e., category IV and V) on the Armed Forces Qualification Test (AFQT). Incorporating this criterion, only 13% of youth would qualify without a waiver, be available for full-time enlisted Military service, and score above the 30th percentile on the AFQT test. Disqualification rates for each of the 7 overarching disqualification categories are as follows:

1. Medical/Physical = 30% disqualified

2. Overweight = 31% disqualified

3. Mental Health = 15% disqualified

4. Drugs = 30% disqualified

5. Conduct = 10% disqualified

6. Dependents = 12% disqualified

7. Aptitude = 9% disqualified

* Note. These percentages represent the proportion of youth 17–24 who are estimated to have an issue in each category that would disqualify an applicant. Percentages sum to greater than 100% as many youth are predicted to demonstrate more than one issue.

Furthermore, results from the 2013 QMA Study demonstrated that the majority of youth who would be disqualified for military service would be disqualified for more than one reason. In all, 39% of all youth are predicted to be disqualified from enlisting in the Military for more than one issue (not including college enrollment as a condition). The five most common categories of multiple disqualifications are as follows:

1. Medical/physical & overweight

2. Medical/physical & drugs

3. Drugs & overweight

4. Medical/physical & mental health

5. Medical/physical, drugs, & mental health

1 The AFQT test was normed based on results from this study which established youth population scores for the AFQT test.

CACULATION: 100% – 28.6% qualified = 71.4% unqualified

[80] Article: “Army: 77% of Young Americans Now Unfit to Serve.” By Kevin Haraldson. News Radio 1200 WOIA (San Antonio, TX), January 5, 2014. <www.woai.com>

The commander of the U.S. Army Recruiting Command tells 1200 WOAI news that more than three quarters of all of the 17 to 24 year old men and women in America are currently not eligible for enlistment in the Army, mainly because they are overweight.

“The latest figures we have is 77.5% are disqualified for one reason or another,” Maj. Gen. Allen Batschelet said in an interview. “That means just 22.5% would be qualified.”

He said prospective recruits disqualify themselves for three main reasons. One is what the Army refers to as “morally disqualified,” meaning they have used or are using illegal drugs or have a criminal record. Number two are “cognitive disqualifications,” meaning they are not educated enough to pass the Army entrance exam. But the third, and the most widespread, are physical disqualifications, which are mainly due to being overweight.

[81] Paper: “The Importance of Noncognitive Skills: Lessons from the GED Testing Program.” By James J. Heckman and Yona Rubinstein. American Economic Review, May, 2001. Pages 145–149. <www.researchgate.net>

Page 145:

It is common knowledge outside of academic journals that motivation, tenacity, trustworthiness, and perseverance are important traits for success in life. … Numerous instances can be cited of high-IQ people who failed to achieve success in life because they lacked self discipline and low-IQ people who succeeded by virtue of persistence, reliability, and self-discipline. The value of trustworthiness has recently been demonstrated when market systems were extended to Eastern European societies with traditions of corruption and deceit.

It is thus surprising that academic discussions of skill and skill formation almost exclusively focus on measures of cognitive ability and ignore noncognitive skills. … Most assessments of school reforms stress the gain from reforms as measured by the ability of students to perform on a standardized achievement test. …

Studies by Samuel Bowles and Herbert Gintis (1976), Rick Edwards (1976), and Roger Klein and others (1991) demonstrate that job stability and dependability are traits most valued by employers as ascertained by supervisor ratings and questions of employers….

Page 146:

The GED [General Educational Development] is a mixed signal. Dropouts who take the GED are smarter (have higher cognitive skills) than other high-school dropouts and yet at the same time have lower levels of noncognitive skills. Both types of skill are valued in the market and affect schooling choices. Our finding challenges the conventional signaling literature, which assumes a single skill. It also demonstrates the folly of a psychometrically oriented educational evaluation policy that assumes cognitive skills to be all that matter. Inadvertently, a test has been created that separates out bright but nonpersistent and undisciplined dropouts from other dropouts. It is, then, no surprise that GED recipients are the ones who drop out of school, fail to complete college (Stephen Cameron and James Heckman, 1993) and who fail to persist in the military (Janice Laurence, 2000). GED’s are “wiseguys,” who lack the abilities to think ahead, to persist in tasks, or to adapt to their environments. The performance of the GED recipients compared to both high-school dropouts of the same ability and high-school graduates demonstrates the importance of noncognitive skills in economic life.

[82] Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

Expenditure per pupil in fall enrollment1 … Total expenditure3 … 2018–19 … Unadjusted dollars1 [=] 15,034 … Constant 2020–21 dollars3 [=] 15,621 …

1 Unadjusted (or “current”) dollars have not been adjusted to compensate for inflation. …

3 Excludes “Other current expenditures,” such as community services, private school programs, adult education, and other programs not allocable to expenditures per student at public schools.

[83] Report: “Documentation to the NCES Common Core of Data Public Elementary/Secondary School Universe Survey: School Year 2010–11, Version Provisional 2a.” U.S. Department of Education, National Center for Education Statistics, September 2012. <nces.ed.gov>

Page C-6: “Elementary A general level of instruction classified by state and local practice as elementary, composed of any span of grades not above grade 8; preschool or kindergarten included only if it is an integral part of an elementary school or a regularly established school system.”

Page C-14: “Secondary The general level of instruction classified by state and local practice as secondary and composed of any span of grades beginning with the next grade following the elementary grades and ending with or below grade 12.”

[84] Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

“NOTE: … Beginning in 1980–81, state administration expenditures are excluded from both ‘total’ and ‘current’ expenditures.”

[85] The next seven footnotes document that:

  • National Center for Education Statistics data on education spending does not account for unfunded pension or healthcare benefits.
  • “Defined benefit” pension programs guarantee employees specified levels of benefits, regardless of how much money the employer has previously set aside to pay those benefits.
  • Most government employees receive defined benefit pensions.
  • Many government pension plans are underfunded.

[86] Email from the U.S. Department of Education, National Center for Education Statistics to Just Facts, March 31, 2015.

“The expenditures reported [in Table 213 and elsewhere by the National Center for Education Statistics] do not include or account for unfunded pension benefits or unfunded healthcare benefits.”

[87] Report: “Documentation for the NCES Common Core of Data National Public Education Financial Survey (NPEFS), School Year 2010–11 (Fiscal Year 2011), Preliminary File Version 1a.” U.S. Department of Education, National Center for Education Statistics, December 2013. <nces.ed.gov>

Pages 5–6:

NPEFS [National Public Education Finance Survey] collects employee benefits for the functions of instruction, support services, and operation of noninstructional services. NPEFS respondents are currently reporting employee benefits, which are defined as the “Amounts paid by the school district on behalf of employees (amounts not included in gross salary but in addition to that amount). Such payments are fringe benefits payments and although not directly paid to employees, nevertheless are part of the cost of personal services.”13 The definition of employee benefits is derived from the NCES school finance accounting handbook, Financial Accounting for Local and State School Systems: 2009 Edition (Allison, Honegger, and Johnson 2009). NPEFS does not collect actuarially determined annual required contributions;14 accrued annual requirement contribution liability;15 or the actuarial value of pension plan assets.16

13 The NPEFS instruction manual provides that employee benefits “include amounts paid by, or on behalf of, an LEA [Local Education Agency] for fringe benefits such as group insurance (including health benefits for current and retired employees), social security contributions, retirement contributions, tuition reimbursements, unemployment compensation, worker’s compensation, and other benefits such as unused sick leave (NCES, 2012).

14 Actuarially determined annual required contributions are the annual required contribution (ARC) that incorporates both the cost of benefits in the current year and the amortization of the plan’s unfunded actuarial accrued liability.

15 The accrued annual requirement contribution liability is the difference between actuarially determined contributions and actual payments made to the pension fund.

16 Actuarial value of pension plan assets is the value of cash, investments, and other property belonging to a pension plan as used by an actuary for the purpose of an actuarial valuation.

[88] Article: “Defined Benefit Pensions and Household Income and Wealth.” By Marshall B. Reinsdorf and David G. Lenze. U.S. Bureau of Economic Analysis, Survey of Current Business, August 2009. Pages 50–62. <apps.bea.gov>

Pages 50–51:

U.S. households usually participate in two kinds of retirement income programs: social security, and a plan sponsored by their employer. The employer plan may be organized as either a defined contribution plan, such as a 401(k) plan, or a defined benefit plan. Defined contribution plans provide resources during retirement based on the amount of money that has been accumulated in an account, while defined benefit plans determine the level of benefits by a formula that typically depends on length of service and average or final pay. …

… A defined benefit plan has an actuarial liability for future benefits equal to the expected present value of the benefits to which the plan participants are entitled under the benefit formula. The value of participants’ benefit entitlement often does not coincide with the value of the assets that the plan has on hand; indeed, a plan that has a pay-as-you-go funding scheme might have only enough assets to ensure that it can make the current period’s benefit payments.2

A complete measure of the wealth of defined benefit plan participants is the expected present value of the benefits to which they are entitled, not the assets of the plan. This follows from the fact that if the assets of a defined benefit plan are insufficient to pay promised benefits, the plan sponsor must cover the shortfall. …

… [U]nder the accrual approach, the measure of compensation income for the participants in the plan is no longer the employer’s actual contributions to the plan. Instead, it is the present value of the benefits to which employees become entitled as a result of their service to the employer.

Measuring household income from defined benefit plans by actual contributions from employers plus actual investment income on plan assets can be considered a cash accounting approach to measuring these plans’ transactions…. We use the term “accrual accounting” to mean any approach that adopts the principle that a plan’s benefit obligations ought to be recorded as they are incurred.

2 Federal law requires that private pension plans operate as funded plans, not as pay-as-you-go plans.

[89] Report: “Preview of the 2013 Comprehensive Revision of the National Income and Product Accounts: Changes in Definitions and Presentations.” By Shelly Smith and others. U.S. Bureau of Economic Analysis, March 2013. <apps.bea.gov>

Page 22:

For defined benefit plans, the cash accounting approach is inadequate because the value of the benefit entitlements that participants accrue during a year often fails to coincide with the plans’ cash receipts.33

An employer who offers a defined benefit pension plan promises that an employee will receive a specified amount of future benefits that usually increases with each year of service.

[90] Textbook: Fiscal Administration. By John Mikesell. Wadsworth, Cengage Learning, 2014.

Page 170:

The vast majority of public employee pension programs are defined benefit programs.30

30 Exceptions to the rule that government employees are in defined benefit programs: faculty at many state universities are in the TIAA/CREF [Teachers Insurance and Annuity Association/College Retirement Equities Fund] defined contribution program and federal employees in the Federal Employee Retirement System Thrift Savings Plan. In 1996, Michigan established a defined contribution plan for all new employees. In 1991, West Virginia school employees were put in such a plan.

[91] Paper: “Bringing Actuarial Measures of Defined Benefit Pensions into the U.S. National Accounts.” By Marshall Reinsdorf (International Monetary Fund), David Lenze (U.S. Bureau of Economic Analysis), and Dylan Rassier (U.S. Bureau of Economic Analysis). International Monetary Fund, International Association for Research in Income and Wealth, 33rd General Conference, August 24–30, 2014. <www.justfacts.com>

Pages 11–12:

Although private DB [defined benefit] plans are on the decline, for state and local government employees DB pension plans continue to be the predominant form of retirement plan. … In 2012, there were 227 state-administered and 3,771 locally-administered DB pension plans according to the Survey of Public Pension Plans conducted by the U.S. Census Bureau. The number of active state and local plan members was 14.4 million (91 percent of the 15.9 million full-time equivalent employees), and the number of beneficiaries receiving periodic benefit payments was 9.0 million.

[92] Webpage: “What Changes Were Made to Pensions During the 2013 Comprehensive Revision, and How Have the Changes Affected Private, Federal, and State and Local Compensation?” U.S. Bureau of Economic Analysis, July 31, 2013. Last modified 7/26/18. <www.bea.gov>

“A large number of state and local pension plans are underfunded, which means that the value of the plans’ assets is less than their accrued pension liabilities for current workers and retirees.”

[93] The next 4 footnotes document that:

  • National Center for Education Statistics data on education spending does not account for unfunded healthcare and other post-employment benefits.
  • Retiree health benefits are common in the government sector and rare in the private sector.
  • Substantial amounts of healthcare benefits promised to government employees are unfunded.

[94] Email from the U.S. Department of Education, National Center for Education Statistics to Just Facts, March 31, 2015.

“The expenditures reported [in Table 213 and elsewhere by the National Center for Education Statistics] do not include or account for unfunded pension benefits or unfunded healthcare benefits.”

[95] Report: “Documentation for the NCES Common Core of Data National Public Education Financial Survey (NPEFS), School Year 2010–11 (Fiscal Year 2011), Preliminary File Version 1a.” U.S. Department of Education, National Center for Education Statistics, December 2013. <nces.ed.gov>

Pages 5–6:

NPEFS [National Public Education Finance Survey] collects employee benefits for the functions of instruction, support services, and operation of noninstructional services. NPEFS respondents are currently reporting employee benefits, which are defined as the “Amounts paid by the school district on behalf of employees (amounts not included in gross salary but in addition to that amount). Such payments are fringe benefits payments and although not directly paid to employees, nevertheless are part of the cost of personal services.”13 The definition of employee benefits is derived from the NCES school finance accounting handbook, Financial Accounting for Local and State School Systems: 2009 Edition (Allison, Honegger, and Johnson 2009). NPEFS does not collect actuarially determined annual required contributions;14 accrued annual requirement contribution liability;15 or the actuarial value of pension plan assets.16

13 The NPEFS instruction manual provides that employee benefits “include amounts paid by, or on behalf of, an LEA [Local Education Agency] for fringe benefits such as group insurance (including health benefits for current and retired employees), social security contributions, retirement contributions, tuition reimbursements, unemployment compensation, worker’s compensation, and other benefits such as unused sick leave (NCES, 2012).

14 Actuarially determined annual required contributions are the annual required contribution (ARC) that incorporates both the cost of benefits in the current year and the amortization of the plan’s unfunded actuarial accrued liability.

15 The accrued annual requirement contribution liability is the difference between actuarially determined contributions and actual payments made to the pension fund.

16 Actuarial value of pension plan assets is the value of cash, investments, and other property belonging to a pension plan as used by an actuary for the purpose of an actuarial valuation.

[96] Report: “Employment-Based Retiree Health Benefits: Trends in Access and Coverage, 1997–2010.” By Paul Fronstin and Nevin Adams. Employee Benefit Research Institute, October 1, 2012. <papers.ssrn.com>

Page 1: “Very few private-sector employers currently offer retiree health benefits, and the number offering them has been declining. In 2010, 17.7 percent of workers were employed at establishments that offered health coverage to early retirees, down from 28.9 percent in 1997.”

Page 4:

One of the most important factors (if not the single most important) contributing to the decline in the availability of retiree health benefits was a 1990 accounting rule change.1

The Financial Accounting Standards Board (FASB) issued Financial Accounting Statement No. 106 (FAS 106), “Employers’ Accounting for Postretirement Benefits Other Than Pensions” in December 1990, and it triggered many of the changes that private-sector employers have made to retiree health benefits. FAS 106 required companies to record retiree-health-benefit liabilities on their financial statements in accordance with generally accepted accounting principles, beginning with fiscal years after Dec. 15, 1992. Specifically, FAS 106 required private-sector employers to accrue and expense certain payments for future claims as well as actual paid claims. The immediate income-statement inclusion and balance-sheet-footnote recognition of these liabilities dramatically affected companies’ reported profits and losses. With this new view of the cost and the increasing expense of providing retiree health benefits, many private-sector employers overhauled their retiree health programs in ways that controlled, reduced, or eliminated these costs.2

Page 8:

The AHRQ [Agency for Healthcare Research and Quality] data show a similar trend among state-government employers. Among state employers, the percentage offering retiree health benefits increased between 1997 and 2003. In 2003, 94.9 percent were providing health coverage to early retirees and 88.6 percent were providing health coverage to Medicare-eligible retirees…. However, recently, the percentage of state-government employers offering retiree health benefits has fallen. By 2010, 70 percent were offering health coverage to early retirees and 63.2 percent were offering it to Medicare-eligible retirees.

Similarly, there has been a recent decline in the percentage of local-government employers offering retiree health benefits. Between 2006 and 2010, the percentage of local governments with 10,000 or more workers that offered health coverage to early retirees fell from 95.1 percent to 77.6 percent, and the percentage offering it to Medicare-eligible retirees fell from 86.2 percent to 67.3 percent…. Some of this decline may be due to recent GASB [Governmental Accounting Standards Board] rules mentioned above.

Only a few local governments reported that they have either recently or soon plan to eliminate health benefits for retirees. Instead, local governments have shifted (or plan to shift) the costs to retirees. In 2011, 2 percent of local governments reported that they eliminated coverage in the past two years or planned to eliminate coverage in the next two years for early retirees…. Five percent reported doing so, or planning to do so, for Medicare-eligible retirees. In contrast, 21 percent reported that they eliminated the employer subsidy in the past two years or planned to do so in the following two years for early-retiree coverage, and 32 percent reported taking such an action for Medicare-eligible retirees.

[97] Report: “State and Local Government Retiree Health Benefits: Liabilities Are Largely Unfunded, but Some Governments Are Taking Action.” U.S. Government Accountability Office, November 2009. <www.gao.gov>

Page 2 (of PDF):

Accounting standards require governments to account for the costs of other postemployment benefits (OPEB)—the largest of which is typically retiree health benefits—when an employee earns the benefit. As such, governments are reporting their OPEB liabilities—the amount of the obligation to employees who have earned OPEB. As state and local governments have historically not funded retiree health benefits when the benefits are earned, much of their OPEB liability may be unfunded. Amid fiscal pressures facing governments, this has raised concerns about the actions the governments can take to address their OPEB liabilities. …

The total unfunded OPEB liability reported in state and the largest local governments’ CAFRs [comprehensive annual financial reports] exceeds $530 billion. However, as variations between studies’ totals show, totaling unfunded OPEB liabilities across governments is challenging for a number of reasons, including the way that governments disclose such data. The unfunded OPEB liabilities for states and local governments GAO [U.S. Government Accountability Office] reviewed varied widely in size. Most of these governments do not have any assets set aside to fund them. The total for unfunded OPEB liabilities is higher than $530 billion because GAO reviewed OPEB data in CAFRs for the 50 states and 39 large local governments but not data for all local governments or additional data reported in separate financial reports. Also, the CAFRs we reviewed report data that predate the market downturn. Finally, OPEB valuations are based on assumptions about the health care cost inflation rate and discount rates for assets, which also affect the size of the unfunded liability.

Some state and local governments have taken actions to address liabilities associated with retiree health benefits by setting aside assets to prefund the liabilities before employees retire and reducing these liabilities by changing the structure of retiree health benefits. Approximately 35 percent of the 89 governments for which GAO reviewed CAFRs reported having set aside some assets for OPEB liabilities, but the percentage of the OPEB liability funded varied.

[98] Article: “Hunger for Stability Quells Appetite for Change.” By Michael B. Henderson and others. Education Next. Last updated August 31, 2021. <www.educationnext.org>

The survey was conducted from May 28 to June 21, 2021, by the polling firm Ipsos Public Affairs via its KnowledgePanel®. The KnowledgePanel® is a nationally representative panel of American adults (obtained via address-based sampling techniques) who agree to participate in a limited number of online surveys. Ipsos provides internet access and/or an appropriate device to KnowledgePanel® members who lack the necessary technology to participate. For individual surveys, Ipsos samples respondents from the KnowledgePanel®. Respondents could elect to complete this survey in English or Spanish.

The total sample for the survey (3,156 respondents) consists of two overlapping samples. The first is a nationally representative, stratified general-population sample of adults in the United States (1,410 respondents). The second consists of American parents, stepparents, or foster parents of at least one child living in the respondent’s household who is in a grade from kindergarten through 12th (2,022 respondents). The parent sample includes oversamples of parents with at least one child in a charter school (232 respondents), parents with at least one child in a private school (325 respondents), Black parents (288 respondents), and Hispanic parents (472 respondents). The completion rate for this survey is 54%.

For parents, after initially screening for qualification, we created a roster of the children in kindergarten through 12th grade who live in their household by asking for the grade, gender, race, ethnicity, school type (traditional public school, charter school, private school, or home school), and age for each child. We also allowed parents to label each child in the roster with a name or initials if they chose to do so. In all, the parent sample provided information on 3,443 K–12 students. We asked a series of questions about the schooling experiences for each of these children. After completing these questions about each child individually, parents proceeded to the remainder of the survey.

In this report, we analyze responses to questions about individual children at the child level. We analyze all other questions at the respondent level. For both student-level and parent-level analyses, we use survey weights designed for representativeness of the national population of parents of school-age children. For analysis of the general-population sample, we use survey weights designed for representativeness of the national population of adults.

[99] “Education Next—Program on Education Policy and Governance—Survey 2021.” Commissioned by Education Next and the Program on Education Policy and Governance at the Harvard Kennedy School of Government. Conducted by Ipsos Public Affairs during May–June 2021. <www.educationnext.org>

Page 5:

12. Based on your best guess, what is the average amount of money spent each year for a child in public schools in your local school district?

All – $8,719

Parents – $7,809

Teachers – $8,144

Hispanics – $10,820

Black, NonHispanic – $8,558

White, NonHispanic – $8,072

Income < $75,000 – $7,556

Income >= $75,000 – $9,715

College Graduate – $9,096

Not College Graduate – $8,532

Republicans – $8,927

Democrats – $8,490

[100] For facts about how surveys work and why some are accurate while others are not, click here.

[101] Calculated with the dataset: “Average Class Size in Public Schools, by School Level, Class Type, and Selected School Characteristics: 2017–18.” U.S. Department of Education, National Center for Education Statistics. Accessed January 25, 2022 at <nces.ed.gov>

NOTES:

  • “[T]eachers for students with disabilities and other special teachers … are generally excluded from class size calculations.” [Dataset: “Table 208.20. Public and Private Elementary and Secondary Teachers, Enrollment, Pupil/Teacher Ratios, and New Teacher Hires: Selected Years, Fall 1955 Through Fall 2030.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>]
  • An Excel file containing the data and calculations is available upon request.

[102] Calculated with data from:

a) Dataset: “Average Class Size in Public Schools, by School Level, Class Type, and Selected School Characteristics: 2017–18.” U.S. Department of Education, National Center for Education Statistics. Accessed January 25, 2022 at <nces.ed.gov>

b) Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

NOTES:

  • “[T]eachers for students with disabilities and other special teachers … are generally excluded from class size calculations.” [Dataset: “Table 208.20. Public and Private Elementary and Secondary Teachers, Enrollment, Pupil/Teacher Ratios, and New Teacher Hires: Selected Years, Fall 1955 Through Fall 2030.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>]
  • An Excel file containing the data and calculations is available upon request.

[103] Click here for documentation that the following items are excluded from spending data published by the National Center for Education Statistics:

  • State administration spending
  • Unfunded pension benefits
  • Post-employment non-pension benefits like health insurance

[104] Article: “Scientific Survey Shows Voters Widely Accept Misinformation Spread By the Media.” By James D. Agresti. Just Facts, January 2, 2020. <www.justfacts.com>

The findings are from a nationally representative annual survey commissioned by Just Facts, a non-profit research and educational institute. The survey was conducted by Triton Polling & Research, an academic research firm that used sound methodologies to assess U.S. residents who regularly vote. …

The survey was conducted by Triton Polling & Research, an academic research firm that serves scholars, corporations, and political campaigns. The responses were obtained through live telephone surveys of 700 likely voters across the U.S. during December 2–11, 2019. This sample size is large enough to accurately represent the U.S. population. Likely voters are people who say they vote “every time there is an opportunity” or in “most” elections.

The margin of sampling error for the total pool of respondents is ±4% with at least 95% confidence. The margins of error for the subsets are 6% for Democrat voters, 6% for Trump voters, 5% for males, 5% for females, 12% for 18 to 34 year olds, 5% for 35 to 64 year olds, and 6% for 65+ year olds.

The survey results presented in this article are slightly weighted to match the ages and genders of likely voters. The political parties and geographic locations of the survey respondents almost precisely match the population of likely voters. Thus, there is no need for weighting based upon these variables.

[105] Dataset: “Just Facts’ 2019 U.S. Nationwide Survey.” Just Facts, January 2020. <www.justfacts.com>

Page 1:

Q3. On average across the United States, how much do you think public schools spend per year to educate each classroom of students?

Less than $150,000 per classroom per year … Percent [=] 52.7

More than $150,000 per classroom per year … Percent [=] 36.2

Unsure … Percent [=] 11.1

[106] For facts about how surveys work and why some are accurate while others are not, click here.

[107] Calculated with data from: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[108] Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

NOTE: An Excel file containing the data is available upon request.

[109] Report: “Racial Disparities in Education Finance: Going Beyond Equal Revenues.” By Kim Rueben and Sheila Murray. Urban Institute, November 2008. <www.taxpolicycenter.org>

Page 1:

In the past, because public schools were funded largely by local property taxes, property-rich and -poor school districts differed greatly in expenditures per pupil. Since the early 1970s, however, state legislatures have, on their own initiative or at the behest of state courts, implemented school finance equalization programs to reduce the disparity in within-state education spending. …

Since the 1990s, many of the challenges to state finance systems have focused on ensuring that all students have equitable access to adequate educational opportunities as required by state education clauses (Minorini and Sugarman 1999). The argument is that some districts do not provide students with an adequate education and that it is the state’s responsibility to see that districts receive the funding to enable them to do so. The remedy might require some districts to spend more (perhaps significantly more) than other districts, depending on their student population. For example, in districts with many students from low-income families and families where English is not the first language, an “adequate education” may cost more money, and the state is required to ensure that these needs are met.

[110] Report: “How Schools Work & How to Work With Schools: A Primer For Those Who Want To Serve Children and Youth In Schools.” National Association of State Boards of Education, 2014. <www.cdc.gov>

Page 13:

At the local level, most funds for K–12 public schools are raised through local taxes on private property. Although a local property tax is a fairly stable source of funding, disparities in local wealth often directly affect the funds available to schools, reflected in the disparities in per student spending within and between school districts. Even if voters choose to tax themselves at a relatively high rate, low community property values can mean inadequate resources for schools.

Many states have taken the initiative or have been forced by legal challenges to address these inequities in education funding, which compromise the guarantee found in state constitutions that all students have equal access to an adequate public education. States have adopted ballot measures, such as California’s Proposition 98 and 111, to ensure funding equity, or have raised funds from lotteries and other mechanisms, or redistributed locally raised taxes through legislative means to help ensure equity in funding.

[111] Report: “Do Districts Enrolling High Percentages of Minority Students Spend Less?” By Thomas Parrish. U.S. Department of Education, National Center for Education Statistics, December 1996. <nces.ed.gov>

Figure 1 shows expenditures for four categories of school districts by the percentage of minority students enrolled. Each of these four categories of school districts represents about 25 percent of the nation’s public school children. Figure 1 shows that on average, during the 1989–90 school year, spending was fairly equal across school districts with less than 50 percent minority enrollment. However, districts in which 50 percent or more of the students enrolled were racial minorities spent more than those districts with less than 50 percent minority enrollment. For example, the average expenditure differential between districts with the highest and the lowest percentage of minority students was $431 per student ($5,474 versus $5,043).

Figure 1. Education Expenditures in the United States in Relation to Percentage of Minority Enrollment (1989–90) …

School Districts by Percentage of Minority Enrollment; … Average Expenditures per Student

Less than 5% [=] $5,043

5%–<20% [=] $5,169

20%–<50% [=] $5,071

50% or more [=] $5,474 …

In terms of “buying power” in school year 1989–90, districts with the highest percentages of minority students spent $286 less on public education per year than did districts with the lowest percentages of minority students ($4,103 vs. $4,389 per student) (figure 2). This change in direction occurs because school districts enrolling high percentages of minority students are more likely to be located in high-cost urban centers and to serve substantial numbers of students with special needs, thereby reducing the “buying power” of the dollars received.

Figure 2. Education “Buying Power” in the United States in Relation to Percentage of Minority Enrollment (1989–90)

Less than 5% [=] $4,389

5%–<20% [=] $4,350

20%–<50% [=] $4,190

50% or more [=] $4,103

[112] Book: Generational Change: Closing the Test Score Gap. Edited by Paul E. Peterson. Rowman & Littlefield, 2006.

Chapter 2: “How Families and Schools Shape the Achievement Gap.” By Derek Neal (University of Chicago and National Bureau of Economic Research). Pages 26–46.

Pages 32, 44:

Under the assumption that spending per student does not vary by race within a school district, the combination of school district data on per-pupil expenditure and school-level data on the racial composition of students provides information on average per pupil spending by public schools on black and white students. Given several different definitions of average expenditure, average spending per black student in public schools ranged from roughly $100 to $500 more than the corresponding figure for white students in 2001.15 These data provide suggestive but not definitive evidence concerning racial differences in resources provided to public schools. …

15. The data come from two Common Core of Data files: the Local (School District) Education Financial Survey and the Public Elementary/Secondary School Data. I calculated averages based on just educational expenditures as well as total expenditures. I also examined the sensitivity of results to the inclusion of allocated data.

[113] Report: “Racial Disparities in Education Finance: Going Beyond Equal Revenues.” By Kim Rueben and Sheila Murray. Urban Institute, November 2008. <www.taxpolicycenter.org>

Page 2:

In the past, because public schools were funded largely by local property taxes, property-rich and -poor school districts differed greatly in expenditures per pupil. Since the early 1970s, however, state legislatures have, on their own initiative or at the behest of state courts, implemented school finance equalization programs to reduce the disparity in within-state education spending. …

Since the 1990s, many of the challenges to state finance systems have focused on ensuring that all students have equitable access to adequate educational opportunities as required by state education clauses (Minorini and Sugarman 1999). The argument is that some districts do not provide students with an adequate education and that it is the state’s responsibility to see that districts receive the funding to enable them to do so. The remedy might require some districts to spend more (perhaps significantly more) than other districts, depending on their student population. For example, in districts with many students from low-income families and families where English is not the first language, an “adequate education” may cost more money, and the state is required to ensure that these needs are met.

Page 5:

To examine spending patterns across different populations of students, we compared average per pupil spending across districts weighted by the number of students in each racial or ethnic group. In general, differences in spending per pupil in districts serving nonwhite and white students are very small. In 1972, the ratio of nonwhite to white spending was .98; this trend had reversed by 1982, as spending per pupil for nonwhite students was slightly higher than for white students in most states and in the United States as a whole and has been for the past 20 years (figure 2). Table 2 presents spending per pupil figures for 2002 weighted by the number of students in each subgroup.

Page 7:

The results presented thus far need to be considered with a few caveats. These ratios do not reflect that the costs of educating students of different groups differ and that minority students are often found in urban districts that have higher cost structures. … In addition, although spending differences have lessened between districts, it is unclear whether inequities are lessened at the school level.

[114] Report: “The Myth of Racial Disparities in Public School Funding.” By Jason Richwine. Heritage Foundation, April 20, 2011. <thf_media.s3.amazonaws.com>

Pages 2–3:

One of the more rigorous reports on funding disparities was published by the Urban Institute.11 The authors of the study combined district-level spending data with the racial and ethnic composition of schools within districts. … This paper employs a similar methodology, using 2006–2007 datasets from the U.S. Department of Education to examine school funding at both the national and regional levels.

Pages 3–4:

Because the cost of living varies across the U.S., school expenditures are not always directly comparable. In areas with a lower cost of living, the same amount of money can buy more resources than in high-cost areas. To account for this difference, the NCES [National Center for Education Statistics] calculates a Comparable Wage Index (CWI) for each school district based on the average non-teacher wage in the district’s labor market.14

Cost adjustments should be regarded cautiously. Living expenses can still vary within markets, sometimes considerably. The District of Columbia, for example, is a high-expense city overall, but its poorest (and mostly black and Hispanic) sections have a lower cost of living than the white sections. While the raw data are likely to overstate the minority school funding advantage, the adjusted data probably understate it.

Page 4:

Public Education Spending by Race and Ethnic Group

National

Unadjusted

Adjusted For Cost of Living

Per-Pupil Spending

% of White Per-Pupil Spending

% of White Per-Pupil Spending

White

$10,816

100%

100%

Black

$11,387

105%

101%

Hispanic

$10,951

101%

96%

Asian

$11,535

107%

97%

[115] Paper: “How Progressive is School Funding in the United States?” By Matthew M. Chingos. Education Next, June 19, 2017. <www.educationnext.org>

[W]e calculate the average per-pupil funding levels of districts attended by poor students (those from families below the federal poverty level), compared to the funding of districts attended by non-poor students. Specifically, we calculate two weighted averages of the funding of all regular school districts in each state: one using the number of poor students in each district as weights, and the other using the number of non-poor students as weights. We adjust funding levels in each district using average wage levels in its local labor market.3

In this report, I use the same methodology to produce a national overview of the distribution of school funding in the U.S., both in the most recent year for which data are available (2013–14) and over time since 1994–95. The national distribution of funding reflects both the distribution within states, as well as how students are distributed across states. For example, the average state could have progressive funding, but at the national level funding could still be regressive if poor students are substantially more likely to live in states with low funding levels.

Nationwide, per-student K–12 education funding from all sources (local, state, and federal) is similar, on average, at the districts attended by poor students ($12,961) and non-poor students ($12,640), a difference of 2.5 percent in favor of poor students.

Figure 1 shows that this difference has not changed much since 1994–95, when funding levels were lower (less than $10,000 in 2014 dollars) but the difference between poor and non-poor students was similar in percentage terms (2.4 percent). Average progressivity nationwide did rise in the years prior to the Great Recession, with the poor/non-poor difference peaking at 4.3 percent in 2007–08.

[116] Click here for documentation that the following items are excluded from spending data published by the National Center for Education Statistics:

  • State administration spending
  • Unfunded pension benefits
  • Post-employment non-pension benefits like health insurance

[117] Calculated with data from:

a) Dataset: “Table 236.75. Total and Current Expenditures Per Pupil in Fall Enrollment in Public Elementary and Secondary Schools, by Function and State or Jurisdiction: 2018–19.” U.S. Department Of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

b) Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

c) Report: “Real Personal Consumption Income by State and Metropolitan Area, 2019.” U.S. Bureau of Economic Analysis, December 15, 2020. <www.bea.gov>

“Table 3. Regional Price Parities by State, 2019” <www.bea.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • The precise figures for each state are provided below.

Average Spending Per Public School Student

State

Spending

Idaho

$10,661

Utah

$10,673

Arizona

$11,526

Florida

$11,674

North Carolina

$12,267

Nevada

$12,271

Mississippi

$12,351

Oklahoma

$12,553

Tennessee

$12,931

Alabama

$13,564

Texas

$13,605

New Mexico

$13,765

Indiana

$13,892

California

$13,998

South Dakota

$14,167

Georgia

$14,213

Colorado

$14,297

Virginia

$14,517

Arkansas

$14,933

Hawaii

$15,085

Kentucky

$15,180

Missouri

$15,188

Louisiana

$15,289

South Carolina

$15,434

Michigan

$15,710

West Virginia

$15,792

Kansas

$16,309

Montana

$16,399

Iowa

$16,415

Oregon

$16,589

Wisconsin

$16,609

Nebraska

$17,098

Maryland

$17,200

Minnesota

$17,462

Washington

$17,584

Delaware

$17,678

Ohio

$17,866

Maine

$18,266

New Hampshire

$18,747

Massachusetts

$19,004

Rhode Island

$19,093

North Dakota

$19,104

Alaska

$19,704

Illinois

$19,926

New Jersey

$20,324

Pennsylvania

$20,484

Vermont

$22,590

Connecticut

$23,003

New York

$23,789

D.C.

$26,913

[118] Calculated with data from:

a) Dataset: “Table 2.4.5U. Personal Consumption Expenditures by Type of Product.” U.S. Bureau of Economic Analysis. Last revised January 27, 2022. <apps.bea.gov>

b) Dataset: “Table 1.1.5. Gross Domestic Product.” U.S. Bureau of Economic Analysis. Last revised January 27, 2022. <www.bea.gov>

c) Dataset: “CPI—All Urban Consumers (Current Series).” U.S. Department of Labor, Bureau of Labor Statistics. Accessed January 18, 2022 at <www.bls.gov>

“Series Id: CUUR0000SA0; Series Title: All Items in U.S. City Average, All Urban Consumers, Not Seasonally Adjusted; Area: U.S. City Average; Item: All Items; Base Period: 1982–84=100”

d) Dataset: “Table 236.20. Total Expenditures for Public Elementary and Secondary Education and Other Related Programs, by Function and Subfunction: Selected Years, 1990–91 Through 2017–18.” U.S. Department of Education, National Center for Education Statistics, November 2020. <nces.ed.gov>

e) Dataset: “Table 105.20. Enrollment in Elementary, Secondary, and Degree-Granting Postsecondary Institutions, by Level and Control of Institution, Enrollment Level, and Attendance Status and Sex of Student: Selected Years, Fall 1990 Through Fall 2029.” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

f). Dataset: “Table 105.20. Enrollment in Elementary, Secondary, and Degree-Granting Postsecondary Institutions, by Level and Control of Institution, Enrollment Level, and Attendance Status and Sex of Student: Selected Years, Fall 1990 Through Fall 2029.” U.S. Department Of Education, National Center for Education Statistics, March 2021. <nces.ed.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • The next five footnotes provide important context for understanding the data and calculations used to determine this fact. In short, they document the following:
    • The result of this calculation is corroborated by a 1995 working paper published by the U.S. Department of Education.
    • The combination of “elementary” and “secondary” schools roughly encompasses grades K–12.
    • Private-sector spending on education is equal to the sum of these three measures reported by the federal government’s Bureau of Economic Analysis:
      1) personal consumption expenditures (PCE)
      2) gross private domestic investment (GPDI)
      3) net exports of goods and services
    • PCE is the “primary measure of consumer spending on goods and services” by private individuals and nonprofit organizations.
    • GPDI is a measure of private spending on “structures, equipment, and intellectual property products.”
    • Since private school education is not a service that is typically imported or exported, a valid approximation of spending on private K–12 schools can be obtained by summing PCE, GPDI, and government spending on private K–12 schools.

[119] In 1995, the U.S. Department of Education (DOE) published a working paper which “estimated that the total expenditures for private schools in 1991–92 (including operating expenses and capital) were between $18.0 and $19.4 billion.”† Using the same methodology as in the footnote above, Just Facts calculated that total expenditures for private schools in the same year were $16.3 billion, or 10–16% lower than DOE’s estimates.‡ This difference fits with the DOE working paper’s statement that “we would be surprised if improved data changed our overall estimate of total expenditures on private education by more than perhaps 10 or 15%.” Some of shortcomings of the data used in DOE working paper are as follows:

  • “The main area of concern in the data for Catholic elementary and secondary schools is the response rate: each had a response rate far below 100%. (The response rate for the elementary survey was just above 50%, and for the secondary survey it was about 57%.)”
  • “In addition, our use of region as a proxy for geographic variation may be somewhat crude.”
  • “The principal caveat that needs to be attached to our estimates is that we are uncertain about the specific expenditures school officials included in their responses to the survey items we relied on in our analysis.”
  • “Nor do we know whether most schools responded to the survey items on the basis of a formal school budget or on the basis of less formal materials.”

NOTES:

  • † Working paper: “Estimates of Expenditures for Private K–12 Schools.” By Michael Garet, Tsze H. Chan, and Joel D. Sherman. U.S. Department of Education, National Center for Education Statistics, May 1995. <nces.ed.gov>
  • ‡ An Excel file containing the data and calculations is available here.

[120] Report: “Documentation to the NCES Common Core of Data Public Elementary/Secondary School Universe Survey: School Year 2010–11, Version Provisional 2a.” U.S. Department of Education, National Center for Education Statistics, September 2012. <nces.ed.gov>

Page C-6: “Elementary A general level of instruction classified by state and local practice as elementary, composed of any span of grades not above grade 8; preschool or kindergarten included only if it is an integral part of an elementary school or a regularly established school system.”

Page C-14: “Secondary The general level of instruction classified by state and local practice as secondary and composed of any span of grades beginning with the next grade following the elementary grades and ending with or below grade 12.”

[121] Report: “Fiscal Year 2013 Analytical Perspectives, Budget of the U.S. Government.” White House Office of Management and Budget, February 12, 2012. <www.gpo.gov>

Page 471:

The main purpose of the NIPAs [national income and product accounts published by the U.S. Bureau of Economic Analysis] is to measure the Nation’s total production of goods and services, known as gross domestic product (GDP), and the incomes generated in its production. GDP excludes intermediate production to avoid double counting. Government consumption expenditures along with government gross investment—State and local as well as Federal—are included in GDP as part of final output, together with personal consumption expenditures, gross private domestic investment, and net exports of goods and services (exports minus imports).

[122] Report: “Concepts and Methods of the U.S. National Income and Product Accounts, Chapter 5: Personal Consumption Expenditures.” U.S. Bureau of Economic Analysis. Updated November 2017. <www.bea.gov>

Page 5-1:

Personal consumption expenditures (PCE) is the primary measure of consumer spending on goods and services in the U.S. economy.1 It accounts for about two-thirds of domestic final spending, and thus it is the primary engine that drives future economic growth. PCE shows how much of the income earned by households is being spent on current consumption as opposed to how much is being saved for future consumption.

PCE also provides a comprehensive measure of types of goods and services that are purchased by households. Thus, for example, it shows the portion of spending that is accounted for by discretionary items, such as motor vehicles, or the adjustments that consumers make to changes in prices, such as a sharp run-up in gasoline prices.2

Page 5-2:

PCE measures the goods and services purchased by “persons”—that is, by households and by nonprofit institutions serving households (NPISHs)—who are resident in the United States. Persons resident in the United States are those who are physically located in the United States and who have resided, or expect to reside, in this country for 1 year or more. PCE also includes purchases by U.S. government civilian and military personnel stationed abroad, regardless of the duration of their assignments, and by U.S. residents who are traveling or working abroad for 1 year or less.

Page 5-67:

Nonprofit Institutions Serving Households

In the NIPAs [National Income and Product Accounts], nonprofit institutions serving households (NPISHs), which have tax-exempt status, are treated as part of the personal sector of the economy. Because NPISHs produce services that are not generally sold at market prices, the value of these services is measured as the costs incurred in producing them.

In PCE, the value of a household purchase of a service that is provided by a NPISH consists of the price paid by the household or on behalf of the household for that service plus the value added by the NPISH that is not included in the price. For example, the value of the educational services provided to a student by a university consists of the tuition fee paid by the household to the university and of the additional services that are funded by sources other than tuition fees (such as by the returns to an endowment fund).

[123] Report: “Measuring the Economy: A Primer on GDP and the National Income and Product Accounts.” U.S. Bureau of Economic Analysis, December 2015. <www.bea.gov>

Page 8: “Gross private domestic investment consists of purchases of fixed assets (structures, equipment, and intellectual property products) by private businesses that contribute to production and have a useful life of more than one year, of purchases of homes by households, and of private business investment in inventories.”

[124] Calculated with the dataset: “Average Class Size in Private Schools, by School Level, Class Type, and Selected School Characteristics: 2017–18.” U.S. Department of Education, National Center for Education Statistics. Accessed January 25, 2022 at <nces.ed.gov>

NOTES:

  • “[T]eachers for students with disabilities and other special teachers … are generally excluded from class size calculations.” [Dataset: “Table 208.20. Public and Private Elementary and Secondary Teachers, Enrollment, Pupil/Teacher Ratios, and New Teacher Hires: Selected Years, Fall 1955 Through Fall 2029.” U.S. Department of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>]
  • An Excel file containing the data and calculations is available upon request.

[125] CALCULATION: $8,499 spending per student × 17.4 students per classroom = $147,883 spending per classroom

[126] Calculated with data from:

a) Dataset: “Table 205.50. Private Elementary and Secondary Enrollment, Number of Schools, and Average Tuition, by School Level, Orientation, and Tuition: Selected Years, 1999–2000 Through 2011–12.” U.S. Department of Education, National Center for Education Statistics, August 2021. <nces.ed.gov>

“Each school reports the highest annual tuition charged for a full-time student; this amount does not take into account discounts that individual students may receive. This amount is weighted by the number of students enrolled in each school and averaged.”

b) Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

NOTES:

  • As of 2/25/2022, this is the latest available dataset on private school tuitions.
  • An Excel file containing the data and calculations is available upon request.

[127] Report: “Documentation to the NCES [National Center for Education Statistics] Common Core of Data Public Elementary/Secondary School Universe Survey: School Year 2010–11, Version Provisional 2a.” U.S. Department of Education, National Center for Education Statistics, September 2012. <nces.ed.gov>

Page C-6: “Elementary A general level of instruction classified by state and local practice as elementary, composed of any span of grades not above grade 8; preschool or kindergarten included only if it is an integral part of an elementary school or a regularly established school system.”

Page C-14: “Secondary The general level of instruction classified by state and local practice as secondary and composed of any span of grades beginning with the next grade following the elementary grades and ending with or below grade 12.”

[128] Paper: “Academic Achievement and Demographic Traits of Homeschool Students: A Nationwide Study.” By Brian D. Ray. Academic Leadership, Winter 2010. <www.nheri.org>

Page 4: “Students were included in the study if a parent affirmed that his or her student was ‘… taught at home within the past twelve months by his/her parent for at least 51% of the time in the grade level now being tested.’

Page 7: “The target population was all families in the United States who were educating their school-age children at home and having standardized achievement tests administered to their children. … A total of 11,739 students provided useable questionnaires with corresponding achievement tests.”

[129] Email from Brian D. Ray to Just Facts, May 12, 2015.

“The median amount spent per this one year on the student’s education for textbooks, lesson materials, tutoring, enrichment services, testing, counseling, evaluation, and so forth is $400 to $599. Here is the frequency list regarding the answers. …”

[130] Calculated with data from the paper: “Academic Achievement and Demographic Traits of Homeschool Students: A Nationwide Study.” By Brian D. Ray. Academic Leadership, Winter 2010. <www.nheri.org>

Page 7:

It was very challenging to calculate the response rate. One of the main problems was that, well into the study, it was discovered that many of the large-group test administrators were not communicating to their constituent homeschool families that they had been invited to participate in the study. Based on the best evidence available, the response rate was a minimum of 19% for the four main testing services with whom the study was originally planned, who worked fairly hard to get a good response from the homeschooled families, and whose students accounted for 71.5% (n = 8,397) of the participants in the study. That is, of the students who were tested and whose parents were invited to participate in the study, both test scores and survey responses were received for this group. It is possible that the response rate was higher, perhaps as much as 25% for these four testing services. For the other testing services and sources of data, the response rate was notably lower, at an estimated 11.0%. These testing services and other sources of data used a less-concentrated approach to soliciting participation and following-up with reminders to secure participation.

NOTE: An Excel file containing the data and calculations is available upon request.

[131] Textbook: Mind on Statistics (4th edition). By Jessica M. Utts and Robert F. Heckard. Brooks/Cole Cengage Learning, 2012.

Pages 164–165:

Surveys that simply use those who respond voluntarily are sure to be biased in favor of those with strong opinions or with time on their hands. …

According to a poll taken among scientists and reported in the prestigious journal Science … scientists don’t have much faith in either the public or the media. … It isn’t until the end of the article that we learn who responded: “The study reported a 34% response rate among scientists….” … With only about a third of those contacted responding, it is inappropriate to generalize these findings and conclude that most scientists have so little faith in the public and the media.

[132] Book: Sampling: Design and Analysis (2nd edition). By Sharon L. Lohr. Brooks/Cole Cengage Learning, 2010.

Pages 5–6:

The following examples indicate some ways in which selection bias can occur. …

… Nonresponse distorts the results of many surveys, even sources that are carefully designed to minimize other sources of selection bias. Often, nonrespondents differ critically from the respondents, but the extent of that difference is unknown unless you can later obtain information about the nonrespondents. Many surveys reported in newspapers or research journals have dismal response rates—in some, the response rate is as low as 10%. It is difficult to see how results can be generalized of the population when 90% of the targeted sample cannot be reached or refuses to participate.

[133] Paper: “Response Rates to Mail Surveys Published in Medical Journals.” By David A. Asch and others. Journal of Clinical Epidemiology, 1997. Pages 1129–1136. <www.jclinepi.com>

Page 1129:

The purpose of this study was to characterize response rates for mail surveys published in medical journals…. The mean response rate among mail surveys published in medical journals is approximately 60%. However, response rates vary according to subject studied and techniques used. Published surveys of physicians have a mean response rate of only 54%, and those of non-physicians have a mean response rate of 68%. … Although several mail survey techniques are associated with higher response rates, response rates to published mail surveys tend to be moderate. However, a survey’s response rate is at best an indirect indication of the extent of non-respondent bias. Investigators, journal editors, and readers should devote more attention to assessments of bias, and less to specific response rate thresholds.

The level of art and interpretation in calculating response rates reflects the indirect and therefore limited use of the response rate in evaluating survey results. So long as one has sufficient cases for statistical analyses, non-response to surveys is a problem only because of the possibility that respondents differ in a meaningful way from non-respondents, thus biasing the results22, 23. Although there are more opportunities for non-response bias when response rates are low than high, there is no necessary relationship between response rates and bias. Surveys with very low response rates may provide a representative sample of the population of interest, and surveys with high response rates may not.

Nevertheless, because it is so easy to measure response rates, and so difficult to identify bias, response rates are a conventional proxy for assessments of bias. In general, investigators do not seem to help editors and readers in this regard. As we report, most published surveys make no mention of attempts to ascertain non-respondent bias. Similarly, some editors and readers may discredit the results of a survey with a low response rate even if specific tests limit the extent or possibility of this bias.

[134] Webpage: “CPI Inflation Calculator.” United States Department of Labor, Bureau of Labor Statistics. Accessed February 2, 2022 at <www.bls.gov>

$400 in August 2007 has the same buying power as $536.37 in December 2021

$599 in August 2007 has the same buying power as $803.22 in December 2021

About the CPI Inflation Calculator

The CPI inflation calculator uses the Consumer Price Index for All Urban Consumers (CPI-U) U.S. city average series for all items, not seasonally adjusted. This data represents changes in the prices of all goods and services purchased for consumption by urban households.

[135] Article: “What Have We Learned About Homeschooling?” By Eric J. Isenberg. Peabody Journal of Education, December 5, 2007. Pages 387–409. <www.tandfonline.com>

Page 398:

Parents make school choice decisions based on preferences, the quality of local schools, and constraints of income and available leisure time. Separating the causal effect of each variable on school choice requires holding the others constant. For instance, if two families with identical preferences, income, and leisure time choose different schools, the difference can be ascribed to the local education market. Families who live in the same area with the same time and income constraints but who choose different schools must have different preferences.

Page 404:

Using aggregate data or child-level data, there is some evidence that poorer academic quality of public schools and decreased choice of private schools both contribute to an increase in homeschooling. Isenberg (2003) used test score data to measure academic school quality in Wisconsin. The results indicate that in small towns, a decrease in math test scores in a school district increases the likelihood of homeschooling. The magnitude of this effect is significant. A decrease in math scores from the 1 standard deviation above the mean to 1 standard deviation below the mean increases homeschooling by 29%, from 1.9 percentage points to 2.4 percentage points, all else equal. A decrease from 2 standard deviations above to 2 standard deviations below increases homeschooling by 65%, from 1.6 percentage points to 2.7 percentage points.

Page 405:

If parents are dissatisfied with the public schools for academic, religious, or other reasons, they must choose between homeschooling and private schooling. Private school has tuition costs; homeschooling has opportunity costs of time. Isenberg (2006) showed the ways in which mothers are motivated by the amount of disposable time they have, the opportunity cost of time, and income constraints. The results are summarized in Table 3.

If a mother has preschool children as well as a school-age child, she is predisposed to stay home, decrease her work hours, or even stay out of the labor force entirely and therefore more likely to homeschool. Of course, small children require a great deal of time to care for, but this pull on a mother’s time is dominated by the incentive to withdraw from the labor force, freeing daytime hours and eliminating commute time, thereby increasing the likelihood of homeschooling. All else equal, having a preschool child younger than 3 years old increases the probability of homeschooling a school-age sibling by 1.2 percentage points; a toddler age 3 to 6 increases the probability of homeschooling by 0.5 percentage points

Having school-age siblings also increases the likelihood that a child is homeschooled. Each additional sibling beyond the first sibling increases the probability that a particular child is homeschooled. All else equal, a child with two other school-age siblings is 1.2 percentage points more likely to be homeschooled than a child with one school-age sibling, and a child with three or more siblings in school is an additional 1.7 percentage points more likely to be homeschooled than a child with two siblings. There appear to be economies of scale in homeschooling.

The presence of other adults in the household also has a significant effect on the likelihood of homeschooling. This may be because these extra adults take over household tasks, giving the mother more disposable time. Other adults in the household, including but not limited to a husband, increase the likelihood of homeschooling by 0.5 percentage points per extra adult.

[136] Dataset: “Table 235.10. Revenues for Public Elementary and Secondary Schools, by Source of Funds: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

NOTE: An Excel file containing the data is available upon request.

[137] Dataset: “Table 235.10. Revenues for Public Elementary and Secondary Schools, by Source of Funds: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

NOTE: An Excel file containing the data is available upon request.

[138] Calculated with the dataset: “Table 236.20. Total Expenditures for Public Elementary and Secondary Education and Other Related Programs, by Function and Subfunction: Selected Years, 1990–91 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

“Excludes expenditures for state education agencies.”

NOTE: An Excel file containing the data and calculations is available upon request.

[139] Click here for documentation that the following items are excluded from spending data published by the National Center for Education Statistics:

  • State administration spending
  • Unfunded pension benefits
  • Post-employment non-pension benefits like health insurance

[140] Calculated with the dataset: “Table 236.20. Total Expenditures for Public Elementary and Secondary Education and Other Related Programs, by Function and Subfunction: Selected Years, 1990–91 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

“Excludes expenditures for state education agencies.”

NOTE: An Excel file containing the data and calculations is available upon request.

[141] Calculated with the dataset: “Table 236.20. Total Expenditures for Public Elementary and Secondary Education and Other Related Programs, by Function and Subfunction: Selected Years, 1990–91 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

“Excludes expenditures for state education agencies.”

NOTE: An Excel file containing the data and calculations is available upon request.

[142] Click here for documentation that the following items are excluded from spending data published by the National Center for Education Statistics:

• State administration spending

• Unfunded pension benefits

• Post-employment non-pension benefits like health insurance

[143] Calculated with the dataset: “Table 6.2D. Compensation of Employees by Industry [Millions of Dollars].” United States Department of Commerce, Bureau of Economic Analysis. Last revised July 31, 2021. <www.bea.gov>

“2020 … Government … State and local [=] 1,574,459 … Education [=] 771,103”

CALCULATION: 771,103 / 1,574,459 = 49%

[144] As documented in the next five footnotes, this data on government employee compensation:

  • Accounts for defined benefit pensions benefits “as employees earn them, rather than when employers actually make cash payments to pension plans.”
  • Does not include the unfunded liabilities of retirement non-pension benefits (like health insurance). It does, however, include such spending for current retirees.

[145] Webpage: “What Changes Were Made to Pensions During the 2013 Comprehensive Revision, and How Have the Changes Affected Private, Federal, and State and Local Compensation?” U.S. Bureau of Economic Analysis, July 31, 2013. <www.bea.gov>

BEA [U.S. Bureau of Economic Analysis] changed its method for recording the transactions of defined benefit pension plans from a cash accounting basis to an accrual accounting basis as part of the comprehensive revision of the national income and product accounts (NIPAs) released on July 31, 2013. This improvement reflects the most recent international guidelines for the compilation of national accounts—the System of National Accounts 2008 (2008 SNA), which recommends an accrual-based treatment of defined benefit pension plans.

Defined benefit plans provide benefits during retirement based on a formula that typically depends on an employee’s length of service and average pay among other factors. The promised benefit entitlements tend to grow in a relatively smooth manner, whereas employers’ cash contributions may be volatile or sporadic. Accrual accounting is preferred over cash accounting for compiling national accounts because it aligns production with the incomes earned from that production and records both in the same period; cash accounting, on the other hand, reflects incomes when paid, regardless of when they were earned. Thus, the accrual accounting method better reflects the relatively smooth manner in which benefits are earned by employees each period as a result of the work they perform.

The new treatment applies to all defined benefit pension plans—private, federal government, and state and local government—and this change resulted in revisions to BEA’s estimates of private, federal, and state and local compensation.

[146] Article: “Changes to How the U.S. Economy is Measured Roll Out July 31.” U.S. Bureau of Economic Analysis, July 23, 2013. <www.bea.gov>

“On July 31, we will switch from a cash accounting method to an accrual accounting method to measure the transactions of defined benefit pension plans. That means we will count the benefits as employees earn them, rather than when employers actually make cash payments to pension plans.”

[147] Report: “Preview of the 2013 Comprehensive Revision of the National Income and Product Accounts: Changes in Definitions and Presentations.” By Shelly Smith and others. U.S. Bureau of Economic Analysis, March 2013. <apps.bea.gov>

Page 25: “With this comprehensive revision, estimates of wages and salaries that are a component of personal income will be presented on an accrual basis back to 1929.”

[148] Email from the U.S. Bureau of Economic Analysis to Just Facts, March 19, 2015.

“Retiree health care benefits (which are separate from pensions) are treated on a cash basis and are effectively included in the compensation of current workers.”

[149] Webpage: “What Is Included in Federal Government Employee Compensation?” U.S. Bureau of Economic Analysis. Last modified July 26, 2018. <www.bea.gov>

The contributions for employee health insurance consist of the federal share of premium payments to private health insurance plans for current employees and retirees1.

1 The payments to amortize the unfunded health care liabilities of the Postal Service Retiree Health Benefits Fund are treated as capital transfers to persons and are therefore not included in compensation.

[150] Calculated with data from:

a) Dataset: “Table 211.60 Estimated Average Annual Salary of Teachers in Public Elementary and Secondary Schools, by State: Selected Years, 1969–70 Through 2020–21.” U.S. Department of Education, National Center for Education Statistics, August 2021. <nces.ed.gov>

b) Report: “Employer Costs for Employee Compensation, Historical Listing, March 2004–September 2021.” U.S. Bureau of Labor Statistics, December 14, 2021. <www.bls.gov>

Pages 175–177: “Table 7. State and Local Government Workers, by Occupational Group: Employer Costs Per Hours Worked for Employee Compensation and Costs as a Percentage of Total Compensation, Teachers1,2

NOTE: An Excel file containing the data and calculations is available upon request.

[151] The source of the benefits data for teacher compensation is the U.S. Bureau of Labor Statistics’ Employer Costs for Employee Compensation [ECEC] survey. The next three footnotes show that this survey does not capture the costs of retirement health benefits or the unfunded liabilities of pensions.

[152] Paper: “Compensation for State and Local Government Workers.” By Maury Gittleman (U.S. Department of Labor) and Pierce Brooks (U.S. Department of Labor). Journal of Economic Perspectives, Winter 2012. Pages 217–242. <pubs.aeaweb.org>

Appendix (<www.aeaweb.org>): “Note that the ECEC [Employer Expenditures for Employee Compensation] by design excludes retiree health plan costs.”

NOTE: On 12/27/2014, Just Facts wrote to the authors of this paper to confirm the statement above, and the lead author affirmed this is true. He was unable to find an explicit statement from a Bureau of Labor Statistics publication stating that retiree health plan costs are not included in the ECEC [Employer Expenditures for Employee Compensation], but he wrote, “If one looks at what is explicitly included, however, it is apparent that they are not included in ECEC costs.”

[153] NOTE: The information in the source below implicitly confirms the source above, because it explains that the ECEC measures the costs of employing current employees divided by their working hours. Thus, it does not capture healthcare costs for previous employees (for example, retirees).

Article: “Analyzing Employers’ Costs for Wages, Salaries, and Benefits.” By Felicia Nathan (economist in the Division of Employment Cost Trends, Bureau of Labor Statistics). Bureau of Labor Statistics Monthly Labor Review, October 1987. <www.bls.gov>

Pages 6–9:

How Compensation Costs Are Calculated

At least two approaches can be taken in measuring an employer’s costs for employee compensation. One approach focuses on past expenditures—that is, the actual money an employer spent on compensation during a specified time, usually a past year. The other approach focuses on current costs—annual costs based on the current price of benefits under current plan provisions. The Bureau’s previous measure of compensation cost levels, the Employer Expenditures for Employee Compensation survey, used the past expenditures approach.5 Because the ECI [Employment Cost Index] measures change from one time to another, it uses the current cost approach.

To estimate the total compensation cost per hour worked, the ECI (1) identifies the benefits provided, (2) determines, from current cost information (current price and current plan provisions), the cost per hour worked for each benefit, then (3) sums the costs for the benefits with the straight-time wage or salary rate. The following examples illustrate how current costs are determined for specific benefit plans, and how they differ from costs based on past expenditures. …

Example 2. A health insurance plan is provided all employees. The monthly premium for each employee is $120 for the first 6 months of a given year, and increases to $140 for the last 6 months. Each employee works 2,000 hours per year. …

In this example, the current cost at any time during the first half of the year is the annual premium divided by the annual hours worked….

Compensation cost levels, however, should reflect the current industry and occupational mix each year they are published. Thus, to estimate current cost levels for the aggregate series, it is necessary to have employment data that refer to the current mix. Such data are obtained by apportioning industry employment from the Bureau’s Current Employment Statistics program, using occupational employment by industry from the ECI sample. Industry employment estimates from the Current Employment Statistics program are published monthly, and are adjusted each year to a universe of all nonfarm establishments from March of the previous year.

5 The Employer Expenditures for Employee Compensation (EEEC) [note the difference from ECEC] survey was discontinued in 1977. While differing from the ECI in that it measured expenditures rather than current costs, the EEEC survey had other characteristics similar to those of the ECI. It covered virtually the same benefits and reported the costs on a work-hour basis. The scope of the EEEC survey was also similar to that of the ECI in that it covered the private nonfarm work force.

[154] Email from the U.S. Bureau of Labor Statistics to Just Facts, May 12, 2015.

For the purposes of NCS [the National Compensation Survey, the source of the Employer Cost for Employee Compensation data†], defined benefit costs are: actual dollar amount an establishment placed in the pension fund from cash, stock, corporate bonds and other financial instrument; Pension Benefit Guaranty Corporation (PBGC) premiums; and administration fees paid to third party administrators (ex. legal, actuary, broker’s). Those costs that are considered out-of-scope for NCS are: actuarial costs (i.e. estimate of current and future obligations); pension benefits paid to retirees; service costs (actuarially determined estimate of employer pension obligations based on benefits earned by employees during the period); and other costs (ex. interest, amortization of prior costs).

NOTE: † Report: “Work Schedules in the National Compensation Survey.” By Richard Schumann. U.S. Bureau of Labor Statistics, July 28, 2008. <www.bls.gov>

Page 1: “The National Compensation Survey (NCS) produces data on occupational earnings, compensation cost trends—the Employment Cost Index (ECI) and the Employer Cost for Employee Compensation (ECEC) series—and benefits.”

[155] Calculated with data from:

a) Dataset: “Table 211.60 Estimated Average Annual Salary of Teachers in Public Elementary and Secondary Schools, by State: Selected Years, 1969–70 Through 2020–21.” U.S. Department of Education, National Center for Education Statistics, August 2021. <nces.ed.gov>

b) Report: “Employer Costs for Employee Compensation, Historical Listing, March 2004–September 2021.” U.S. Bureau of Labor Statistics, December 14, 2021. <www.bls.gov>

Pages 175–177: “Table 7. State and Local Government Workers, by Occupational Group: Employer Costs Per Hours Worked for Employee Compensation and Costs as a Percentage of Total Compensation, Teachers1,2

c) Report: “Real Personal Consumption Expenditures and Personal Income by State, 2020.” U.S. Bureau of Economic Analysis, December 14, 2021. <www.bea.gov>

Page 9 (of PDF): “Table 2. Regional Price Parities and Implicit Regional Price Deflators, by State, 2020”

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • The figures for each state are provided below.

State

Price Parity-Adjusted Compensation

United States

$98,138

Florida

$74,758

Arizona

$78,639

Mississippi

$71,851

South Dakota

$75,376

Missouri

$77,734

Louisiana

$78,177

Indiana

$78,694

Tennessee

$78,975

Idaho

$78,126

West Virginia

$75,780

Arkansas

$76,882

Montana

$79,750

Texas

$86,907

South Carolina

$80,454

Kansas

$81,315

Virginia

$89,358

Colorado

$91,385

Maine

$86,019

North Carolina

$82,008

Oklahoma

$81,803

New Hampshire

$93,161

North Dakota

$82,679

Utah

$85,817

Nevada

$87,700

Minnesota

$89,060

New Mexico

$82,809

Kentucky

$81,996

Alabama

$81,826

Nebraska

$85,131

Vermont

$92,796

Hawaii

$106,931

Georgia

$91,297

Wisconsin

$90,521

Iowa

$88,822

Wyoming

$91,002

Oregon

$103,537

Delaware

$99,205

Ohio

$93,007

Michigan

$96,897

Illinois

$104,485

New Jersey

$116,832

Maryland

$112,347

Alaska

$109,855

D.C.

$121,612

Pennsylvania

$107,472

Washington

$119,908

Rhode Island

$114,536

Connecticut

$120,229

California

$129,502

New York

$132,285

Massachusetts

$130,139

[156] The next two footnotes contain studies of teacher work hours from the U.S. Bureau of Labor Statistics. Unlike less rigorous studies of working hours, these studies are based on comprehensive, detailed records. The first of these studies employed field economists to measure actual working hours, as opposed to relying solely upon assigned work schedules. The second study is based on teacher journals of work hours, as opposed to subjective estimates about how long they think they work.

The first study found that full-time public school teachers work an average of 1,405 hours per year and full-time private school teachers work an average of 1,560 hours per year. The second study found that full-time teachers (public and private) work an average of 39.2 hours per week during the weeks in which they work. The U.S. Department of Labor estimates that full-time teachers work an average of 37 or 38 weeks per year. At 39.2 hours per week, this amounts to 1,450 to 1,490 hours per year.

In keeping with Just Facts’ Standards of Credibility, Just Facts is citing the highest of these numbers in order to give “preference to figures that are contrary to our viewpoints.” To triple-check these two studies, Just Facts conducted a detailed time study of a full-time public school teacher. This is shown in the third footnote below.

[157] Report: “National Compensation Survey: Occupational Earnings in the United States, 2010.” U.S. Bureau of Labor Statistics, May 2011. <www.bls.gov>

Page 8:

Survey data were collected over a 13-month period for the 87 larger areas; for the 140 smaller areas, data were collected over a 4-month period. For each establishment in the survey, the data reflect the establishment’s most recent information at the time of collection. The data for the National bulletin were compiled from locality data collected between December 2009 and January 2011. The average reference period is July 2010.

Page 9:

For hourly workers, scheduled hours worked per day and per week, exclusive of overtime, are recorded. For salaried workers, field economists record the typical number of hours actually worked because those exempt from overtime provisions often work beyond the assigned work schedule.

The number of weeks worked annually is determined as well. Because salaried workers who are exempt from overtime provisions often work beyond the assigned work schedule, the typical number of hours they actually worked is collected.

Page 58 (of PDF): “Table 4. Full-time1 private industry workers: Mean and median hourly, weekly, and annual earnings and mean weekly and annual hours … Primary, secondary, and special education school teachers … Annual5 … Mean hours [=] 1,560”

Page 93 (of PDF): “Table 5. Full-time1 State and local government workers: Mean and median hourly, weekly, and annual earnings and mean weekly and annual hours … Primary, secondary, and special education school teachers … Annual … Mean hours [=] 1,405”

[158] Report: “Teachers’ Work Patterns: When, Where, and How Much Do U.S. Teachers Work?” By Rachel Krantz-Kent. U.S. Bureau of Labor Statistics Monthly Labor Review, March 2008. Pages 52–59. <www.bls.gov>

Page 1:

In the ATUS [American Time Use Survey], interviewers collect data in a time diary format, in which survey participants provide information about activities that they engaged in “yesterday.” Because of the way in which the data are collected, it is possible to identify and quantify the work that teachers do at home, at a workplace, and at other locations and to examine the data by day of the week and time of day. Data are available for nearly every day of 2003–06, which is the reference period for this analysis.

In the presentation that follows, “teachers” refers to persons whose main job is teaching preschool-to-high school students. Persons in the “other professionals” occupations also are classified by their main job. With the exception of chart 1, all estimates presented are restricted to persons who were employed during the week prior to their interview and who did some work during that period. Thus, a teacher who was on summer or semester break during the week of the survey is not included in this analysis. Unless otherwise specified, data pertain to persons who work full time; that is, they usually work 35 hours or more per week. Estimates of work hours refer to persons’ main job only.

Page 59: “Full-time teachers worked nearly 3 more hours per day than part-time teachers. On average for all days of the week, full-time teachers worked 5.6 hours per day and part-time teachers worked 2.8 hours per day.”

NOTE: This survey found that during the weeks in which full-time teachers work, they work an average of 5.6 hours per day (including weekends). This amounts to 39.2 hours per week. Per the U.S. Department of Labor, full-time teachers work an average of 37 or 38 weeks per year.† At 39.2 hours per week, this amounts to 1,450 to 1,490 hours per year.

BLS Handbook of Methods. U.S. Bureau of Labor Statistics. Chapter 8: “National Compensation Measures.” Last modified July 10, 2013. <www.bls.gov>. Page 16: “Primary, secondary, and special education teachers typically have a work schedule of 37 or 38 weeks per year.”

[159] To triple-check the two studies above, in April 2015 Just Facts conducted a detailed time study of a full-time public school teacher who works an average of 3.3 hours per workday beyond contractually required work hours. This teacher:

  • arrives at school 20 minutes before the required contract time to set up and plan.
  • stays an extra hour per day after the required contract time to help students.
  • spends an average of two hours per workday grading tests and preparing lessons.
  • coaches two sports teams.

This teacher works 1,516 hours per year not including coaching, 1,759 hours including one sport, and 1,913 hours including two sports. These figures are higher than but consistent with the studies above given the exceptional commitment of this particular teacher. Beyond working 3.3 extra unpaid hours per workday, this teacher earns approximately $16,000 per year in supplemental contracts, as opposed to the national average of $1,170.†

NOTES:

  • † Calculated with data from: “Table 211.10. Average Salaries for Full-Time Teachers in Public and Private Elementary and Secondary Schools, by Selected Characteristics: 2011–12 and 2015–16.” U.S. Department of Education, National Center for Education Statistics, November 2017. <nces.ed.gov>
  • An Excel file containing the data and calculations is available upon request.

[160] Calculated with data from the report: “National Compensation Survey: Occupational Earnings in the United States, 2010.” U.S. Bureau of Labor Statistics, May 2011. <www.bls.gov>

Page 8:

Survey data were collected over a 13-month period for the 87 larger areas; for the 140 smaller areas, data were collected over a 4-month period. For each establishment in the survey, the data reflect the establishment’s most recent information at the time of collection. The data for the National bulletin were compiled from locality data collected between December 2009 and January 2011. The average reference period is July 2010.

Page 9:

For hourly workers, scheduled hours worked per day and per week, exclusive of overtime, are recorded. For salaried workers, field economists record the typical number of hours actually worked because those exempt from overtime provisions often work beyond the assigned work schedule.

The number of weeks worked annually is determined as well. Because salaried workers who are exempt from overtime provisions often work beyond the assigned work schedule, the typical number of hours they actually worked is collected.

Page 49 (of PDF): Table 4. Full-time1 private industry workers: Mean and median hourly, weekly, and annual earnings and mean weekly and annual hours … All workers … Annual … Mean hours [=] 2,045”

CALCULATION: (2,045 hours – 1,490 hours) / 2,045 hours = 27%

[161] Calculated with data from:

a) Dataset: “Table 211.60 Estimated Average Annual Salary of Teachers in Public Elementary and Secondary Schools, by State: Selected Years, 1969–70 Through 2020–21.” U.S. Department of Education, National Center for Education Statistics, August 2021. <nces.ed.gov>

b) Report: “Employer Costs for Employee Compensation, Historical Listing, March 2004–September 2021.” U.S. Bureau of Labor Statistics, December 14, 2021. <www.bls.gov>

Pages 175–177: “Table 7. State and Local Government Workers, by Occupational Group: Employer Costs Per Hours Worked for Employee Compensation and Costs as a Percentage of Total Compensation, Teachers1,2

c) Report: “Real Personal Consumption Expenditures and Personal Income by State, 2020.” U.S. Bureau of Economic Analysis, December 14, 2021. <www.bea.gov>

Page 9 (of PDF): “Table 2. Regional Price Parities and Implicit Regional Price Deflators, by State, 2020”

d) Report: “National Compensation Survey: Occupational Earnings in the United States, 2010.” U.S. Bureau of Labor Statistics, May 2011. <www.bls.gov>

Pages 8, 9, 49, and 93 (of PDF).

NOTE: An Excel file containing the data and calculations is available upon request.

[162] See these four footnotes for documentation that the following items are excluded from employee compensation data published by the Bureau of Labor Statistics:

  • Unfunded pension liabilities
  • Post-employment expenses of worker compensation, such as retirement health benefits

[163] Calculated with data from:

a) Dataset: “Table 211.60 Estimated Average Annual Salary of Teachers in Public Elementary and Secondary Schools, by State: Selected Years, 1969–70 Through 2019–20.” U.S. Department of Education, National Center for Education Statistics, September 2020. <nces.ed.gov>

b) Report: “Employer Costs for Employee Compensation, Historical Listing, March 2004–September 2021.” U.S. Bureau of Labor Statistics, December 14, 2021. <www.bls.gov>

Pages 175–177: “Table 7. State and Local Government Workers, by Occupational Group: Employer Costs Per Hours Worked for Employee Compensation and Costs as a Percentage of Total Compensation, Teachers1,2

c) Report: “Real Personal Consumption Expenditures and Personal Income by State, 2020.” U.S. Bureau of Economic Analysis, December 14, 2021. <www.bea.gov>

Page 9 (of PDF): “Table 2. Regional Price Parities and Implicit Regional Price Deflators, by State, 2020” <www.bea.gov>

d) Report: “National Compensation Survey: Occupational Earnings in the United States, 2010.” U.S. Bureau of Labor Statistics, May 2011. <www.bls.gov>

Pages 8, 9, 49, and 93.

NOTE: An Excel file containing the data and calculations is available upon request.

[164] See these four footnotes for documentation that the following items are excluded from employee compensation data published by the Bureau of Labor Statistics:

  • Unfunded pension liabilities
  • Post-employment expenses of worker compensation, such as retirement health benefits

[165] Calculated with the dataset: “Table 211.10. Average Salaries for Full-Time Teachers in Public and Private Elementary and Secondary Schools, by Selected Characteristics: 2017–18.” U.S. Department of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

“Base salary … Public schools total [=] $57,950 … Private schools total [=] $45,320”

CALCULATION: ($57,950 – $45,320) / $45,320 = 28%

[166] Calculated with data from:

a) Dataset: “Employer Costs Per Hour Worked for Employee Compensation and Costs as a Percent of Total Compensation: Private Industry Teachers, March 2020.” U.S. Bureau of Labor Statistics, National Compensation Survey. Sent to Just Facts on August 26, 2020.

b) Report: “Employer Costs for Employee Compensation, Historical Listing, March 2004–March 2020.” U.S. Bureau of Labor Statistics, June 9, 2020. <www.bls.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[167] The source of the benefits data for teacher compensation is the U.S. Bureau of Labor Statistics’ Employer Costs for Employee Compensation [ECEC] survey. The next three footnotes show that this survey does not capture the costs of retirement health benefits or the unfunded liabilities of pensions.

[168] Paper: “Compensation for State and Local Government Workers.” By Maury Gittleman (U.S. Department of Labor) and Pierce Brooks (U.S. Department of Labor). Journal of Economic Perspectives, Winter 2012. Pages 217–242. <pubs.aeaweb.org>

Appendix (<www.aeaweb.org>): “Note that the ECEC [Employer Expenditures for Employee Compensation] [Employer Expenditures for Employee Compensation] by design excludes retiree health plan costs.”

NOTE: On 12/27/2014, Just Facts wrote to the authors of this paper to confirm the statement above, and the lead author affirmed this is true. He was unable to find an explicit statement from a Bureau of Labor Statistics publication stating that retiree health plan costs are not included in the ECEC, but he wrote, “If one looks at what is explicitly included, however, it is apparent that they are not included in ECEC costs.”

[169] NOTE: The information in the source below implicitly confirms the source above, because it explains that the ECEC measures the costs of employing current employees divided by their working hours. Thus, it does not capture healthcare costs for previous employees (for example, retirees).

Article: “Analyzing Employers’ Costs for Wages, Salaries, and Benefits.” By Felicia Nathan (economist in the Division of Employment Cost Trends, Bureau of Labor Statistics). U.S. Bureau of Labor Statistics Monthly Labor Review, October 1987. <www.bls.gov>

Pages 6–8:

How Compensation Costs Are Calculated

At least two approaches can be taken in measuring an employer’s costs for employee compensation. One approach focuses on past expenditures—that is, the actual money an employer spent on compensation during a specified time, usually a past year. The other approach focuses on current costs—annual costs based on the current price of benefits under current plan provisions. The Bureau’s previous measure of compensation cost levels, the Employer Expenditures for Employee Compensation survey, used the past expenditures approach.5 Because the ECI [Employment Cost Index] measures change from one time to another, it uses the current cost approach.

To estimate the total compensation cost per hour worked, the ECI (1) identifies the benefits provided, (2) determines, from current cost information (current price and current plan provisions), the cost per hour worked for each benefit, then (3) sums the costs for the benefits with the straight-time wage or salary rate. The following examples illustrate how current costs are determined for specific benefit plans, and how they differ from costs based on past expenditures. …

Example 2. A health insurance plan is provided all employees. The monthly premium for each employee is $120 for the first 6 months of a given year, and increases to $140 for the last 6 months. Each employee works 2,000 hours per year. …

In this example, the current cost at any time during the first half of the year is the annual premium divided by the annual hours worked….

Compensation cost levels, however, should reflect the current industry and occupational mix each year they are published. Thus, to estimate current cost levels for the aggregate series, it is necessary to have employment data that refer to the current mix. Such data are obtained by apportioning industry employment from the Bureau’s Current Employment Statistics program, using occupational employment by industry from the ECI sample. Industry employment estimates from the Current Employment Statistics program are published monthly, and are adjusted each year to a universe of all nonfarm establishments from March of the previous year.

5 The Employer Expenditures for Employee Compensation (EEEC) [note the difference from ECEC] survey was discontinued in 1977. While differing from the ECI in that it measured expenditures rather than current costs, the EEEC survey had other characteristics similar to those of the ECI. It covered virtually the same benefits and reported the costs on a work-hour basis. The scope of the EEEC survey was also similar to that of the ECI in that it covered the private nonfarm work force.

[170] Email from the U.S. Bureau of Labor Statistics to Just Facts, May 12, 2015.

For the purposes of NCS [the National Compensation Survey, the source of the Employer Cost for Employee Compensation data†], defined benefit costs are: actual dollar amount an establishment placed in the pension fund from cash, stock, corporate bonds and other financial instrument; Pension Benefit Guaranty Corporation (PBGC) premiums; and administration fees paid to third party administrators (ex. legal, actuary, broker’s). Those costs that are considered out-of-scope for NCS are: actuarial costs (i.e. estimate of current and future obligations); pension benefits paid to retirees; service costs (actuarially determined estimate of employer pension obligations based on benefits earned by employees during the period); and other costs (ex. interest, amortization of prior costs).

NOTE: † Report: “Work Schedules in the National Compensation Survey.” By Richard Schumann. U.S. Bureau of Labor Statistics, July 28, 2008. <www.bls.gov>

Page 1: “The National Compensation Survey (NCS) produces data on occupational earnings, compensation cost trends—the Employment Cost Index (ECI) and the Employer Cost for Employee Compensation (ECEC) series—and benefits.”

[171] See these five footnotes for documentation that:

  • “Defined benefit” pension programs guarantee employees specified levels of benefits, regardless of how much money the employer has previously set aside to pay those benefits.
  • Most government employees receive defined benefit pensions and most private sector employees do not.
  • Many government pension plans are underfunded.

[172] See these two footnotes for documentation that retiree health benefits are common in the government sector and rare in the private sector.

[173] Report: “Work Schedules in the National Compensation Survey.” By Richard Schumann. Bureau of Labor Statistics, July 28, 2008. <www.bls.gov>

Page 1:

Work schedules in the United States are generally viewed as consisting of an 8-hour day and a 40-hour week. But the National Compensation Survey (NCS) covers many occupations that have different types of work schedules: fire fighters, for example, who often work 24 straight hours followed by 48 hours off; truck drivers, many of whom spend days at a time on the road; waiters and waitresses, whose schedules may vary every week; and school teachers, who tend to work many hours at home. Fitting all of these different schedules into a common form for data publication can be challenging.

The National Compensation Survey (NCS) produces data on occupational earnings, compensation cost trends—the Employment Cost Index (ECI) and the Employer Cost for Employee Compensation (ECEC) series—and benefits. The wage and benefit data collected from NCS respondents come in several time frames: hourly, weekly, biweekly, monthly, or annually. Converting the raw data into a common format requires accurate work schedules. This article explains how the NCS calculates these work schedules and the role that they play in the calculation of the published data series.

Definition of the Work Schedule

The NCS work schedule is defined as, “The number of daily hours, weekly hours, and annual weeks that employees in an occupation are scheduled and do work.” The work schedule is the standard schedule for the occupation; short-term fluctuations and one-time events are not considered unless the change becomes permanent. For example, paid or unpaid time off due to a snowstorm would not result in the adjustment of the work schedule because this would not represent a permanent change. Paid lunch periods are included in the work schedule, as is incidental time off, such as coffee breaks, or wash-up time. Vacation, holidays, sick leave, and other kinds of leave hours are included in the work schedule, but they are subtracted when calculating the number of hours worked in a year.

Page 2:

Benefit Costs. The ECI and ECEC publish data for a wide variety of benefits. The costs for these benefits may take different forms, such as monthly premiums, percent of gross earnings, or days of paid leave. These costs must be converted to a common cost form to allow for the calculation of individual benefit and total benefit costs across occupations, industries, and other publication categories in the survey. The NCS uses a cost-per-hour-worked concept as the common cost form. To convert all costs to a per-hour-worked basis, the cost of each benefit is converted to an annual cost and then divided by the number of annual hours worked.

Page 4:

Additional requirements of the job. Professional and managerial employees often work beyond the established work schedule of the employer due to the requirements of their jobs. Because such workers are exempt from the overtime provisions of the Fair Labor Standards Act, employers are not required to compensate them for the additional hours. If the hours worked are not compensated for, then they usually are not recorded. Collection of the actual hours normally worked would be the preferred way of determining the work schedule, but records of hours worked by exempt employees are usually not available. In most cases, the NCS collects the employer’s best estimate of the hours normally worked by exempt employees. If the respondent is unwilling or unable to estimate the hours, then the normal work hours of other employees in the establishment are used.

The actual hours worked by elementary and secondary school teachers (who are exempt) are often not available. Time spent in lesson preparation, test construction and grading, providing additional help to students, and other nonclassroom activities are not available and therefore not recorded. The NCS uses contract hours for teachers in determining the work schedule.12 Contracts usually specify the length of the school day, the number of teaching and required nonteaching days, and the amount of time, if any, teachers are required to be in the school before and after school hours. These hours are used to construct the work schedule. For example, it is common for teacher contracts to specify that teachers will work 185 days per year. In these cases, the daily work schedule would be the length of the school day plus any time teachers are required to be in school before or after the school day, and the weekly work schedule would be the daily schedule multiplied by 5 days (Monday through Friday). The number of weeks would be 37 (185 days ÷ 5 days per week). The time not worked during summer, Christmas break, and spring break would be excluded from the work schedule and would not be considered vacation or holiday. Jobs in schools are not considered to be seasonal.

[174] Report: “National Compensation Survey: Occupational Earnings in the United States, 2010.” U.S. Bureau of Labor Statistics, May 2011. <www.bls.gov>

Page 8:

Survey data were collected over a 13-month period for the 87 larger areas; for the 140 smaller areas, data were collected over a 4-month period. For each establishment in the survey, the data reflect the establishment’s most recent information at the time of collection. The data for the National bulletin were compiled from locality data collected between December 2009 and January 2011. The average reference period is July 2010.

Page 9:

For hourly workers, scheduled hours worked per day and per week, exclusive of overtime, are recorded. For salaried workers, field economists record the typical number of hours actually worked because those exempt from overtime provisions often work beyond the assigned work schedule.

The number of weeks worked annually is determined as well. Because salaried workers who are exempt from overtime provisions often work beyond the assigned work schedule, the typical number of hours they actually worked is collected.

Page 58 (of PDF): “Table 4. Full-time1 private industry workers: Mean and median hourly, weekly, and annual earnings and mean weekly and annual hours … Primary, secondary, and special education school teachers … Annual5 … Mean hours [=] 1,560”

Page 93 (of PDF): “Table 5. Full-time1 State and local government workers: Mean and median hourly, weekly, and annual earnings and mean weekly and annual hours … Primary, secondary, and special education school teachers … Annual … Mean hours [=] 1,405”

CALCULATION: (1,560 – 1,405) / 1,405 = 11%

NOTE: For more details on teacher work hours, click here.

[175] Book: Encyclopedia of Human Services and Diversity. Edited by Linwood H. Cousins. Sage Publications, 2014. Article: “Educational Support Services.” By Stephen T. Schroth (Know College).

Page 447: “All 50 states and the District of Columbia provide public education for children from kindergarten through grade 12. Additionally, many states also fund preschool programs that permit some children as young as 3 years of age to attend classes.”

[176] Dataset: “Table 203.90. Average Daily Attendance (ADA) as a Percentage of Total Enrollment, School Day Length, and School Year Length in Public Schools, by School Level and State: 2007–08 and 2011–12.” U.S. Department of Education, National Center for Education Statistics, May 2013. <nces.ed.gov>

“2011–12 … United States … Average hours in school day [=] 6.7 … Average days in school year [=] 179 … Average hours in school year [=] 1,203”

[177] Calculated with data from:

a) Dataset: “Table 105.20. Enrollment in Elementary, Secondary, and Degree-Granting Postsecondary Institutions, by Level and Control of Institution, Enrollment Level, and Attendance Status and Sex of Student: Selected Years, Fall 1990 Through Fall 2029.” U.S. Department of Education, National Center for Education Statistics, March 2021. <nces.ed.gov>

“Elementary and secondary schools1 … [In thousands] … Projected … 2019 … Public [=] 50,634 … Private2 [=] 5,716 … 1 Includes enrollments in local public school systems and in most private schools (religiously affiliated and nonsectarian). Excludes homeschooled children who were not also enrolled in public and private schools. 2 Private elementary enrollment includes preprimary students in schools offering kindergarten or higher grades.”

b) Dataset: “Table 206.10. Number and Percentage of Homeschooled Students Ages 5 Through 17 with a Grade Equivalent of Kindergarten Through 12th Grade, by Selected Child, Parent, and Household Characteristics: Selected Years, 1999 Through 2019.” U.S. Department of Education, National Center for Education Statistics, December 2021. <nces.ed.gov>

“2019 … Number home-schooled (in thousands) … Total [=] 1,457 … Note: Data in 2019 excludes students who were enrolled in school for more than 24 hours a week…. Data for all years also exclude students who were homeschooled only due to a temporary illness.”

CALCULATIONS:

  • 50,634 public + 5,716 private + 1,457 homeschooled = 57,807 total
  • 50,634 public / 57,807 total = 88%
  • 5,716 private / 57,807 total = 10%
  • 1,457 homeschooled / 57,807 total = 2%

NOTE: The word “approximately” is used because the counts from public and private schools include some preprimary students.

[178] Report: “Documentation to the NCES Common Core of Data Public Elementary/Secondary School Universe Survey: School Year 2010–11, Version Provisional 2a.” U.S. Department of Education, National Center for Education Statistics, September 2012. <nces.ed.gov>

Page C-6: “Elementary A general level of instruction classified by state and local practice as elementary, composed of any span of grades not above grade 8; preschool or kindergarten included only if it is an integral part of an elementary school or a regularly established school system.”

Page C-14: “Secondary The general level of instruction classified by state and local practice as secondary and composed of any span of grades beginning with the next grade following the elementary grades and ending with or below grade 12.”

[179] Dataset: “Table 219.46. Public High School 4-Year Adjusted Cohort Graduation Rate (ACGR), by Selected Student Characteristics and State: 2010–11 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

United States … Total, ACGR for all students … 2018–19 [=] 86 … ACGR for students with selected characteristics,1 2018–19 … White [=] 89 … Black [=] 80 … Hispanic [=] 82 … Asian/Pacific Islander5 … Total [=] 93 … American Indian/Alaska Native [=] 748… The adjusted cohort graduation rate (ACGR) is the percentage of public high school freshmen who graduate with a regular diploma within 4 years of starting 9th grade. Students who are entering 9th grade for the first time form a cohort for the graduating class. This cohort is “adjusted” by adding any students who subsequently transfer into the cohort and subtracting any students who subsequently transfer out, emigrate to another country, or die. Values preceded by the “>=” symbol have been “blurred” (rounded) to protect student privacy. Race categories exclude persons of Hispanic ethnicity.

[180] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Last revised October 8, 2021. <www.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[181] Report: “Income and Poverty in the United States: 2020.” By Emily Shrider and others. U.S. Census Bureau, September 14, 2021. <www.census.gov>

Page 22: “The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as those provided by the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, public housing, employer-provided fringe benefits, tax credits, or stimulus payments.”

Page 25:

Data on income collected in the ASEC [Current Population Survey Annual Social and Economic Supplements] by the U.S. Census Bureau cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Money income also excludes tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and special COVID-19-related stimulus payments. Money income does not reflect that some families receive noncash benefits such as Supplemental Nutrition Assistance/food stamps, health benefits, and subsidized housing. In addition, money income does not reflect that noncash benefits often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries more accurately than other sources of income, and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.

[182] Calculated with data from:

a) “ACT Profile Report – National: Graduating Class 2021.” ACT, September 21, 2021. <www.act.org>

Page 7: “Table 1.1. Five Year Trends—Percent of Students Who Met College Readiness Benchmarks … Number of Students Tested: National … 2021 [=] 1,295,349”

b) Dataset: “Table 122. High School Graduates, by Sex and Control of School: Selected Years, 1869–70 Through 2021–22.” U.S. Department of Education, National Center for Education Statistics, October 2012. <nces.ed.gov>

“School Year … 2020–2110 … Total1 [=] 3,392,510 … 10 Projected”

CALCULATION: 1,295,349 / 3,392,510 = 38%

[183] “ACT Profile Report – National: Graduating Class 2021.” ACT, September 21, 2021. <www.act.org>

Page 7: “Table 1.1. Five Year Trends—Percent of Students Who Met College Readiness Benchmarks … Percent Who Met Benchmarks … 2021 … English [=] 56% … Mathematics [=] 36% … Reading [=] 44% … Science [=] 35% … Met All Four [=] 25%”

[184] “ACT Profile Report – National: Graduating Class 2021.” ACT, September 21, 2021. <www.act.org>

Page 20: “Table 3.3. Percent of Students Who Met ACT College Readiness Benchmark Scores by Race/Ethnicity … All Four % … All Students [=] 25 … Black/African American [=] 6 … American Indian/Alaska Native [=] 7 … White [=] 31 … Hispanic/Latino [=] 14 … Asian [=] 52 … Native Hawaiian/Other Pacific Islander [=] 11”

[185] Calculated with the dataset: “Table 605.10. Gross Domestic Product per Capita and Public and Private Education Expenditures per Full-Time-Equivalent (FTE) Student, by Level of Education and Country: Selected Years, 2005 through 2017.” U.S. Department of Education, National Center for Education Statistics, December 2020. <nces.ed.gov>

“Data adjusted to U.S. dollars by the OECD [Organization for Economic Cooperation and Development] using the purchasing power parity (PPP) index. Constant dollars based on national Consumer Price Indexes….”

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • As of February 25, 2022, this is the latest available data.

[186] Book: Beyond Economic Growth: An Introduction to Sustainable Development (2nd edition). By Tatyana P. Soubbotina. World Bank, 2004. <documents.worldbank.org>

Pages 132–133:

Developed countries (industrial countries, industrially advanced countries). High-income countries, in which most people have a high standard of living. Sometimes also defined as countries with a large stock of physical capital, in which most people undertake highly specialized activities. … Depending on who defines them, developed countries may also include middle-income countries with transition economies, because these countries are highly industrialized. Developed countries contain about 15 percent of the world’s population. They are also sometimes referred to as “the North.”

Page 141:

Organisation for Economic Cooperation and Development (OECD). An organization that coordinates policy mostly among developed countries. OECD member countries exchange economic data and create unified policies to maximize their countries’ economic growth and help nonmember countries develop more rapidly. The OECD arose from the Organisation for European Economic Cooperation (OEEC), which was created in 1948 to administer the Marshall Plan in Europe. In 1960, when the Marshall Plan was completed, Canada, Spain, and the United States joined OEEC members to form the OECD.

[187] Calculated with the dataset: “Table 602.20. Average Fourth-Grade Scores and Annual Instructional Time in Mathematics and Science, by Country or Other Education System: 2015.” U.S. Department of Education, National Center for Education Statistics, December 2016. <nces.ed.gov>

NOTES:

  • As of February 2, 2022, this is the latest available data.
  • An Excel file containing the data and calculations is available upon request.

[188] Calculated with the dataset: “Table 602.40. Average Reading Literacy, Mathematics Literacy, and Science Literacy Scores of 15-Year-Old Students, by Sex and Country or Other Education System: Selected Years, 2009 Through 2018.” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

NOTES:

  • As of February 2, 2022, this is the latest available data.
  • An Excel file containing the data and calculations is available upon request.

[189] Webpage: “Our Global Reach.” Organization for Economic Cooperation and Development. Accessed February 2, 2022 at <www.oecd.org>

“Australia, Austria, Belgium, Canada, Chile, Columbia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea [South], Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States”

[190] Book: Beyond Economic Growth: An Introduction to Sustainable Development (2nd edition). By Tatyana P. Soubbotina. World Bank, 2004. <documents.worldbank.org>

Pages 132–133:

Developed countries (industrial countries, industrially advanced countries). High-income countries, in which most people have a high standard of living. Sometimes also defined as countries with a large stock of physical capital, in which most people undertake highly specialized activities. According to the World Bank classification, these include all high-income economies except Hong Kong (China), Israel, Kuwait, Singapore, and the United Arab Emirates. Depending on who defines them, developed countries may also include middle-income countries with transition economies, because these countries are highly industrialized. Developed countries contain about 15 percent of the world’s population. They are also sometimes referred to as “the North.”

Page 141:

Organisation for Economic Cooperation and Development (OECD). An organization that coordinates policy mostly among developed countries. OECD member countries exchange economic data and create unified policies to maximize their countries’ economic growth and help nonmember countries develop more rapidly. The OECD arose from the Organisation for European Economic Cooperation (OEEC), which was created in 1948 to administer the Marshall Plan in Europe. In 1960, when the Marshall Plan was completed, Canada, Spain, and the United States joined OEEC members to form the OECD.

[191] Dataset: “Table 602.20. Average Fourth-Grade Scores and Annual Instructional Time in Mathematics and Science, by Country or Other Education System: 2015.” U.S. Department of Education, National Center for Education Statistics, December 2016. <nces.ed.gov>

NOTE: As of February 2, 2022, this is the latest available data.

[192] Dataset: “Table 602.40. Average Reading Literacy, Mathematics Literacy, and Science Literacy Scores of 15-Year-Old Students, by Sex and Country or Other Education System: Selected Years, 2009 Through 2018.” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

NOTE: As of February 2, 2022, this is the latest available data.

[193] Calculated with the dataset: “Table 602.10. Average Reading Literacy Scale Scores of Fourth-Graders and Percentage Distribution, by International Benchmark Level and Country or Other Education System: Selected Years, 2001 Through 2016.” U.S. Department of Education, National Center for Education Statistics, November 2017. <nces.ed.gov>

NOTES:

  • As of February 2, 2022, this is the latest available data.
  • An Excel file containing the data and calculations is available upon request.

[194] Calculated with the dataset: “Table 602.40. Average Reading Literacy, Mathematics Literacy, and Science Literacy Scores of 15-Year-Old Students, by Sex and Country or Other Education System: Selected Years, 2009 Through 2018.” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

NOTES:

  • As of February 2, 2022, this is the latest available data.
  • Data for Spain was unavailable for 2018.
  • An Excel file containing the data and calculations is available upon request.

[195] Webpage: “Our Global Reach.” Organization for Economic Cooperation and Development. Accessed February 2, 2022 at <www.oecd.org>

“Australia, Austria, Belgium, Canada, Chile, Columbia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea [South], Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States”

[196] Book: Beyond Economic Growth: An Introduction to Sustainable Development (2nd edition). By Tatyana P. Soubbotina. World Bank, 2004. <documents.worldbank.org>

Pages 132–133:

Developed Countries (Industrial Countries, Industrially Advanced Countries). High-income countries, in which most people have a high standard of living. Sometimes also defined as countries with a large stock of physical capital, in which most people undertake highly specialized activities. According to the World Bank classification, these include all high-income economies except Hong Kong (China), Israel, Kuwait, Singapore, and the United Arab Emirates. Depending on who defines them, developed countries may also include middle-income countries with transition economies, because these countries are highly industrialized. Developed countries contain about 15 percent of the world’s population. They are also sometimes referred to as “the North.”

Page 141:

Organisation for Economic Cooperation and Development (OECD). An organization that coordinates policy mostly among developed countries. OECD member countries exchange economic data and create unified policies to maximize their countries’ economic growth and help nonmember countries develop more rapidly. The OECD arose from the Organisation for European Economic Cooperation (OEEC), which was created in 1948 to administer the Marshall Plan in Europe. In 1960, when the Marshall Plan was completed, Canada, Spain, and the United States joined OEEC members to form the OECD.

[197] Dataset: “Table 602.10. Average Reading Literacy Scale Scores of Fourth-Graders and Percentage Distribution, by International Benchmark Level and Country or Other Education System: Selected Years, 2001 Through 2016.” U.S. Department of Education, National Center for Education Statistics, November 2017. <nces.ed.gov>

NOTE: As of February 2, 2022, this is the latest available data.

[198] Dataset: “Table 602.40. Average Reading Literacy, Mathematics Literacy, and Science Literacy Scores of 15-Year-Old Students, by Sex and Country or Other Education System: Selected Years, 2009 Through 2018.” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

NOTES:

  • As of February 2, 2022, this is the latest available data.
  • Data for Spain was unavailable for 2018.

[199] Article: “U.S. Education Spending Tops Global List, Study Shows.” Associated Press, June 25, 2013. <www.cbsnews.com>

‘When people talk about other countries out-educating the United States, it needs to be remembered that those other nations are out-investing us in education as well,’ said Randi Weingarten, president of the American Federation of Teachers, a labor union.”

[200] Calculated with data from:

a) Dataset: “Table 605.10. Gross Domestic Product Per Capita and Public and Private Education Expenditures Per Full-Time-Equivalent (FTE) Student, by Level of Education and Country: Selected Years, 2005 Through 2013.” U.S. Department of Education, National Center for Education Statistics, January 2017. <nces.ed.gov>

“Data adjusted to U.S. dollars using the purchasing power parity (PPP) index.”

b) Dataset: “Table 602.40. Average Reading Literacy, Mathematics Literacy, and Science Literacy Scores of 15-Year-Old Students, by Sex and Country or Other Education System: 2009, 2012, and 2015.” U.S. Department of Education, National Center for Education Statistics, January 2017. <nces.ed.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Spending data for Canada and Greece were unavailable.

[201] Webpage: “List of OECD Member Countries—Ratification of the Convention on the OECD.” Organization for Economic Cooperation and Development. Accessed December 16, 2016 at <www.oecd.org>

“Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea [South], Latvia, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States”

[202] Book: Beyond Economic Growth: An Introduction to Sustainable Development (2nd edition). By Tatyana P. Soubbotina. World Bank, 2004. <documents.worldbank.org>

Pages 132–133:

Developed Countries (Industrial Countries, Industrially Advanced Countries). High-income countries, in which most people have a high standard of living. Sometimes also defined as countries with a large stock of physical capital, in which most people undertake highly specialized activities. According to the World Bank classification, these include all high-income economies except Hong Kong (China), Israel, Kuwait, Singapore, and the United Arab Emirates. Depending on who defines them, developed countries may also include middle-income countries with transition economies, because these countries are highly industrialized. Developed countries contain about 15 percent of the world’s population. They are also sometimes referred to as “the North.”

Page 141:

Organisation for Economic Cooperation and Development (OECD). An organization that coordinates policy mostly among developed countries. OECD member countries exchange economic data and create unified policies to maximize their countries’ economic growth and help nonmember countries develop more rapidly. The OECD arose from the Organisation for European Economic Cooperation (OEEC), which was created in 1948 to administer the Marshall Plan in Europe. In 1960, when the Marshall Plan was completed, Canada, Spain, and the United States joined OEEC members to form the OECD.

[203] Calculated with data from:

a) Dataset: “Table 605.10. Gross Domestic Product Per Capita and Public and Private Education Expenditures Per Full-Time-Equivalent (FTE) Student, by Level of Education and Country: Selected Years, 2005 Through 2013.” U.S. Department of Education, National Center for Education Statistics, January 2017. <nces.ed.gov>

“Data adjusted to U.S. dollars using the purchasing power parity (PPP) index.”

b) Dataset: “Table 602.40. Average Reading Literacy, Mathematics Literacy, and Science Literacy Scores of 15-Year-Old Students, by Sex and Country or Other Education System: 2009, 2012, and 2015.” U.S. Department of Education, National Center for Education Statistics, January 2017. <nces.ed.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Spending data for Canada and Greece were unavailable.

[204] Webpage: “List of OECD Member Countries—Ratification of the Convention on the OECD.” Organization for Economic Cooperation and Development. Accessed December 16, 2016 at <www.oecd.org>

“Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea [South], Latvia, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States”

[205] Book: Beyond Economic Growth: An Introduction to Sustainable Development (2nd edition). By Tatyana P. Soubbotina. World Bank, 2004. <documents.worldbank.org>

Pages 132–133:

Developed Countries (Industrial Countries, Industrially Advanced Countries). High-income countries, in which most people have a high standard of living. Sometimes also defined as countries with a large stock of physical capital, in which most people undertake highly specialized activities. According to the World Bank classification, these include all high-income economies except Hong Kong (China), Israel, Kuwait, Singapore, and the United Arab Emirates. Depending on who defines them, developed countries may also include middle-income countries with transition economies, because these countries are highly industrialized. Developed countries contain about 15 percent of the world’s population. They are also sometimes referred to as “the North.”

Page 141:

Organisation for Economic Cooperation and Development (OECD). An organization that coordinates policy mostly among developed countries. OECD member countries exchange economic data and create unified policies to maximize their countries’ economic growth and help nonmember countries develop more rapidly. The OECD arose from the Organisation for European Economic Cooperation (OEEC), which was created in 1948 to administer the Marshall Plan in Europe. In 1960, when the Marshall Plan was completed, Canada, Spain, and the United States joined OEEC members to form the OECD.

[206] “Nineteenth Annual Report of the Board of Education of Jersey City, N.J. for the Year Ending November 30, 1885.” Jersey City Board of Education, Department of Public Instruction. Sunday Tattler Print, 1886. <www.google.com>

Page 8:

Cost Per Pupil, Based on Average Attendance, Average Register, Total Enrollment, For the Year …

For all the schools

Average Attendance [=] 14,926

Average Register [=] 16,186

Total Enrollment [=] 24,446

Cost per Pupil, Based on Average Attendance [=] $13.24

Cost per Pupil, Based on Average Register [=] $12.21

Cost per Pupil, Based on Average Total Enrollment [=] $8.09

[207] Webpage: “Consumer Price Index (Estimate) 1800–.” Federal Reserve Bank of Minneapolis. Accessed February 2, 2022 at <www.minneapolisfed.org>

What is $1 in 1850 worth in 2021?

2021 Price = 1850 Price x (2021 CPI / 1850 CPI)

2021 Price = $1 x (815.5 / 25)

2021 Price = $32.62

$1 in 1850 is worth $32.62 in 2021 … *An estimate for 2021 is based on the change in the CPI from second quarter 2020 to second quarter 2021

CALCULATION: $13.24 × $32.62 = $431.89

[208] “Nineteenth Annual Report of the Board of Education of Jersey City, N.J. for the Year Ending November 30, 1885.” By the Jersey City Board of Education, Department of Public Instruction. Sunday Tattler Print, 1886. <www.google.com>

Pages 19–23:

The following is the list of questions used at the last examination for entrance to the High School, and the names and ranks of the successful candidates….

1885 High School Entrance Exam, Page 1
1885 High School Entrance Exam, Page 2
1885 High School Entrance Exam, Page 3
1885 High School Entrance Exam, Page 4
1885 High School Entrance Exam, Page 5
1885 High School Entrance Exam, Page 6
1885 High School Entrance Exam, Page 7
1885 High School Entrance Exam, Page 8
1885 High School Entrance Exam, Page 9

Page 28:

The rules for the Government of the High School provide that all examinations for admission shall be in writing, and shall be conducted by the Principal and Assistant Teachers of the High School under the supervision of the Committee on High School and the School Superintendent. The Committee shall fix a standard for all examinations, which shall not be less than 75 percent of the maximum credits attainable.

[209] Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

Expenditure per pupil in average daily attendance … Constant 2020–21 dollars2 …School year [=] 1919–20 … Total expenditure3 [=] $883 … School year [=] 2018–19 … Total expenditure3 [=] $16,774 …

2 Constant dollars based on the Consumer Price Index, prepared by the Bureau of Labor Statistics, U.S. Department of Labor, adjusted to a school-year basis.

3 Excludes “Other current expenditures,” such as community services, private school programs, adult education, and other programs not allocable to expenditures per student at public schools.

[210] Click here for documentation that the following items are excluded from spending data published by the National Center for Education Statistics:

  • State administration spending
  • Unfunded pension benefits
  • Post-employment non-pension benefits like health insurance

[211] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 2, 2022 at <surveys.nces.ed.gov>

Private for-profit institution A private institution in which the individual(s) or agency in control receives compensation other than wages, rent, or other expenses for the assumption of risk.

Private not-for-profit institution A private institution in which the individual(s) or agency in control receives no compensation, other than wages, rent, or other expenses for the assumption of risk. These include both independent not-for-profit schools and those affiliated with a religious organization.

Public institution An educational institution whose programs and activities are operated by publicly elected or appointed school officials and which is supported primarily by public funds.

[212] Table constructed with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

b) Dataset: “Table 334.30. Total Expenditures of Private Nonprofit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

c) Dataset: “Table 334.50. Total Expenditures of Private For-Profit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

[213] Calculated with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

b) Dataset: “Table 334.30. Total Expenditures of Private Nonprofit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

c) Dataset: “Table 334.50. Total Expenditures of Private for-Profit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[214] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Instruction A functional expense category that includes expenses of the colleges, schools, departments, and other instructional divisions of the institution and expenses for departmental research and public service that are not separately budgeted. Includes general academic instruction, occupational and vocational instruction, community education, preparatory and adult basic education, and regular, special, and extension sessions. Also includes expenses for both credit and non-credit activities. Excludes expenses for academic administration where the primary function is administration (for example, academic deans). Information technology expenses related to instructional activities if the institution separately budgets and expenses information technology resources are included (otherwise these expenses are included in academic support). Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

[215] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Research A functional expense category that includes expenses for activities specifically organized to produce research outcomes and commissioned by an agency either external to the institution or separately budgeted by an organizational unit within the institution. The category includes institutes and research centers, and individual and project research. This function does not include nonresearch sponsored programs (for example, training programs). Also included are information technology expenses related to research activities if the institution separately budgets and expenses information technology resources (otherwise these expenses are included in academic support.) Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

[216] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Public service A functional expense category that includes expenses for activities established primarily to provide noninstructional services beneficial to individuals and groups external to the institution. Examples are conferences, institutes, general advisory service, reference bureaus, and similar services provided to particular sectors of the community. This function includes expenses for community services, cooperative extension services, and public broadcasting services. Also includes information technology expenses related to the public service activities if the institution separately budgets and expenses information technology resources (otherwise these expenses are included in academic support). Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

[217] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Academic support A functional expense category that includes expenses of activities and services that support the institution’s primary missions of instruction, research, and public service. It includes the retention, preservation, and display of educational materials (for example, libraries, museums, and galleries); organized activities that provide support services to the academic functions of the institution (such as a demonstration school associated with a college of education or veterinary and dental clinics if their primary purpose is to support the instructional program); media such as audiovisual services; academic administration (including academic deans but not department chairpersons); and formally organized and separately budgeted academic personnel development and course and curriculum development expenses. Also included are information technology expenses related to academic support activities; if an institution does not separately budget and expense information technology resources, the costs associated with the three primary programs will be applied to this function and the remainder to institutional support. Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

[218] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Student services A functional expense category that includes expenses for admissions, registrar activities, and activities whose primary purpose is to contribute to students emotional and physical well-being and to their intellectual, cultural, and social development outside the context of the formal instructional program. Examples include student activities, cultural events, student newspapers, intramural athletics, student organizations, supplemental instruction outside the normal administration, and student records. Intercollegiate athletics and student health services may also be included except when operated as self-supporting auxiliary enterprises. Also may include information technology expenses related to student service activities if the institution separately budgets and expenses information technology resources (otherwise these expenses are included in institutional support.) Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

[219] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Institutional support A functional expense category that includes expenses for the day-to-day operational support of the institution. Includes expenses for general administrative services, central executive-level activities concerned with management and long range planning, legal and fiscal operations, space management, employee personnel and records, logistical services such as purchasing and printing, and public relations and development. Also includes information technology expenses related to institutional support activities. If an institution does not separately budget and expense information technology resources, the IT costs associated with student services and operation and maintenance of plant will also be applied to this function.

[220] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Auxiliary enterprises expenses Expenses for essentially self-supporting operations of the institution that exist to furnish a service to students, faculty, or staff, and that charge a fee that is directly related to, although not necessarily equal to, the cost of the service. Examples are residence halls, food services, student health services, intercollegiate athletics (only if essentially self-supporting), college unions, college stores, faculty and staff parking, and faculty housing. Institutions include actual or allocated costs for operation and maintenance of plant, interest and depreciation.

Auxiliary enterprises revenues Revenues generated by or collected from the auxiliary enterprise operations of the institution that exist to furnish a service to students, faculty, or staff, and that charge a fee that is directly related to, although not necessarily equal to, the cost of the service. Auxiliary enterprises are managed as essentially self-supporting activities. Examples are residence halls, food services, student health services, intercollegiate athletics, college unions, college stores, and movie theaters.

[221] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Hospital services Expenses associated with a hospital operated by the postsecondary institution (but not as a component unit) and reported as a part of the institution. This classification includes nursing expenses, other professional services, general services, administrative services, and fiscal services. Also included are information technology expenses, actual or allocated costs for operation and maintenance of plant, interest and depreciation related to hospital capital assets.

Hospitals (revenues) Revenues generated by a hospital operated by the postsecondary institution. Includes gifts, grants, appropriations, research revenues, endowment income, and revenues of health clinics that are part of the hospital unless such clinics are part of the student health services program. Sales and service revenues are included net of patient contractual allowances. Revenues associated with the medical school are included elsewhere. Also includes all amounts appropriated by governments (federal, state, local) for the operation of hospitals.

[222] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Net grant aid to students (expenses) The portion of scholarships and fellowships granted by an institution that exceeds the amount applied to institutional charges such as tuition and fees or room and board. The amount reported as expense excludes allowances.”

[223] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Independent operations Expenses associated with operations that are independent of or unrelated to the primary missions of the institution (i.e., instruction, research, public service) although they may contribute indirectly to the enhancement of these programs. This category is generally limited to expenses of a major federally funded research and development center. Also includes information technology expenses, actual or allocated costs for operation and maintenance of plant, interest and depreciation related to the independent operations. Expenses of operations owned and managed as investments of the institution’s endowment funds are excluded.

Independent operations (revenues) Revenues associated with operations independent of or unrelated to the primary missions of the institution (i.e., instruction, research, public service) although they may contribute indirectly to the enhancement of these programs. Generally includes only those revenues associated with major federally funded research and development centers. Net profit (or loss) from operations owned and managed as investments of the institution’s endowment funds is excluded.

[224] Table constructed with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

b) Dataset: “Table 334.30. Total Expenditures of Private Nonprofit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

c) Dataset: “Table 334.50. Total Expenditures of Private For-Profit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

[225] Form: “2018–19 Survey Materials: Finance for Degree-Granting Public Institutions Using GASB [Governmental Accounting Standards Board] Reporting Standards.” National Center for Education Statistics, April 2, 2019. <nces.ed.gov>

Page 31 (of PDF):

Part C-1—Expenses and Other Deductions: Functional Classification

This part is intended to collect expenses by function. …

Include all operating expenses and nonoperating expenses and deductions. … Included are the costs incurred for salaries and wages, goods, and other services used in the conduct of the institution’s operations. Not included is the acquisition cost of capital assets, such as equipment and library books, to the extent the assets are capitalized under the institution’s capitalization policy. …

Operation and maintenance of plant is no longer reported as a separate functional expense category. Instead these expenses are to be distributed among the other functional expense categories.

Page 36 (of PDF):

Glossary

Tangible or intangible assets that are capitalized under an institution’s capitalization policy; some of these assets are subject to depreciation and some are not. These assets consist of land and land improvements, buildings, building improvements, machinery, equipment, infrastructure, and all other assets that are used in operations and that have initial useful lives extending beyond one year. Capital assets also include collections of works of art and historical treasure and library collections; however under certain conditions such collections may not be capitalized. They also include property acquired under capital leases and intangible assets such as patents, copyrights, trademarks, goodwill, and software. Excluded are assets that are part of endowment funds or other capital fund investments in real estate.

[226] Dataset: “Table 3.16. Government Current Expenditures by Function.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 29, 2021. <www.bea.gov>

Line 32: “Education … Higher … 2019 [=] $206.0 [billions dollars]”

[227] Email from the U.S. Bureau of Economic Analysis to Just Facts, June 19, 2015.

As of July 2013, research expenditures are included in the NIPAs [National Income and Product Accounts] as investment. Research conducted by public universities and funded by the federal government or private organizations (or non-profits) are represented as sales of a service for the state and local sector and investment by the federal or private sector. Research funded by a state or local government is recognized as state and local investment, most of it classified as own-account investment.

[228] Email from the U.S. Bureau of Economic Analysis to Just Facts, July 5, 2019

“Line 32 for Higher education does not include spending for university hospitals. That is captured in the health function on line 28.”

[229] Email from the U.S. Bureau of Economic Analysis to Just Facts, June 15, 2015.

“Federal government outlays on loans, including student loans, are typically excluded from BEA’s [Bureau of Economic Analysis] estimates of federal expenditures. Unlike similar estimates—notably, estimates of spending on student loans in the federal budget—BEA excludes both the loan amounts and the subsidy costs of those loans from our estimates.”

[230] Calculated with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

b) Dataset: “Table 334.30. Total Expenditures of Private Nonprofit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

c) Dataset: “Table 334.50. Total Expenditures of Private for-Profit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department Of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

d) Dataset: “Table 3.16. Government Current Expenditures by Function.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 29, 2021. <www.bea.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Functions that contribute directly to the education of students and the general public include instruction, public service, and academic support. See the next footnote for definitions of these functions.
  • For private for-profit colleges, the National Center for Education Statistics does not segregate spending on: (a) public service from research and (b) academic support from institutional support and student services. To estimate spending on these individual functions for private for-profit colleges, Just Facts averaged the respective ratios on these functions from public and private non-profit colleges and applied these ratios to private for-profit colleges.

[231] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022

at <surveys.nces.ed.gov>

Instruction A functional expense category that includes expenses of the colleges, schools, departments, and other instructional divisions of the institution and expenses for departmental research and public service that are not separately budgeted. Includes general academic instruction, occupational and vocational instruction, community education, preparatory and adult basic education, and regular, special, and extension sessions. Also includes expenses for both credit and non-credit activities. Excludes expenses for academic administration where the primary function is administration (for example, academic deans). Information technology expenses related to instructional activities if the institution separately budgets and expenses information technology resources are included (otherwise these expenses are included in academic support). Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

Public service A functional expense category that includes expenses for activities established primarily to provide noninstructional services beneficial to individuals and groups external to the institution. Examples are conferences, institutes, general advisory service, reference bureaus, and similar services provided to particular sectors of the community. This function includes expenses for community services, cooperative extension services, and public broadcasting services. Also includes information technology expenses related to the public service activities if the institution separately budgets and expenses information technology resources (otherwise these expenses are included in academic support). Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

Academic support A functional expense category that includes expenses of activities and services that support the institution’s primary missions of instruction, research, and public service. It includes the retention, preservation, and display of educational materials (for example, libraries, museums, and galleries); organized activities that provide support services to the academic functions of the institution (such as a demonstration school associated with a college of education or veterinary and dental clinics if their primary purpose is to support the instructional program); media such as audiovisual services; academic administration (including academic deans but not department chairpersons); and formally organized and separately budgeted academic personnel development and course and curriculum development expenses. Also included are information technology expenses related to academic support activities; if an institution does not separately budget and expense information technology resources, the costs associated with the three primary programs will be applied to this function and the remainder to institutional support. Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

[232] Form: “2020–21 Survey Materials: Finance for Degree-Granting Public Institutions Using GASB [Governmental Accounting Standards Board] Reporting Standards.” National Center for Education Statistics, December 9, 2021. <nces.ed.gov>

Page 33 (of PDF):

Part C-1—Expenses and Other Deductions: Functional Classification

This part is intended to collect expenses by function. …

Include all operating expenses and nonoperating expenses and deductions. … Included are the costs incurred for salaries and wages, goods, and other services used in the conduct of the institution’s operations. Not included is the acquisition cost of capital assets, such as equipment and library books, to the extent the assets are capitalized under the institution’s capitalization policy. …

Operation and maintenance of plant is no longer reported as a separate functional expense category. Instead these expenses are to be distributed among the other functional expense categories. …

01 Instruction – Expenses of the colleges, schools, departments, and other instructional divisions of the institution and expenses for departmental research and public service that are not separately budgeted should be included in this classification. Include expenses for both credit and noncredit activities. Exclude expenses for academic administration where the primary function is administration (for example, academic deans); such expenses should be reported on line 05. The instruction category includes academic instruction, occupational and vocational instruction, community education, preparatory and adult basic education, and remedial and tutorial instruction conducted by the teaching faculty for the institution’s students. …

03 Public service – Report expenses for all activities budgeted specifically for public service and for activities established primarily to provide noninstructional services beneficial to groups external to the institution. Examples are seminars and projects provided to particular sectors of the community. Include expenditures for community services and cooperative extension services.

05 Academic support – This category includes expenses for the support services that are an integral part of the institution’s primary missions of instruction, research, and public service. Include expenses for museums, libraries, galleries, audio/visual services, ancillary support, academic administration, personnel development, and course and curriculum development. Include expenses for veterinary and dental clinics if their primary purpose is to support the institutional program.

Page 39 (of PDF):

Capital Assets

Tangible or intangible assets that are capitalized under an institution’s capitalization policy; some of these assets are subject to depreciation and some are not. These assets consist of land and land improvements, buildings, building improvements, machinery, equipment, infrastructure, and all other assets that are used in operations and that have initial useful lives extending beyond one year. Capital assets also include collections of works of art and historical treasure and library collections; however under certain conditions such collections may not be capitalized. They also include property acquired under capital leases and intangible assets such as patents, copyrights, trademarks, goodwill, and software. Excluded are assets that are part of endowment funds or other capital fund investments in real estate.

[233] “Glossary: Integrated Postsecondary Education Data System.” U.S. Department of Education, National Center for Education Statistics. Accessed February 8, 2022 at <surveys.nces.ed.gov>

Student services A functional expense category that includes expenses for admissions, registrar activities, and activities whose primary purpose is to contribute to students emotional and physical well-being and to their intellectual, cultural, and social development outside the context of the formal instructional program. Examples include student activities, cultural events, student newspapers, intramural athletics, student organizations, supplemental instruction outside the normal administration, and student records. Intercollegiate athletics and student health services may also be included except when operated as self-supporting auxiliary enterprises. Also may include information technology expenses related to student service activities if the institution separately budgets and expenses information technology resources (otherwise these expenses are included in institutional support.) Institutions include actual or allocated costs for operation and maintenance of plant, interest, and depreciation.

Institutional support A functional expense category that includes expenses for the day-to-day operational support of the institution. Includes expenses for general administrative services, central executive-level activities concerned with management and long range planning, legal and fiscal operations, space management, employee personnel and records, logistical services such as purchasing and printing, and public relations and development. Also includes information technology expenses related to institutional support activities. If an institution does not separately budget and expense information technology resources, the IT costs associated with student services and operation and maintenance of plant will also be applied to this function.

Auxiliary enterprises expenses Expenses for essentially self-supporting operations of the institution that exist to furnish a service to students, faculty, or staff, and that charge a fee that is directly related to, although not necessarily equal to, the cost of the service. Examples are residence halls, food services, student health services, intercollegiate athletics (only if essentially self-supporting), college unions, college stores, faculty and staff parking, and faculty housing. Institutions include actual or allocated costs for operation and maintenance of plant, interest and depreciation.

Auxiliary enterprises revenues Revenues generated by or collected from the auxiliary enterprise operations of the institution that exist to furnish a service to students, faculty, or staff, and that charge a fee that is directly related to, although not necessarily equal to, the cost of the service. Auxiliary enterprises are managed as essentially self-supporting activities. Examples are residence halls, food services, student health services, intercollegiate athletics, college unions, college stores, and movie theaters.

[234] Form: “2020–21 Survey Materials: Finance for Degree-Granting Public Institutions Using GASB [Governmental Accounting Standards Board] Reporting Standards.” National Center for Education Statistics, December 9, 2021. <nces.ed.gov>

Page 33 (of PDF):

Part C-1—Expenses and Other Deductions: Functional Classification

This part is intended to collect expenses by function. …

Include all operating expenses and nonoperating expenses and deductions. … Included are the costs incurred for salaries and wages, goods, and other services used in the conduct of the institution’s operations. Not included is the acquisition cost of capital assets, such as equipment and library books, to the extent the assets are capitalized under the institution’s capitalization policy. …

Operation and maintenance of plant is no longer reported as a separate functional expense category. Instead these expenses are to be distributed among the other functional expense categories. …

01 Instruction – Expenses of the colleges, schools, departments, and other instructional divisions of the institution and expenses for departmental research and public service that are not separately budgeted should be included in this classification. Include expenses for both credit and noncredit activities. Exclude expenses for academic administration where the primary function is administration (for example, academic deans); such expenses should be reported on line 05. The instruction category includes academic instruction, occupational and vocational instruction, community education, preparatory and adult basic education, and remedial and tutorial instruction conducted by the teaching faculty for the institution’s students. …

03 Public service – Report expenses for all activities budgeted specifically for public service and for activities established primarily to provide noninstructional services beneficial to groups external to the institution. Examples are seminars and projects provided to particular sectors of the community. Include expenditures for community services and cooperative extension services.

05 Academic support – This category includes expenses for the support services that are an integral part of the institution’s primary missions of instruction, research, and public service. Include expenses for museums, libraries, galleries, audio/visual services, ancillary support, academic administration, personnel development, and course and curriculum development. Include expenses for veterinary and dental clinics if their primary purpose is to support the institutional program.

Page 39 (of PDF):

Capital Assets

Tangible or intangible assets that are capitalized under an institution’s capitalization policy; some of these assets are subject to depreciation and some are not. These assets consist of land and land improvements, buildings, building improvements, machinery, equipment, infrastructure, and all other assets that are used in operations and that have initial useful lives extending beyond one year. Capital assets also include collections of works of art and historical treasure and library collections; however under certain conditions such collections may not be capitalized. They also include property acquired under capital leases and intangible assets such as patents, copyrights, trademarks, goodwill, and software. Excluded are assets that are part of endowment funds or other capital fund investments in real estate.

[235] Calculated with data from:

a) Dataset: “Table 3.16. Government Current Expenditures by Function.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 29, 2021. <apps.bea.gov>

b) Dataset: “Table 303.10. Total Fall Enrollment in Degree-Granting Postsecondary Institutions, by Attendance Status, Sex of Student, and Control of Institution: Selected Years, 1947 Through 2029.” U.S. Department of Education, National Center for Education Statistics, January 2021. <nces.ed.gov>

c) Dataset: “CPI—All Urban Consumers (Current Series).” U.S. Department of Labor, Bureau of Labor Statistics. Accessed February 5, 2022 at <www.bls.gov>

“Series Id: CUUR0000SA0; Series Title: All Items in U.S. City Average, All Urban Consumers, Not Seasonally Adjusted; Area: U.S. City Average; Item: All Items; Base Period: 1982–84=100”

NOTE: An Excel file containing the data and calculations is available upon request.

[236] Email from the U.S. Bureau of Economic Analysis to Just Facts, June 19, 2015.

As of July 2013, research expenditures are included in the NIPAs [National Income and Product Accounts] as investment. Research conducted by public universities and funded by the federal government or private organizations (or non-profits) are represented as sales of a service for the state and local sector and investment by the federal or private sector. Research funded by a state or local government is recognized as state and local investment, most of it classified as own-account investment.

[237] Email from the U.S. Bureau of Economic Analysis to Just Facts, July 5, 2019

“Line 32 for Higher education does not include spending for university hospitals. That is captured in the health function on line 28.”

[238] Email from the U.S. Bureau of Economic Analysis to Just Facts, June 15, 2015.

“Federal government outlays on loans, including student loans, are typically excluded from BEA’s [Bureau of Economic Analysis] estimates of federal expenditures. Unlike similar estimates—notably, estimates of spending on student loans in the federal budget—BEA excludes both the loan amounts and the subsidy costs of those loans from our estimates.”

[239] Email from the U.S. Department of Education, National Center for Education Statistics to Just Facts, June 10, 2015.

“In reference to table 330.10,† ‘tuition and fees and room and board rates charged’ refer to the published rates that do not include discounts or student financial aid in its calculation.”

NOTE: † Dataset: “Table 330.10. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Level and Control of Institution: Selected Years, 1963–64 Through 2012–13.” U.S. Department of Education, National Center for Education Statistics, March 2014. <nces.ed.gov>

[240] Calculated with the dataset: “Table 330.20. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Control and Level of Institution and State or Jurisdiction: 2018–19 and 2019–20 [in Current Dollars].” U.S. Department of Education, National Center for Education Statistics, April 2021. <nces.ed.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[241] Calculated with data from:

a) Dataset: “Table 330.10. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Level and Control of Institution: Selected Years, 1963–64 Through 2019–20.” U.S. Department of Education, National Center for Education Statistics, January 2021. <nces.ed.gov>

b) Dataset: “Table 236.55. Total and Current Expenditures Per Pupil in Public Elementary and Secondary Schools: Selected Years, 1919–20 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, September 2021. <nces.ed.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[242] Calculated with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

“Total … Expenditure per full-time-equivalent student in constant 2019–20 dollars4 … 2-year … 2018–19 [=] $17,191”

b) Dataset: “Table 330.20. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Control and Level of Institution and State or Jurisdiction: 2018–19 and 2019–20 [in Current Dollars].” U.S. Department of Education, National Center for Education Statistics, April 2021. <nces.ed.gov>

“United States … Public 2-year, tuition and required fees … In-state, 2018–19 [=] $3,312”

CALCULATION: $17,191 / $3,312 = 5.2

NOTE: One of the two datasets above is adjusted for inflation, while the other is not. Since this inflation adjustment is merely for a single year, it does not materially change the ultimate result.

[243] Calculated with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

“Total … Expenditure per full-time-equivalent student in constant 2019–20 dollars4 … 2-year … 2018–19 [=] $17,191”

b) Dataset: “Table 330.20. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Control and Level of Institution and State or Jurisdiction: 2017–8 and 2018–19 [in Current Dollars].” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

“United States … Public 2-year, tuition and required fees … Out-of-state, 2018–19 [=] $7,917”

CALCULATION: $17,191 / $7,917 = 2.2

NOTE: One of the two datasets above is adjusted for inflation, while the other is not. Since this inflation adjustment is merely for a single year, it does not materially change the ultimate result.

[244] Calculated with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

“Total … Expenditure per full-time-equivalent student in constant 2019–20 dollars4 … 4-year … 2018–19 [=] $47,892”

b) Dataset: “Table 330.20. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Control and Level of Institution and State or Jurisdiction: 2017–18 and 2018–19 [in Current Dollars].” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

“United States … Public 4-year … In-state, 2018–19 … Total [=] $20,598”

CALCULATION: $47,892 / $20,598 = 2.3

NOTE: One of the two datasets above is adjusted for inflation, while the other is not. Since this inflation adjustment is merely for a single year, it does not materially change the ultimate result.

[245] Calculated with data from:

a) Dataset: “Table 334.10. Total Expenditures of Public Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: 2009–10 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2020. <nces.ed.gov>

“Total … Expenditure per full-time-equivalent student in constant 2019–20 dollars4 … 4-year … 2018–19 [=] $47,892”

b) Dataset: “Table 330.20. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Control and Level of Institution and State or Jurisdiction: 2017–18 and 2018–19 [in Current Dollars].” U.S. Department of Education, National Center for Education Statistics, December 2019. <nces.ed.gov>

“United States … Public 4-year … In-state, 2018–19 … Room [=] $6,459 … Board [=] $4,927 … Out-of-state tuition and required fees, 2018–19 [=] $26,382”

CALCULATION: $47,892 / ($6,459 + $4,927 + $26,382) = 1.3

NOTE: One of the two datasets above is adjusted for inflation, while the other is not. Since this inflation adjustment is merely for a single year, it does not materially change the ultimate result.

[246] Calculated with data from:

a) Dataset: “Table 334.30. Total Expenditures of Private Nonprofit Degree-Granting Postsecondary Institutions, by Purpose and Level of Institution: Selected Years, 1999–2000 Through 2018–19.” U.S. Department of Education, National Center for Education Statistics, February 2021. <nces.ed.gov>

“Total … Expenditure per full-time-equivalent student in constant 2019–20 dollars3 … 4-year … 2018–19 [=] $63,827”

b) Dataset: “Table 330.20. Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Postsecondary Institutions, by Control and Level of Institution and State or Jurisdiction: 2018–19 and 2019–20 [in Current Dollars].” U.S. Department of Education, National Center for Education Statistics, April 2021. <nces.ed.gov>

“United States … Private 4-year … 2018–19 … Total [=] $44,671”

CALCULATION: $63,827 / $44,671 = 1.4

NOTE: One of the two datasets above is adjusted for inflation, while the other is not. Since this inflation adjustment is merely for a single year, it does not materially change the ultimate result.

[247] Report: “Billions of Dollars in Potentially Erroneous Education Credits Continue to Be Claimed for Ineligible Students and Institutions.” Treasury Inspector General for Tax Administration, March 27, 2015. <www.treasury.gov>

Page 1:

Education tax credits help taxpayers offset the costs of higher education and have become an increasingly important component of Federal higher education policy. The amount of education credits individuals claim each year has increased from more than $3 billion for Tax Year 1998 to almost $19 billion for Tax Year 2012. …

The Taxpayer Relief Act of 19973 created two permanent education tax credits, the Hope Credit and the Lifetime Learning Credit. The American Recovery and Reinvestment Act of 20094 temporarily replaced the Hope Credit with a refundable tax credit5 known as the American Opportunity Tax Credit (AOTC). The AOTC was initially set to expire at the end of Calendar Year 2010 but has since been extended through Calendar Year 2017.

Page 20:

To accomplish our objective, we … identified 12,214,137 taxpayers2 on the IRS Individual Return Transaction File3 who claimed education credits for 13,351,478 students on Tax Year4 2012 returns. We verified the accuracy and reliability of the data obtained by comparing 30 tax returns to return information found on the Integrated Data Retrieval System.5 The data were determined to be sufficiently reliable for the purposes of the audit.

[248] Report: “The Alternative Minimum Tax for Individuals: A Growing Burden.” By Kurt Schuler. U.S. Congress, Joint Economic Committee. May 2001.

<www.jec.senate.gov>

Page 3: “A tax credit is a provision that allows a reduction in tax liability by a specific dollar amount, regardless of income. For example, a tax credit of $500 allows both taxpayers with income of $40,000 and those with income of $80,000 to reduce their taxes by $500, if they qualify for the credit.”

[249] Report: “Overview of the Federal Tax System.” By Molly F. Sherlock and Donald J. Marples. Congressional Research Service, November 21, 2014.

<www.fas.org>

Page 7: “If a tax credit is refundable, and the credit amount exceeds tax liability, a taxpayer receives a payment from the government.”

[250] Report: “Options for Reducing the Deficit: 2015 to 2024.” Congressional Budget Office, November 20, 2014. <www.cbo.gov>

Page 38: “Low- and moderate-income people are eligible for certain refundable tax credits under the individual income tax if they meet specified criteria. If the amount of a refundable tax credit exceeds a taxpayer’s tax liability before that credit is applied, the government pays the excess to that person.”

[251] Report: “Existing Compliance Processes Will Not Reduce the Billions of Dollars in Improper Earned Income Tax Credit and Additional Child Tax Credit Payments.” Treasury Inspector General for Tax Administration, September 29, 2014. <www.treasury.gov>

Page 15:

The Internal Revenue Code requires the IRS to process tax returns and pay any related tax refunds within 45 calendar days of receipt of the tax return or the tax return due date, whichever is later. Because of this requirement, the IRS cannot conduct extensive eligibility checks similar to those that occur with other Federal programs that typically certify eligibility prior to the issuance of payments or benefits.

[252] Report: “Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits.” Treasury Inspector General for Tax Administration, July 7, 2011. <www.justfacts.com>

Page 2:

Two of the largest refundable tax credits are the EITC [Earned Income Tax Credit] and the ACTC [Additional Child Tax Credit]. …

The ACTC is the refundable portion of the Child Tax Credit (CTC). The CTC can reduce an individual’s taxes owed by as much as $1,000 for each qualifying child. The ACTC is provided in addition to the CTC to individuals whose taxes owed were less than the amount of CTC they were entitled to claim. The ACTC is always the refundable portion of the CTC, which means an individual claiming the ACTC receives a refund even if no income tax was withheld or paid. As with all refundable credits, the risk of fraud for these types of claims is significant.

[253] Report: “Billions of Dollars in Potentially Erroneous Education Credits Continue to Be Claimed for Ineligible Students and Institutions.” Treasury Inspector General for Tax Administration, March 27, 2015. <www.treasury.gov>

Page 3:

Prior TIGTA [Treasury Inspector General for Tax Administration] Report Raised Concerns with IRS Efforts to Identify and Prevent Erroneous Education Credit Claims

In September 2011,6 we reported that the IRS does not have effective processes to identify taxpayers who claim erroneous education credits; 2.1 million taxpayers received a total of $3.2 billion in education credits ($1.6 billion in refundable credits and $1.6 billion in nonrefundable credits) that appeared to be erroneous. …

This review was performed with information obtained from the Wage and Investment Division office in Atlanta, Georgia, and the Small Business/Self-Employed Division office in Lanham, Maryland, during the period November 2013 through November 2014. We conducted this performance audit in accordance with generally accepted government auditing standards. …

Page 5:

The IRS does not have effective processes to identify erroneous claims for education credits. Although the IRS has taken steps to address some of our recommendations to improve the identification and prevention of erroneous education credit claims, many of the deficiencies we previously identified still exist. Based on our analysis of education credits claimed and received on Tax Year 2012 tax returns, we estimate more than 3.6 million taxpayers (claiming more than 3.8 million students) received more than $5.6 billion ($2.5 billion in refundable credits and $3.1 billion in nonrefundable credits) in potentially erroneous education credits.

Pages 7–8:

Our analysis of Tax Year 2012 tax returns identified the following education credit claims that appear to be erroneous based on IRS records:

• More than 2 million taxpayers (claiming more than 2.2 million students) who received education credits totaling more than $3.2 billion with no Form 1098-T filed with the IRS by a postsecondary educational institution for the student claimed.16

• More than 1.6 million taxpayers (claiming nearly 1.7 million students) who received education credits totaling approximately $2.5 billion for which Department of Education data show the educational institution listed on the Form 8863 was not certified to receive Federal student aid funding, i.e. not an eligible educational institution. To qualify for an education credit, students must attend a postsecondary educational institution that is certified by the Department of Education to receive Federal student aid funding.

• 427,345 taxpayers (claiming 431,622 students) who received AOTCs [American Opportunity Tax Credit] totaling approximately $662 million for students who, based on Forms 1098-T, did not attend school at least half-time as required.17 Students must attend an eligible institution at least half-time to qualify for the AOTC.

Further analysis of the more than 3.6 million taxpayers we identified showed that 765,943 (21 percent) claimed both a student for which the IRS received no Form 1098-T and listed an ineligible institution on their Form 8863. Figure 6 shows the results of our analysis of taxpayers who received education credits for students with no Form 1098-T or who attended an ineligible institution.

Pages 12–13:

Erroneous American Opportunity Tax Credits Are Being Allowed for Students Claimed for More Than Four Years

Analysis of tax return filings between Tax Years 2007 and 2013 identified 1.1 million students for which the AOTC was claimed for more than four years. Our review of a statistically valid sample of 139 of the 1.1 million students identified that 130 (94 percent) students were erroneously claimed for the AOTC.23 Based on the results of our sample, we estimate that more than 1 million (94 percent) of the more than 1.1 million students we identified were used to receive potentially erroneous AOTCs totaling nearly $1.7 billion.24 Specifically, each of these students were claimed in excess of the four-year limit between Tax Years 2007 and 2013. For Tax Year 2012 alone, we estimate that 419,827 students who had already been claimed in four previous tax years were used to receive potentially erroneous AOTCs totaling more than $650 million.

Page 15:

Potentially Erroneous Education Credits Are Being Received for Students Who Are Incarcerated or of Unlikely Ages to Be Eligible

The IRS has yet to establish effective processes to identify taxpayers who claim potentially erroneous education credits for students who are of an unlikely age to pursue postsecondary education or who are incarcerated. Our review identified:

• 39,763 taxpayers who received more than $61.5 million in potentially erroneous education credits as of December 31, 2013, for 43,800 students who were under age 14 or over age 65. For each of these students, the IRS did not receive a Form 1098-T for the student being claimed.

• 2,148 taxpayers who received potentially erroneous education credits totaling approximately $3.9 million for students who were incarcerated for all of Calendar Year 2012. For each of these students, the IRS did not receive a Form 1098-T for the student being claimed.

Education credit requirements do not require a student to be a specific age to qualify for an education credit, nor do they specify that a student must not be incarcerated. However, both conditions call into question the validity of a taxpayer’s education credit claim. For example, students under the age of 14 or over the age of 65 are not likely to be attending a postsecondary educational institution. In addition, individuals who are incarcerated for a full calendar year are unlikely to meet the requirement that they be a taxpayer’s dependent or incur qualifying educational expenses at an eligible educational institution.

Page 20:

Appendix I Detailed Objective, Scope, and Methodology

Our overall objective was to assess the IRS’s efforts to improve the detection and prevention of questionable education credit claims. We conducted follow-up testing to evaluate the effectiveness of the IRS’s actions to address recommendations made in five prior audit reports.1 To accomplish our objective, we: …

B. Identified 12,214,137 taxpayers2 on the IRS Individual Return Transaction File3 who claimed education credits for 13,351,478 students on Tax Year4 2012 returns. We verified the accuracy and reliability of the data obtained by comparing 30 tax returns to return information found on the Integrated Data Retrieval System.5 The data were determined to be sufficiently reliable for the purposes of the audit.

C. Identified 1,167,119 students for which the AOTC was claimed for more than four tax years between Tax Year 2007 and Tax Year 2013.

Page 25: “Figure 1: Computation of the Average Refundable and Nonrefundable Education Credit Received Per Tax Return … Average Credit Per Tax Return [=] $1,548.90”

[254] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 6:

History of the Student Lending Program

• Student loans are used to finance post-secondary education, which is typically targeted for undergraduate and postgraduate education but also can include eligible vocational or trade schools.

• The U.S. government began offering Federal financing for Institutions of Higher Education (IHE) in 1965 with Title IV of the Higher Education Act (HEA).

[255] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 36:

Types of U.S. Federal Student Loans

Direct, Subsidized Loans. Loan is directly administered by the Federal government and offered only to undergraduate students based on financial need. Interest does not accumulate while the borrower remains in school. The interest rate (2014–15) is 4.66% and the maximum loan balance is $23,000.

Direct, Unsubsidized Loans. Loan is directly administered by the Federal government and offered to both undergraduate and graduate students regardless of need. Interest accumulates while the borrower remains in school. The 2014–15 interest rate for undergraduates is 4.66% and for graduate students is 6.21%. For undergraduate students, the maximum loan balance is $31,000 for dependent students (i.e. supported by parents) and the maximum combined balance of subsidized and unsubsidized Federal loans is $57,500 for independent students. Graduate and professional students have a hard cap of $138,500 balance.

Direct PLUS [Parent Loans for Undergraduate Students] Loans. Loan is directly administered by the Federal government and offered to graduate students and the parents of undergraduate students up to the cost of tuition and living expenses, at an interest rate (2014–15) of 7.21%.

Perkins Loans. Loan is administered by the IHE [Institution of Higher Education] /university. Interest does not accumulate while the borrower remains in school. The 2014–15 rate is 5.0%. The aggregate limit is $27,500 for undergraduate and $60,000 for graduate students (inclusive of the $27,500 as an undergraduate).

Page 37:

Terms of U.S. Federal Student Loans

• Pay rate – Interest rates are fixed over the life of the loan, but are based upon the UST10y rate and a fixed spread – 205bp for undergraduate loans, 360bp for graduate loans and 460bp for PLUS loans. The rates are capped at 8.25% (undergraduate), 9.50% (graduate) and 10.50% (PLUS).

• Maturity – The maturity of student loans is typically 10y but can extend to 25y.

• Repayment – For the most part, Federal student loans are similar to auto loans, with a fixed monthly payment of principal and interest over a ten year term.

[256] Article: “The New Math of Student Loans.” By AnnaMaria Andriotis. Wall Street Journal, June 12, 2015. <www.wsj.com>

[For] undergraduate students with creditworthy parents and graduate students with high credit scores—student loans from private lenders … could help them save thousands of dollars over the life of a loan. …

[Federal student loans don’t] reward parents who have high credit scores and are financially comfortable, because every applicant who gets approved for a federal loan—no matter what their credit score is—ends up with the same interest rate.

By contrast, private loan rates are determined based largely on the applicant or parent’s credit as well as documentation of their income. …

… Beginning July 1, interest rates will be 4.29% for [federal] Stafford loans for undergraduates, down from 4.66%. The rate on the federal PLUS [Parent Loans for Undergraduate Students] loan will be 6.84%, down from 7.21%. …

SunTrust Banks, for example, currently is charging fixed interest rates between 4% and 10.5% on its loans, which range from seven to 15 years. …

Citizens Bank, a unit of Citizens Financial Group, charges interest rates of as little as 5.75% for undergraduate fixed-rate loans.

[257] Article: “Student Loan Delinquencies Surge.” By Emily Dai. Federal Reserve Bank of St. Louis, Inside the Vault, Spring 2013. Pages 1–3. <fraser.stlouisfed.org>

Page 1: “Student loan debt increased significantly over the past few years, almost doubling from half a trillion dollars in 2007 to nearly $1 trillion today. After mortgage debt, it is the largest amount of debt held by U.S. consumers. In contrast, the amount of auto loan and credit card debt held by U.S. consumers today is approximately $783 billion and $679 billion, respectively.”

[258] “Quarterly Report on Household Debt and Credit, 2021:Q4.” Federal Reserve Bank of New York, Research and Statistics Group, Microeconomic Studies, February 2022. <www.newyorkfed.org>

Page 3: “Total Debt Balance and Its Composition” <www.newyorkfed.org>

21:Q4 Debt Balance, Trillions of $

Mortgage

10.93

Student Loan

1.58

Auto Loan

1.46

Credit Card

0.86

Other

0.44

HE [Home Equity] Revolving

0.32

Total

15.58

Page 42:

Loan types. In our analysis we distinguish between the following types of accounts: mortgage accounts, home equity revolving accounts, auto loans and leases, bank card accounts, student loans and other loan accounts. Mortgage accounts include all mortgage installment loans, including first mortgages and home equity installment loans (HEL), both of which are closed-end loans. Home Equity Revolving accounts (aka Home Equity Line of Credit or HELOC), unlike home equity installment loans, are home equity loans with a revolving line of credit where the borrower can choose when and how often to borrow up to an updated credit limit. Auto Loans are loans taken out to purchase a car, including leases, provided by automobile dealers and automobile financing companies. Bankcard accounts (or credit card accounts) are revolving accounts for banks, bankcard companies, national credit card companies, credit unions and savings & loan associations. Student Loans include loans to finance educational expenses provided by banks, credit unions and other financial institutions as well as federal and state governments. The Other category includes Consumer Finance (sales financing, personal loans) and Retail (clothing, grocery, department stores, home furnishings, gas etc) loans.

Our analysis excludes authorized user trades, disputed trades, lost/stolen trades, medical trades, child/family support trades, commercial trades and, as discussed above, inactive trades (accounts not reported on within the last 3 months).

[259] Calculated with data from:

a) Dataset: “Federal Student Loan Portfolio by Loan Status.” National Student Loan Data System. Accessed April 28, 2022 at <studentaid.gov>

Tab: “Federally Managed”

b) “Quarterly Report on Household Debt and Credit, 2021:Q4.” Federal Reserve Bank of New York, Research and Statistics Group, Microeconomic Studies, February 2022. <www.newyorkfed.org>

Page 3 (of PDF): “Outstanding student loan debt stood at $1.58 trillion in the fourth quarter, an $8 billion decline from 2021Q3.”

NOTE: An Excel file containing the data and calculations is available upon request.

[260] Public Law 116-136: “Coronavirus Aid, Relief, and Economic Security Act” (a.k.a. “CARES Act”). 116th U.S. Congress. Signed into Law by Donald J. Trump on March 27, 2020. <www.congress.gov>

Title III, Part IV, Subtitle B, Section 3513:

Temporary Relief for Federal Student Loan Borrowers.

(a) In General.—The Secretary shall suspend all payments due for loans made under part D and part B (that are held by the Department of Education) of title IV of the Higher Education Act of 1965 … through September 30, 2020.

(b) No Accrual of Interest.—Notwithstanding any other provision of the Higher Education Act of 1965 … interest shall not accrue on a loan described under subsection (a) for which payment was suspended for the period of the suspension.

(c) Consideration of Payments.—Notwithstanding any other provision of the Higher Education Act of 1965 … the Secretary shall deem each month for which a loan payment was suspended under this section as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under part D or B of title IV of the Higher Education Act of 1965 … for which the borrower would have otherwise qualified.

(d) Reporting to Consumer Reporting Agencies.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower.

(e) Suspending Involuntary Collection.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall suspend all involuntary collection related to the loan, including—

(1) a wage garnishment authorized under section 488A of the Higher Education Act of 1965 … or section 3720D of title 31, United States Code;

(2) a reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code, or section 6402(d) of the Internal Revenue Code of 1986;

(3) a reduction of any other Federal benefit payment by administrative offset authorized under section 3716 of title 31, United States Code (including a benefit payment due to an individual under the Social Security Act or any other provision described in subsection (c)(3)(A)(i) of such section); and

(4) any other involuntary collection activity by the Secretary.

[261] Press release: “Biden–Harris Administration Extends Student Loan Pause Through May 1, 2022.” U.S. Department of Education, December 22, 2021. <www.ed.gov>

“Today, the U.S. Department of Education announced a 90-day extension of the pause on student loan repayment, interest, and collections through May 1, 2022.”

[262] “Quarterly Report on Household Debt and Credit, 2021:Q4.” Federal Reserve Bank of New York, Research And Statistics Group, Microeconomic Studies, February 2022. <www.newyorkfed.org>

Page 2 (of PDF):

Aggregate delinquency rates were flat in the fourth quarter of 2021 but remain very low, after declining sharply through the beginning of the pandemic. The fourth quarter saw a continued decline in late delinquency offset by a small increase in the share of earlier delinquency. The low delinquency rates have reflected forbearances (provided by both the CARES [Coronavirus Aid, Relief, and Economic Security] Act and voluntarily offered by lenders), which protect borrowers’ credit records from the reporting of skipped or deferred payments but are now winding down. …

Delinquency rates by product continued to decline, and new transitions into delinquency mostly declined across the board. The share of student loans that are reported as delinquent remains very low, as the majority of outstanding federal student loans are covered by CARES Act administrative forbearances, which have been extended through May 2022.

[263] Dataset: “Federally Managed Portfolio by Loan Status.” U.S. Department of Education, National Student Loan Data System. Accessed January 13, 2022 at <studentaid.ed.gov>

Tab: “Loan Status Definitions”

Please Note: Recipient counts are based at the loan level. As a result, recipients may be counted multiple times across varying loan statuses. …

In-School – Includes loans that have never entered repayment as a result of the borrower’s enrollment in school.

Grace – Includes loans that have entered a six-month grace period after the borrower is no longer enrolled in school at least half-time. Borrowers are not expected to make payments during grace.

Repayment – Includes loans that are in an active repayment status.

Deferment – Includes loans in which payments have been postponed as a result of certain circumstances such as returning to school, military service, or economic hardship.

Forbearance – Includes loans in which payments have been temporary suspended or reduced as a result of certain types of financial hardships.

Cumulative in Default – Includes loans that are more than 360 days delinquent.

Other – Includes loans that are in non-defaulted bankruptcy and in a disability status.

[264] “Quarterly Report on Household Debt and Credit, 2021:Q3.” Federal Reserve Bank of New York, Research And Statistics Group, Microeconomic Studies, November 2021. <www.newyorkfed.org>

Page 2 (of PDF):

Aggregate delinquency rates have remained low and declining since the beginning of the pandemic, reflecting an uptake in forbearances (provided by both the CARES [Coronavirus Aid, Relief, and Economic Security] Act and voluntarily offered by lenders), which protect borrowers’ credit records from the reporting of skipped or deferred payments. …

Delinquency rates by product continued to decline, and new transitions into delinquency mostly declined across the board, continuing to reflect ongoing participation in various borrower assistance programs. The share of student loans that are reported as delinquent remains very low, as the majority of outstanding federal student loans are covered by CARES Act administrative forbearances. Auto loans and credit cards also showed continued declines in their delinquency transition rates, reflecting the persistent impact of government stimulus programs and bank-offered forbearance options for troubled borrowers.

[265] Public Law 116-136: “Coronavirus Aid, Relief, and Economic Security Act” (a.k.a. “CARES Act”). 116th U.S. Congress. Signed into Law by Donald J. Trump on March 27, 2020. <www.congress.gov>

Title III, Part IV, Subtitle B, Section 3513:

Temporary Relief for Federal Student Loan Borrowers.

(a) In General.—The Secretary shall suspend all payments due for loans made under part D and part B (that are held by the Department of Education) of title IV of the Higher Education Act of 1965 … through September 30, 2020.

(b) No Accrual of Interest.—Notwithstanding any other provision of the Higher Education Act of 1965 … interest shall not accrue on a loan described under subsection (a) for which payment was suspended for the period of the suspension.

(c) Consideration of Payments.—Notwithstanding any other provision of the Higher Education Act of 1965 … the Secretary shall deem each month for which a loan payment was suspended under this section as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under part D or B of title IV of the Higher Education Act of 1965 … for which the borrower would have otherwise qualified.

(d) Reporting to Consumer Reporting Agencies.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower.

(e) Suspending Involuntary Collection.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall suspend all involuntary collection related to the loan, including—

(1) a wage garnishment authorized under section 488A of the Higher Education Act of 1965 … or section 3720D of title 31, United States Code;

(2) a reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code, or section 6402(d) of the Internal Revenue Code of 1986;

(3) a reduction of any other Federal benefit payment by administrative offset authorized under section 3716 of title 31, United States Code (including a benefit payment due to an individual under the Social Security Act or any other provision described in subsection (c)(3)(A)(i) of such section); and

(4) any other involuntary collection activity by the Secretary.

[266] Calculated with data from:

a) Dataset: “Federal Student Loan Portfolio by Loan Status.” National Student Loan Data System. Accessed April 28, 2022 at <studentaid.gov>

Tab: “Federally Managed”

b) “Quarterly Report on Household Debt and Credit, 2021:Q4.” Federal Reserve Bank of New York, Research and Statistics Group, Microeconomic Studies, February 2022. <www.newyorkfed.org>

Page 3 (of PDF): “Outstanding student loan debt stood at $1.58 trillion in the fourth quarter, an $8 billion decline from 2021Q3.”

NOTE: An Excel file containing the data and calculations is available upon request.

[267] Dataset: “Federally Managed Portfolio by Loan Status.” U.S. Department of Education, National Student Loan Data System. Accessed January 13, 2022 at <studentaid.ed.gov>

Tab: “Loan Status Definitions”

Please Note: Recipient counts are based at the loan level. As a result, recipients may be counted multiple times across varying loan statuses. …

In-School – Includes loans that have never entered repayment as a result of the borrower’s enrollment in school.

Grace – Includes loans that have entered a six-month grace period after the borrower is no longer enrolled in school at least half-time. Borrowers are not expected to make payments during grace.

Repayment – Includes loans that are in an active repayment status.

Deferment – Includes loans in which payments have been postponed as a result of certain circumstances such as returning to school, military service, or economic hardship.

Forbearance – Includes loans in which payments have been temporary suspended or reduced as a result of certain types of financial hardships.

Cumulative in Default – Includes loans that are more than 360 days delinquent.

Other – Includes loans that are in non-defaulted bankruptcy and in a disability status.

[268] “Quarterly Report on Household Debt and Credit, 2021:Q3.” Federal Reserve Bank of New York, Research And Statistics Group, Microeconomic Studies, November 2021. <www.newyorkfed.org>

Page 2 (of PDF):

Aggregate delinquency rates have remained low and declining since the beginning of the pandemic, reflecting an uptake in forbearances (provided by both the CARES [Coronavirus Aid, Relief, and Economic Security] Act and voluntarily offered by lenders), which protect borrowers’ credit records from the reporting of skipped or deferred payments. …

Delinquency rates by product continued to decline, and new transitions into delinquency mostly declined across the board, continuing to reflect ongoing participation in various borrower assistance programs. The share of student loans that are reported as delinquent remains very low, as the majority of outstanding federal student loans are covered by CARES Act administrative forbearances. Auto loans and credit cards also showed continued declines in their delinquency transition rates, reflecting the persistent impact of government stimulus programs and bank-offered forbearance options for troubled borrowers.

[269] Public Law 116-136: “Coronavirus Aid, Relief, and Economic Security Act” (a.k.a. “CARES Act”). 116th U.S. Congress. Signed into Law by Donald J. Trump on March 27, 2020. <www.congress.gov>

Title III, Part IV, Subtitle B, Section 3513:

Temporary Relief for Federal Student Loan Borrowers.

(a) In General.—The Secretary shall suspend all payments due for loans made under part D and part B (that are held by the Department of Education) of title IV of the Higher Education Act of 1965 … through September 30, 2020.

(b) No Accrual of Interest.—Notwithstanding any other provision of the Higher Education Act of 1965 … interest shall not accrue on a loan described under subsection (a) for which payment was suspended for the period of the suspension.

(c) Consideration of Payments.—Notwithstanding any other provision of the Higher Education Act of 1965 … the Secretary shall deem each month for which a loan payment was suspended under this section as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under part D or B of title IV of the Higher Education Act of 1965 … for which the borrower would have otherwise qualified.

(d) Reporting to Consumer Reporting Agencies.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower.

(e) Suspending Involuntary Collection.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall suspend all involuntary collection related to the loan, including—

(1) a wage garnishment authorized under section 488A of the Higher Education Act of 1965 … or section 3720D of title 31, United States Code;

(2) a reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code, or section 6402(d) of the Internal Revenue Code of 1986;

(3) a reduction of any other Federal benefit payment by administrative offset authorized under section 3716 of title 31, United States Code (including a benefit payment due to an individual under the Social Security Act or any other provision described in subsection (c)(3)(A)(i) of such section); and

(4) any other involuntary collection activity by the Secretary.

[270] Press release: “Biden–Harris Administration Extends Student Loan Pause Through August 31.” U.S. Department of Education, April 6, 2022. <www.ed.gov>

“Today, the U.S. Department of Education (Department) announced an extension of the pause on student loan repayment, interest, and collections through August 31, 2022.”

[271] “Fiscal Year 2014 Financial Report of the United States Government.” U.S. Department of the Treasury, February 26, 2015. <fiscal.treasury.gov>

Page 71:

For those unable to afford credit at the market rate, federal credit programs provide subsidies in the form of direct loans offered at an interest rate lower than the market rate. For those to whom non-federal financial institutions are reluctant to grant credit because of the high risk involved, federal credit programs guarantee the payment of these non-federal loans and absorb the cost of defaults.

Page 72:

The majority of the loan programs are provided by Education, HUD [Department of Housing and Urban Development], USDA [Department of Agriculture], Treasury, Small Business Administration (SBA), VA [Veterans Affairs], Export-Import Bank and United States Agency for International Development (USAID). For significant detailed information regarding the direct and guaranteed loan programs listed in the tables above, please refer to the financial statements of the agencies.

[272] Report: “Fair-Value Accounting for Federal Credit Programs.” U.S. Congressional Budget Office, March 2012. <www.cbo.gov>

Page 2:

Market risk is the component of financial risk that remains even after investors have diversified their portfolios as much as possible; it arises from shifts in macroeconomic conditions, such as productivity and employment, and from changes in expectations about future macroeconomic conditions. Loans and loan guarantees expose the government to market risk because future repayments of loans tend to be lower when the economy as a whole is performing poorly and resources are more highly valued.

Page 7: “When the government extends credit, the associated market risk of those obligations is effectively passed along to citizens who, as investors, would view that risk as costly.”

[273] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 4:

A key concern is that students are taking on student loans because historically an education has been correlated with economic mobility; however, today an average of 40% of students at four-year institutions (and 68% of students in for-profit institutions) do not graduate within six years,1 which means they most likely do not benefit from the income upside from a higher degree yet have the burden of student debt. …

1 National Center for Education Statistics. Based on graduation rates of Bachelor’s Degree-Seeking Students at 4-Year Postsecondary Institutions (cohort entry year: 2006).

Page 21:

Failure-to-graduate remains the most deadly of traps for higher education. As shown in the following Graphs 8, 9 and 10, the marginal benefit of higher education is clear in terms of lifetime earnings and better employment stability. Failure-to-graduate combined with leverage is a poor mix: the debt burden remains but very little of the economic benefits accrue. Whatever the reasons that the student failed-to-graduate, he or she is left with all of the downside and limited upside.

[274] Curriculum Vitae: “Deborah J. Lucas.” MIT Sloan School of Management, February 2014. <dlucas.scripts.mit.edu>

Sloan Distinguished Professor of Finance, Sloan School of Management, 2011–present

Assistant Director, Financial Analysis Division, Congressional Budget Office 2010–2011

Associate Director of Financial Studies, Congressional Budget Office 2009–2010

Professor of Finance, Sloan School of Management, 2009–2011 (on leave)

Donald C. Clark HSBC Professor of Consumer Finance, Department of Finance, Kellogg School of Management, Northwestern University, 1996–2009.

Chief Economist, Congressional Budget Office, 2000–2001.

Member, Social Security Technical Advisory Panel, 1999–2000, and 2006–2007.

Chairman, Department of Finance, Kellogg School of Management, 1996–1998.

John L. and Helen Kellogg Distinguished Associate Professor, Department of Finance, Kellogg School of Management, Northwestern University. 1992–1996.

NBER Research Associate, 1998–present.

NBER Faculty Research Fellow, 1992–1998.

Senior Staff Economist, Council of Economic Advisers, Washington, D.C., 1992–1993.

Assistant Professor, Department of Finance, J.L. Kellogg School of Management, Northwestern University, 1985–1992.

Visiting Assistant Professor, Department of Finance, Sloan School of Management, Massachusetts Institute of Technology, 1990–1991.

[275] Book: Public Economics in the United States: How the Federal Government Analyzes and Influences the Economy. Edited by Steven Payson. ABC-CLIO, 2014.

Chapter 15: “Federal Credit Programs.” By Deborah Lucas (Director, MIT Center for Finance and Policy). Pages 375–398.

Page 394:

The government delivers subsidies in a variety of forms, for example, using cash grants, or in-kind assistance such as free vaccinations. Government credit that is offered at a below-market price to beneficiaries similarly provides a subsidy. …

Government credit programs may have adverse consequences that must be weighed against their expected benefits. One concern is that credit subsidies will distort the allocation of capital in the economy and crowd out productive investments by households and firms. For example, subsidizing mortgages guarantees increases the demand for housing, causing more savings to be invested in residential construction. That leaves fewer resources available for other investment activities, and puts upward pressure on the interest rates facing all borrowers.

Easier access to credit markets is not always advantageous to program participants. Unsophisticated borrowers, such as some college students and first-time homebuyers, may not be fully aware of the costs and risks associated with accumulating high debt loans. Consumer protection and disclosure laws usually do not extend to the government, and there is the possibility that it will inadvertently offer poorly designed products that can harm consumers. …

A well-understood consequence of government credit provision is that it tends to create incentives for greater risk taking, particularly when a borrower becomes financially distressed. The reason is that a debtor with a guaranteed debt benefits from the upside if a gamble pays off, whereas the government shares in the losses if the gamble fails. (The effect is less pronounced for loans obtained privately because financial institutions charge interest rates that increase with risk, which discourages excessive risk taking.)

[276] “Remarks at Southwest Texas State College Upon Signing the Higher Education Act of 1965.” By Lyndon B. Johnson, November 8, 1965. <www.presidency.ucsb.edu>

In a very few moments, I will put my signature on the Higher Education Act of 1965. The President’s signature upon this legislation passed by this Congress will swing open a new door for the young people of America. For them, and for this entire land of ours, it is the most important door that will ever open—the door to education. …

This bill is only one of more than two dozen education measures enacted by the first session of the 89th Congress. And history will forever record that this session—the first session of the 89th Congress—did more for the wonderful cause of education in America than all the previous 176 regular sessions of Congress did, put together.

[277] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 6:

History of the Student Lending Program

• Student loans are used to finance post-secondary education, which is typically targeted for undergraduate and postgraduate education but also can include eligible vocational or trade schools.

• The U.S. government began offering Federal financing for Institutions of Higher Education (IHE) in 1965 with Title IV of the Higher Education Act (HEA).

[278] “Fiscal Year 2014 Financial Report of the United States Government.” U.S. Department of the Treasury, February 26, 2015. <fiscal.treasury.gov>

Page 71: “For those to whom non-federal financial institutions are reluctant to grant credit because of the high risk involved, federal credit programs guarantee the payment of these non-federal loans and absorb the cost of defaults.”

Page 72: “[T]he Federal Family Education Loan (FFEL) Program … was established in fiscal year 1965, and is a guaranteed loan program.”

[279] Report: “Federal Family Education Loan Program’s Financial Statements for Fiscal Years 1993 and 1992.” U.S. General Accounting Office, June 1994. <www.gao.gov>

Page 65:

On August 10,1993, President Clinton signed the Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66). A portion of that Act entitled “The Student Loan Reform Act of 1993” requires the phase-in of federal direct student lending. Direct student lending, as a percentage of new student loan volume will be phased in over five years as follows:

Academic Year

Percent

1994–95

5%

1995–96

40%

1996–97

at least 50%

1997–98

at least 50%

1998–99

at least 60%

The Student Loan Reform Act of 1993 ensures adequate financing for the current guaranty agencies during the transition and provides for alternative mechanisms to assure loan guarantees in the event that any of the guaranty agencies do not continue to operate. The implementation plans for the new direct loan program provide for Education’s cost of transitioning outstanding guaranteed loans, therefore no provision for such cost has been included in the principal statements.

[280] Calculated with data from:

a) Vote 406: “Omnibus Budget Reconciliation Act of 1993.” U.S. House of Representatives, August 5, 1993. <clerk.house.gov>

b) Vote 247: “Omnibus Budget Reconciliation Act of 1993.” U.S. Senate, August 6, 1993. <www.senate.gov>

Party

Voted “Yes”

Voted “No”

Voted “Present” or Did Not Vote †

Number

Portion

Number

Portion

Number

Portion

Republican

0

0%

219

100%

0

0%

Democrat

267

85%

47

15%

0

0%

Independent

1

100%

0

0%

0

0%

NOTE: † Voting “Present” is effectively the same as not voting.

[281] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 3: “[T]he Student Aid and Fiscal Responsibility Act (SAFRA) of 2010 ceased the origination of federal student loans by private lenders and as of July 1, 2010, all federal student loans are made directly by the Department of Education and funded by the U.S. Treasury Department.”

[282] “Fiscal Year 2012 Financial Report of the United States Government.” U.S. Department of the Treasury, January, 17, 2013. <fiscal.treasury.gov>

Page 69: “The Student Aid and Fiscal Responsibility Act (SAFRA), which was enacted as part of the Health Care Education and Reconciliation Act of 2010 (Public Law 111-152), eliminated the authority to guarantee new FFEL [Federal Family Education Loans] after June 30, 2010.”

[283] Public Law 111-152: “Health Care and Education Reconciliation Act of 2010.” 111th U.S. Congress. Signed into law by Barack Obama on March 30, 2010. <www.govinfo.gov>

PART II—Student Loan Reform

Sec. 2201. Termination of Federal Family Education Loan appropriations.

Sec. 2202. Termination of Federal loan insurance program.

Sec. 2203. Termination of applicable interest rates.

Sec. 2204. Termination of Federal payments to reduce student interest costs.

Sec. 2205. Termination of FFEL [Federal Family Education Loans] PLUS [Parent Loans for Undergraduate Students] Loans.

Sec. 2206. Federal Consolidation Loans.

Sec. 2207. Termination of Unsubsidized Stafford Loans for middle-income borrowers.

Sec. 2208. Termination of special allowances.

Sec. 2209. Origination of Direct Loans at institutions outside the United States.

Sec. 2210. Conforming amendments.

Sec. 2211. Terms and conditions of loans.

Sec. 2212. Contracts; mandatory funds.

Sec. 2213. Income-based repayment.

[284] Calculated with data from:

a) Vote 194: “Health Care and Education Reconciliation Act of 2010.” U.S. House of Representatives, March 25, 2010. <clerk.house.gov>

b) Vote 105: “Health Care and Education Reconciliation Act of 2010.” U.S. Senate, March 25, 2010. <www.senate.gov>

Party

Voted “Yes”

Voted “No”

Voted “Present” or Did Not Vote †

Number

Portion

Number

Portion

Number

Portion

Republican

0

0%

215

99%

3

1%

Democrat

275

88%

35

11%

1

0%

Independent

1

100%

0

0%

0

0%

NOTE: † Voting “Present” is effectively the same as not voting.

[285] Calculated with data from:

a) “Quarterly Report on Household Debt and Credit, 2021:Q4.” Federal Reserve Bank of New York, Research and Statistics Group, Microeconomic Studies, February 2022. <www.newyorkfed.org>

Page 3: “Total Debt Balance and Its Composition” <www.newyorkfed.org>

b) Dataset: “CPI—All Urban Consumers (Current Series).” U.S. Department of Labor, Bureau of Labor Statistics. Accessed January 18, 2022 at <www.bls.gov>

“Series Id: CUUR0000SA0; Series Title: All Items in U.S. City Average, All Urban Consumers, Not Seasonally Adjusted; Area: U.S. City Average; Item: All Items; Base Period: 1982–84=100”

NOTE: An Excel file containing the data and calculations is available upon request.

[286] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 3: “[T]he Student Aid and Fiscal Responsibility Act (SAFRA) of 2010 ceased the origination of federal student loans by private lenders and as of July 1, 2010, all federal student loans are made directly by the Department of Education and funded by the U.S. Treasury Department.”

[287] “WHO Director-General’s Opening Remarks at the Media Briefing on Covid-19.” World Health Organization, March 11, 2020. <bit.ly>

[Dr. Tedros Adhanom Ghebreyesus:] …

WHO has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction.

We have therefore made the assessment that COVID-19 can be characterized as a pandemic.

[288] Article: “Student Loan Delinquencies Surge.” By Emily Dai. Federal Reserve Bank of St. Louis, Inside the Vault, Spring 2013. Pages 1–3. <fraser.stlouisfed.org>

Page 1:

In the third quarter of 2012, the share of delinquent student loan balances exceeded the share of delinquent credit card balances, according to the Federal Reserve Bank of New York’s Consumer Credit Panel and to Equifax.2 This is the first such occurrence since 2003, when reliable data became available.3 In the fourth quarter of 2012, the share of delinquent student loan balances continued to rise.

2 “Delinquent” here refers to balances past due for 90 days or more.

3 The data were first captured by Equifax in 2003 and first reported in 2010 in the Federal Reserve Bank of New York’s Household Debt and Credit Report.

[289] “Quarterly Report on Household Debt and Credit, 2021:Q3.” Federal Reserve Bank of New York, Research And Statistics Group, Microeconomic Studies, November 2021. <www.newyorkfed.org>

Page 2 (of PDF):

Aggregate delinquency rates have remained low and declining since the beginning of the pandemic, reflecting an uptake in forbearances (provided by both the CARES [Coronavirus Aid, Relief, and Economic Security] Act and voluntarily offered by lenders), which protect borrowers’ credit records from the reporting of skipped or deferred payments. …

Delinquency rates by product continued to decline, and new transitions into delinquency mostly declined across the board, continuing to reflect ongoing participation in various borrower assistance programs. The share of student loans that are reported as delinquent remains very low, as the majority of outstanding federal student loans are covered by CARES Act administrative forbearances. Auto loans and credit cards also showed continued declines in their delinquency transition rates, reflecting the persistent impact of government stimulus programs and bank-offered forbearance options for troubled borrowers.

[290] Public Law 116-136: “Coronavirus Aid, Relief, and Economic Security Act” (a.k.a. “CARES Act”). 116th U.S. Congress. Signed into Law by Donald J. Trump on March 27, 2020. <www.congress.gov>

Title III, Part IV, Subtitle B, Section 3513:

Temporary Relief for Federal Student Loan Borrowers.

(a) In General.—The Secretary shall suspend all payments due for loans made under part D and part B (that are held by the Department of Education) of title IV of the Higher Education Act of 1965 … through September 30, 2020.

(b) No Accrual of Interest.—Notwithstanding any other provision of the Higher Education Act of 1965 … interest shall not accrue on a loan described under subsection (a) for which payment was suspended for the period of the suspension.

(c) Consideration of Payments.—Notwithstanding any other provision of the Higher Education Act of 1965 … the Secretary shall deem each month for which a loan payment was suspended under this section as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under part D or B of title IV of the Higher Education Act of 1965 … for which the borrower would have otherwise qualified.

(d) Reporting to Consumer Reporting Agencies.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower.

(e) Suspending Involuntary Collection.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall suspend all involuntary collection related to the loan, including—

(1) a wage garnishment authorized under section 488A of the Higher Education Act of 1965 … or section 3720D of title 31, United States Code;

(2) a reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code, or section 6402(d) of the Internal Revenue Code of 1986;

(3) a reduction of any other Federal benefit payment by administrative offset authorized under section 3716 of title 31, United States Code (including a benefit payment due to an individual under the Social Security Act or any other provision described in subsection (c)(3)(A)(i) of such section); and

(4) any other involuntary collection activity by the Secretary.

[291] Press release: “Biden–Harris Administration Extends Student Loan Pause Through August 31.” U.S. Department of Education, April 6, 2022. <www.ed.gov>

“Today, the U.S. Department of Education (Department) announced an extension of the pause on student loan repayment, interest, and collections through August 31, 2022.”

[292] “Quarterly Report on Household Debt and Credit, 2021:Q3.” Federal Reserve Bank of New York, Research and Statistics Group, Microeconomic Studies, November 2021. <www.newyorkfed.org>

Page 3: “Total Debt Balance and Its Composition” <www.newyorkfed.org>

Page 42:

Loan types. In our analysis we distinguish between the following types of accounts: mortgage accounts, home equity revolving accounts, auto loans and leases, bank card accounts, student loans and other loan accounts. Mortgage accounts include all mortgage installment loans, including first mortgages and home equity installment loans (HEL), both of which are closed-end loans. Home Equity Revolving accounts (aka Home Equity Line of Credit or HELOC), unlike home equity installment loans, are home equity loans with a revolving line of credit where the borrower can choose when and how often to borrow up to an updated credit limit. Auto Loans are loans taken out to purchase a car, including leases, provided by automobile dealers and automobile financing companies. Bankcard accounts (or credit card accounts) are revolving accounts for banks, bankcard companies, national credit card companies, credit unions and savings & loan associations. Student Loans include loans to finance educational expenses provided by banks, credit unions and other financial institutions as well as federal and state governments. The Other category includes Consumer Finance (sales financing, personal loans) and Retail (clothing, grocery, department stores, home furnishings, gas etc) loans.

Our analysis excludes authorized user trades, disputed trades, lost/stolen trades, medical trades, child/family support trades, commercial trades and, as discussed above, inactive trades (accounts not reported on within the last 3 months).

NOTE: An Excel file containing the data is available upon request.

[293] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 3: “[T]he Student Aid and Fiscal Responsibility Act (SAFRA) of 2010 ceased the origination of federal student loans by private lenders and as of July 1, 2010, all federal student loans are made directly by the Department of Education and funded by the U.S. Treasury Department.”

[294] “WHO Director-General’s Opening Remarks at the Media Briefing on Covid-19.” World Health Organization, March 11, 2020. <bit.ly>

[Dr. Tedros Adhanom Ghebreyesus:] …

WHO has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction.

We have therefore made the assessment that COVID-19 can be characterized as a pandemic.

[295] Public Law 116-136: “Coronavirus Aid, Relief, and Economic Security Act” (a.k.a. “CARES Act”). 116th U.S. Congress. Signed into Law by Donald J. Trump on March 27, 2020. <www.congress.gov>

Title III, Part IV, Subtitle B, Section 3513:

Temporary Relief for Federal Student Loan Borrowers.

(a) In General.—The Secretary shall suspend all payments due for loans made under part D and part B (that are held by the Department of Education) of title IV of the Higher Education Act of 1965 … through September 30, 2020.

(b) No Accrual of Interest.—Notwithstanding any other provision of the Higher Education Act of 1965 … interest shall not accrue on a loan described under subsection (a) for which payment was suspended for the period of the suspension.

(c) Consideration of Payments.—Notwithstanding any other provision of the Higher Education Act of 1965 … the Secretary shall deem each month for which a loan payment was suspended under this section as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under part D or B of title IV of the Higher Education Act of 1965 … for which the borrower would have otherwise qualified.

(d) Reporting to Consumer Reporting Agencies.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower.

(e) Suspending Involuntary Collection.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall suspend all involuntary collection related to the loan, including—

(1) a wage garnishment authorized under section 488A of the Higher Education Act of 1965 … or section 3720D of title 31, United States Code;

(2) a reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code, or section 6402(d) of the Internal Revenue Code of 1986;

(3) a reduction of any other Federal benefit payment by administrative offset authorized under section 3716 of title 31, United States Code (including a benefit payment due to an individual under the Social Security Act or any other provision described in subsection (c)(3)(A)(i) of such section); and

(4) any other involuntary collection activity by the Secretary.

[296] Calculated with data from:

a) Dataset: “Federal Student Loan Portfolio by Loan Status.” National Student Loan Data System. Accessed April 28, 2022 at <studentaid.gov>

Tab: “Federally Managed”

b) “Quarterly Report on Household Debt and Credit, 2021:Q4.” Federal Reserve Bank of New York, Research and Statistics Group, Microeconomic Studies, February 2022. <www.newyorkfed.org>

Page 3 (of PDF): “Outstanding student loan debt stood at $1.58 trillion in the fourth quarter, an $8 billion decline from 2021Q3.”

NOTE: An Excel file containing the data and calculations is available upon request.

[297] “WHO Director-General’s Opening Remarks at the Media Briefing on Covid-19.” World Health Organization, March 11, 2020. <bit.ly>

[Dr. Tedros Adhanom Ghebreyesus:] …

WHO has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction.

We have therefore made the assessment that COVID-19 can be characterized as a pandemic.

[298] Public Law 116-136: “Coronavirus Aid, Relief, and Economic Security Act” (a.k.a. “CARES Act”). 116th U.S. Congress. Signed into Law by Donald J. Trump on March 27, 2020. <www.congress.gov>

Title III, Part IV, Subtitle B, Section 3513:

Temporary Relief for Federal Student Loan Borrowers.

(a) In General.—The Secretary shall suspend all payments due for loans made under part D and part B (that are held by the Department of Education) of title IV of the Higher Education Act of 1965 … through September 30, 2020.

(b) No Accrual of Interest.—Notwithstanding any other provision of the Higher Education Act of 1965 … interest shall not accrue on a loan described under subsection (a) for which payment was suspended for the period of the suspension.

(c) Consideration of Payments.—Notwithstanding any other provision of the Higher Education Act of 1965 … the Secretary shall deem each month for which a loan payment was suspended under this section as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under part D or B of title IV of the Higher Education Act of 1965 … for which the borrower would have otherwise qualified.

(d) Reporting to Consumer Reporting Agencies.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower.

(e) Suspending Involuntary Collection.—During the period in which the Secretary suspends payments on a loan under subsection (a), the Secretary shall suspend all involuntary collection related to the loan, including—

(1) a wage garnishment authorized under section 488A of the Higher Education Act of 1965 … or section 3720D of title 31, United States Code;

(2) a reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code, or section 6402(d) of the Internal Revenue Code of 1986;

(3) a reduction of any other Federal benefit payment by administrative offset authorized under section 3716 of title 31, United States Code (including a benefit payment due to an individual under the Social Security Act or any other provision described in subsection (c)(3)(A)(i) of such section); and

(4) any other involuntary collection activity by the Secretary.

[299] Calculated with data from:

a) Dataset: “Federal Student Loan Portfolio by Loan Status.” National Student Loan Data System. Accessed April 28, 2022 at <studentaid.gov>

Tab: “Federally Managed”

b) “Quarterly Report on Household Debt and Credit, 2021:Q4.” Federal Reserve Bank of New York, Research and Statistics Group, Microeconomic Studies, February 2022. <www.newyorkfed.org>

Page 3 (of PDF): “Outstanding student loan debt stood at $1.58 trillion in the fourth quarter, an $8 billion decline from 2021Q3.”

NOTE: An Excel file containing the data and calculations is available upon request.

[300] Dataset: “Federally Managed Portfolio by Loan Status.” U.S. Department of Education, National Student Loan Data System. Accessed July 31, 2020 at <studentaid.ed.gov>

Tab: “Loan Status Definitions”

Please Note: Recipient counts are based at the loan level. As a result, recipients may be counted multiple times across varying loan statuses. …

In-School – Includes loans that have never entered repayment as a result of the borrower’s enrollment in school.

Grace – Includes loans that have entered a six-month grace period after the borrower is no longer enrolled in school at least half-time. Borrowers are not expected to make payments during grace.

Repayment – Includes loans that are in an active repayment status.

Deferment – Includes loans in which payments have been postponed as a result of certain circumstances such as returning to school, military service, or economic hardship.

Forbearance – Includes loans in which payments have been temporary suspended or reduced as a result of certain types of financial hardships.

Cumulative in Default – Includes loans that are more than 360 days delinquent.

Other – Includes loans that are in non-defaulted bankruptcy and in a disability status.

NOTE: Recipient counts are based at the loan level. As a result, recipients may be counted multiple times across varying loan statuses.

[301] Webpage: “Student Loan Bankruptcy Exception.” FinAid. Accessed September 27, 2018 at <www.finaid.org>

The US Bankruptcy Code at 11 USC 523(a)(8) provides an exception to bankruptcy discharge for education loans. This page provides a history of the legislative language in this section of the US Bankruptcy Code.

Student loans were dischargeable in bankruptcy prior to 1976. With the introduction of the US Bankruptcy Code (11 USC 101 et seq) in 1978, the ability to discharge education loans was limited. Subsequent changes in the law have further narrowed the dischargeability of education debt. …

The following timeline illustrates the date of major changes in the treatment of student loans under the US Bankruptcy Code and related changes to other legislation.

[302] Report: “Trends in the Student Loan Market.” U.S. Treasury Department, Treasury Borrowing Advisory Committee, November 4, 2014. <www.treasury.gov>

Page 9:

Unlike Other Credit, Can’t Extinguish Student Loans in Bankruptcy Default Consequences:

• Tax Refund Offsets: IRS can offset the borrower’s income tax refund until the defaulted loan is paid in full. A number of states also have laws that authorize state guaranty agencies to take state income tax refunds.

• Federal Benefits Offsets: The government can offset certain Social Security benefits to collect government student loans. Just as with other types of student loan collection, there is no time limit on Social Security offsets, according to a 2005 Supreme Court Case.

• Wage Garnishments: The government can also garnish wages as a way to recover money owed on a defaulted student loan. The United States Department of Education or a Student Loan Guarantor can garnish 15% of disposable pay1 per pay period without a court order.

• Effect on Credit History: Adversely affects credit for many years. If borrower defaults, loan will be listed as a current debt that is in default. The default will also be listed in the historical section of borrower’s credit report, specifying the length of the default.

• License Revocations: A number of states allow professional and vocational boards to refuse to certify, certify with restrictions, suspend or revoke a member’s professional or vocational license and, in some cases, impose a fine, when a member defaults on student loans.

[303] Article: “Benefits Can Be Used to Pay Student Loans.” By Melissa McNamara. Associated Press, December 7, 2005. <www.cbsnews.com>

“The Supreme Court ruled unanimously Wednesday that the government can seize a person’s Social Security benefits to pay old student loans.”

[304] Article: “White House Floats Bankruptcy Process for Some Student Debt.” By Josh Mitchell. Wall Street Journal, March 10, 2015. <www.wsj.com>

“Fewer than 1,000 people try to get rid of their student loans every year using bankruptcy in a process that is both expensive and uncertain: It involves filing a lawsuit in federal court, and lawyers typically charge several thousand dollars upfront for that work. A Wall Street Journal analysis found 713 such lawsuits were filed last year.”

[305] Press release: “Fact Sheet: A Student Aid Bill of Rights: Taking Action to Ensure Strong Consumer Protections for Student Loan Borrowers.” White House, Office of the Press Secretary, March 10, 2015. <www.whitehouse.gov>

In addition, new requirements may be appropriate for private and federally guaranteed student loans so that all of the more than 40 million Americans with student loans have additional basic rights and protections. The President is directing his Cabinet and White House advisers, working with the Consumer Financial Protection Bureau, to study whether consumer protections recently applied to mortgages and credit cards, such as notice and grace periods after loans are transferred among lenders and a requirement that lenders confirm balances to allow borrowers to pay off the loan, should also be afforded to student loan borrowers and improve the quality of servicing for all types of student loans. The agencies will develop recommendations for regulatory and legislative changes for all student loan borrowers, including possible changes to the treatment of loans in bankruptcy proceedings and when they were borrowed under fraudulent circumstances.

[306] Report: “Federal Student Loan Forgiveness and Loan Repayment Programs.” By Alexandra Hegji, David P. Smole, and Elayne J. Heisler. Congressional Research Service, November 20, 2018. <crsreports.congress.gov>

Page 2 (of PDF):

The number and availability of loan forgiveness and loan repayment programs have expanded considerably since the establishment of the first major federal loan forgiveness program by the National Defense Education Act of 1958. Currently, over 50 such programs are authorized at the federal level, approximately 30 of which were operational as of October 1, 2017.

Pages 3–4:

Distinction Among Loan Forgiveness and Loan Repayment Programs

In employment-focused loan forgiveness and loan repayment programs, a borrower typically must work or serve in a certain function, profession, or geographic location for a specified period of time to qualify for benefits. Under repayment plan-based loan forgiveness, a borrower typically must repay according to an income-driven repayment plan for a specified period of time to qualify for benefits. At the end of the specified term, some or all of the individual’s qualifying student loan debt is forgiven or repaid on his or her behalf. The individual is thus relieved of responsibility for repaying that portion of his or her student loan debt. One of the most important distinctions among these types of programs is whether the availability of benefits is incorporated into the loan terms and conditions and is thus considered an entitlement to qualified borrowers or whether benefits are made available to qualified borrowers at the discretion of the entity administering the program and whether the benefits are subject to the availability of funds. For the purposes of this report, the former types of programs are referred to as loan forgiveness while the latter are referred to as loan repayment.

In general, loan forgiveness benefits are broadly available to borrowers of qualified loans. The availability of these benefits is expressed to borrowers in their loan documents, such as the master promissory note and the borrower’s rights and responsibilities statement.9 A borrower who satisfies the loan forgiveness program’s eligibility criteria, as set forth in the loan terms and conditions, is entitled to the loan forgiveness benefits. Benefits that are entitlements to qualified borrowers are generally funded through mandatory appropriations and accounted for as part of federal student loan subsidy costs, which are discussed in detail later in the section titled “Cost of Loan Forgiveness and Loan Repayment Programs.” There are two broad categories of loan forgiveness benefits: loan forgiveness for public service employment and loan forgiveness following income-driven repayment.

Loan repayment programs also provide debt relief to borrowers for service in a specific function, profession, or location. However, in contrast to employment-focused loan forgiveness programs, the entity that administers a loan repayment program typically either directly repays some or all of the qualified borrower’s student loan debt on his or her behalf or provides funding to a separate entity for purposes of implementing a loan repayment program and making such payments. Loan repayment benefits are generally offered through programs that are separate or distinct from the program through which a federal student loan is made. In many instances, these programs are designed to address broad employment needs or shortages (for example, within a specific occupation or geographic location), while other such programs are intended to help individual federal agencies recruit and retain qualified employees, often serving as an additional form of compensation to targeted employees, who may be harder to recruit or retain. Both types of loan repayment benefits are generally available to a limited number of qualified borrowers. Typically, loan repayment benefits are discretionary and their availability is subject to the appropriation of funds.

Pages 11–14:

Availability of Loan Forgiveness for Public Service Employment

As described above, loan forgiveness for public service employment provides debt relief to qualified borrowers employed in certain occupations, for specific employers, or in public service. These benefits are considered entitlements and are written into the terms and conditions of widely available federal student loans (for example, Direct Subsidized Loans and Direct Unsubsidized Loans and Perkins Loans). They are potentially available to an open-ended number of qualified borrowers.

Table 1 provides a summary of the various loan forgiveness for public service employment programs offered. …

Table 1 illustrates that although loan forgiveness benefits are entitlements that are potentially available to a wide array of borrowers, to qualify for benefits borrowers must still meet specific eligibility criteria, including completing a specific type of service or entering into a particular occupation or profession.

All three programs are widely available to individuals serving as teachers, while Federal Perkins Loan Cancellation is available to individuals who also serve in other specific public service occupations, such as law enforcement personnel and public defenders, and Direct Loan Public Service Loan Forgiveness is available to an even broader array of individuals who are employed full-time in public service, which includes employment in federal, state, local, or tribal government agencies, and certain nonprofit organizations. Additionally, borrowers of loans made under these programs must serve for a minimum period of time. For these loan forgiveness programs, service commitments generally last between 1 year (for partial benefits) and 10 years.

Availability of Loan Forgiveness Following Income Driven Repayment

Loan forgiveness following income-driven repayment provides debt relief to borrowers who repay their federal student loans as a proportion of their income for an extended period of time but who have not repaid their entire student loan debt. These benefits are considered entitlements and are written into the terms and conditions of widely available federal student loans (for example, Direct Subsidized Loans and Direct Unsubsidized Loans). These repayment plans are potentially available to an open-ended number of qualified borrowers; however, they are distinct from those programs that target public service employment.

Table 2 provides a summary of the various loan forgiveness programs that provide debt relief to individuals following income-driven repayment and provides details on the operational status of each program. The table is organized according to the date on which borrowers first became eligible to repay under each plan. Unlike the loan forgiveness programs presented in Table 1, these programs are not grouped by the potential scope of availability to borrowers and financial resources used to provide benefits, because numerous factors and borrower characteristics may affect program participation, which makes it difficult to estimate the potential scope of each program. …

Table 2 illustrates that the various programs that provide loan forgiveness following income-driven repayment are widely available to a potentially open-ended number of borrowers who meet income-driven qualifications. Unlike loan forgiveness or repayment programs that seek to encourage borrowers to enter into certain service or occupational commitments, no such employer-specific or occupational or service requirements exist for these programs. Rather, under each of the above programs, borrowers generally must make monthly payments towards their qualifying federal student loans for a specified period of time (between 20 and 25 years). The amount of monthly payments is determined based on factors including the amount of the student loan debt, family size, and adjusted gross income; monthly payments are capped at a percentage of a borrower’s discretionary income (between 10% and 20%) or other income-driven criteria. At the end of each program’s repayment period, the outstanding balance of a borrower’s loans is then forgiven and they are no longer responsible for payments on their loans.

[307] Final rule: “Student Assistance General Provisions, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program.” Federal Register, October 30, 2015. <www.govinfo.gov>

Page 67204:

Agency: Office of Postsecondary Education, Department of Education. …

The Secretary amends the regulations governing the William D. Ford Federal Direct Loan (Direct Loan) Program to create a new income-contingent repayment plan in accordance with the President’s initiative to allow more Direct Loan borrowers to cap their loan payments at 10 percent of their monthly incomes. …

In addition, the final regulations will add a new income-contingent repayment plan, called the Revised Pay As You Earn repayment plan (REPAYE plan), to § 685.209. The REPAYE plan is modeled on the existing Pay As You Earn repayment plan, and will be available to all Direct Loan student borrowers regardless of when the borrower took out the loans. Finally, the regulations will allow lump sum payments made through student loan repayment programs administered by the DOD [Department of Defense] to count as qualifying payments for purposes of the Public Service Loan Forgiveness Program.

Summary of the Major Provisions of This Regulatory Action: …

• For a borrower who only has loans received to pay for undergraduate study, provide that the remaining balance of the borrower’s loans that have been repaid under the REPAYE plan is forgiven after 20 years of qualifying payments.

• For a borrower who has at least one loan received to pay for graduate study, provide that the remaining balance of the borrower’s loans that have been repaid under the REPAYE plan is forgiven after 25 years of qualifying payments.

[308] Report: “Public Service Loan Forgiveness: Education Needs to Provide Better Information for the Loan Servicer and Borrowers.” U.S. Government Accountability Office, September 2018. <www.gao.gov>

Page 2 (of PDF): “The PSLF [Public Loan Service Forgiveness] program, established by statute in 2007, forgives borrowers’ federal student loans after they make at least 10 years of qualifying payments while working for certain public service employers and meeting other requirements.”

[309] Press release: “Over 323,000 Federal Student Loan Borrowers to Receive $5.8 Billion in Automatic Total and Permanent Disability Discharges.” U.S. Department of Education, August 19, 2021. <www.ed.gov>

Over 323,000 borrowers who have a total and permanent disability (TPD) will receive more than $5.8 billion in automatic student loan discharges due to a new regulation announced today by the U.S. Department of Education. The change will apply to borrowers who are identified through an existing data match with the Social Security Administration (SSA). … First, the Department will indefinitely extend the policy announced in March to stop asking these borrowers to provide information on their earnings—a process that results in the reinstatement of loans if and when borrowers do not respond—beyond the end of the national emergency. Second, the Department will then pursue the elimination of the three-year monitoring period required under current regulations during the negotiated rulemaking that will begin in October. …

This new regulation allows the Department to provide automatic TPD discharges for borrowers who are identified through administrative data matching by removing the requirement for these borrowers to fill out an application before receiving relief.

[310] Press release: “Public Service Loan Forgiveness (PSLF) Program Overhaul.” U.S. Department of Education, October 6, 2021. <www.ed.gov>

We will offer a time-limited waiver so that student borrowers can count payments from all federal loan programs or repayment plans toward forgiveness. This includes loan types and payment plans that were not previously eligible. We will pursue opportunities to automate PSLF eligibility, give borrowers a way to get errors corrected, and make it easier for members of the military to get credit toward forgiveness while they serve. We will pair these changes with an expanded communications campaign to make sure affected borrowers learn about these opportunities and encourage them to apply. …

The Department estimates that the limited waiver alone will help over 550,000 borrowers who had previously consolidated their loans see their progress toward PSLF grow automatically, with the average borrower receiving 23 additional payments. This includes approximately 22,000 borrowers who will be immediately eligible to have their federal student loans discharged without further action on their part, totaling $1.74 billion in forgiveness. Another 27,000 borrowers could potentially qualify for $2.82 billion in forgiveness if they certify additional periods of employment. For reference, just over 16,000 borrowers have ever received forgiveness under PSLF prior to this action.

[311] Press release: “Department of Education Announces Actions to Fix Longstanding Failures in the Student Loan Programs.” U.S. Department of Education, April 19, 2022. <www.ed.gov>

Today’s actions complement steps the Administration has already taken within its first year to cancel more than $17 billion in debt for 725,000 borrowers in addition to extending the student loan payment pause, saving 41 million borrowers billions of dollars in payments each month. The Department has now approved approximately:

• $6.8 billion for more than 113,000 public servants through improvements to PSLF [Public Service Loan Forgiveness];

• $7.8 billion for more than 400,000 borrowers who have a total and permanent disability;

• $1.2 billion for borrowers who attended ITT Technical Institutes before it closed; and

• Nearly $2 billion to 105,000 borrowers who were defrauded by their school.

[312] Webpage: “Who Qualifies for Borrower Defense?” U.S. Department of Education, Federal Student Aid Office. Accessed March 25, 2022 at <studentaid.gov>

Under the law, you may be eligible for borrower defense to repayment discharge of the federal student loans that you took out to attend a school if that school misled you, or engaged in other misconduct in violation of certain state laws. Specifically, you may assert borrower defense by demonstrating that the school, through an act or omission, violated state law directly related to your federal student loan or to the educational services for which the loan was provided. You may be eligible for borrower defense regardless of whether your school closed or you are otherwise eligible for loan discharge under other laws. You will only be eligible for this type of federal student loan discharge if your school’s misleading activities or other misconduct directly relate to the loan or to the educational services for which the loan was provided. You will not be eligible for this type of loan discharge based on claims that are not directly related to your loan or the educational services provided by the school. For example, personal injury claims or claims based on allegations of harassment are not bases for a borrower defense application.

[313] Press release: “Fact Sheet: Protecting Students from Abusive Career Colleges.” U.S. Department of Education, June 8, 2015. <www.ed.gov>

Today, the Education Department is announcing new steps in this work, particularly to address the concerns of students who attended schools owned by Corinthian Colleges Inc.

How Debt Relief Will Work for Corinthian Students

The Department has worked to rapidly develop a streamlined process for getting debt relief to Corinthian students. The Department’s aim is to make the process of forgiving loans fair, clear and efficient—and to ensure that students who are eligible to participate know about this opportunity.

Some Corinthian schools closed down, while others were sold but remain open under different ownership. The announcements today are for:

• Corinthian students whose schools have closed down.

• Corinthian students who believe they were victims of fraud, regardless of whether their school closed. …

Helping Corinthian Students Whose Schools Have Closed

In general, when a college closes, students are eligible to discharge their federal student loans if they were attending when the school closed or who withdrew from the school within 120 days of the closing date. Given the unique circumstances for former Corinthian students, the Department is expanding eligibility for students to apply for a closed school loan discharge, extending the window of time back to June 20, 2014, to capture students who attended the now-closed campuses after Corinthian entered into an agreement with the Department to terminate Corinthian’s ownership of its schools. …

Helping Students Who Believe They Were Victims of Fraud, Regardless of Whether Their School Closed

Provisions in the law called “defense to repayment” or “borrower’s defense” allow borrowers to seek loan forgiveness if they believe they were defrauded by their college under state law. This provision has rarely been used in the past. Now, the Department is taking unprecedented action to create a streamlined process that is fair to students who may have been victims of fraud and that holds colleges accountable to taxpayers. …

For example, after analyzing the Department’s findings in its investigation of Heald College and relevant California law, the Department has determined that evidence of misrepresentation exists for students enrolled in a large majority of programs offered at Heald College campuses between 2010 and 2015. Specifically, the Department has determined that students who relied on misrepresentations found in published job placement rates for many Heald programs qualify to have their federal direct student loans discharged. Students can have their loans forgiven and receive refunds for amounts paid based on a simple attestation. More information about this process—including the attestation form—is available on studentaid.gov/Corinthian. Additional details will be posted on the website in the coming weeks. …

• Building a better system for debt relief for the future: The Department will develop new regulations to clarify and streamline loan forgiveness under the defense to repayment provision, while maintaining or enhancing current consumer protection standards and strengthening those provisions that hold colleges accountable for actions that result in loan discharges. That process will begin later this year and will not slow down the loan discharge process for current applicants.

[314] Press release: “Department of Education Announces Action to Streamline Borrower Defense Relief Process.” U.S. Department of Education, March 18, 2021. <www.ed.gov>

Today, the U.S. Department of Education (Department) announced it will streamline debt relief determinations for borrowers with claims approved to date that their institution engaged in certain misconduct. The Department will be rescinding the formula for calculating partial relief and adopting a streamlined approach for granting full relief under the regulations to borrower defense claims approved to date. The Department anticipates this change will ultimately help approximately 72,000 borrowers receive $1 billion in loan cancellation. …

Current provisions in federal law called “borrower defense to repayment” or “borrower defense” allow federal borrowers to seek cancellation of their William D. Ford Direct Loan (Direct Loan) Program loans if their institution engaged in certain misconduct. Beginning today, the Department will ensure that borrowers with approved borrower defense claims to date will have a streamlined path to receiving full loan discharges. This includes borrowers with previously approved claims that received less than a full loan discharge.

Full relief under the regulations will include:

• 100 percent discharge of borrowers’ related federal student loans.

• Reimbursement of any amounts paid on the loans, where appropriate under the regulations.

• Requests to credit bureaus to remove any related negative credit reporting. And,

• Reinstatement of federal student aid eligibility, if applicable. …

The Department will begin applying this new approach today and affected borrowers will receive notices from the Department over the next several weeks with discharges following after that.

[315] Press release: “ED Announces Changes to Relief for Approved Borrower Defense Applications.” U.S. Department of Education, Federal Student Aid Office, March 18, 2021. <studentaid.gov>

The U.S. Department of Education (ED) is changing how we determine relief for borrowers who were misled or whose schools engaged in other misconduct in violation of certain laws. …

Current borrower defense provisions in federal law allow federal borrowers to seek loan forgiveness of their William D. Ford Direct Loan (Direct Loan) Program loans if their institution engaged in certain misconduct. ED’s new approach will grant full loan relief for borrowers when evidence shows that their institution engaged in certain types of misconduct that impacted a borrower’s decision to apply to or remain enrolled in that institution.

ED will be rescinding the formula for calculating partial loan relief. Full loan relief available under the regulations will be applied to borrower defense claims approved to date; the change applies to claims for which borrowers only received partial loan relief and for applications approved to date that have yet to receive a relief determination. ED anticipates this change will ultimately help approximately 72,000 borrowers receive $1 billion in loan cancellation.

[316] Article: “Government to Forgive Student Loans at Corinthian Colleges.” By Tamar Lewin. New York Times, June 8, 2015. <www.nytimes.com>

“Secretary of Education Arne Duncan announced Monday that the Education Department would forgive the federal loans of tens of thousands of students who attended Corinthian Colleges, a for-profit college company that closed and filed for bankruptcy last month, amid widespread charges of fraud.”

[317] Article: “For-Profit Colleges File for Bankruptcy.” By Tamar Lewin. New York Times, May 4, 2015. <www.nytimes.com>

Corinthian was once one of the nation’s largest for-profit college companies, enrolling more than 100,000 students at its 100 Everest, Heald and WyoTech campuses. But for the last few years, the company has faced charges of predatory recruiting and false placement and graduation rates. It went into its death spiral last year when the Department of Education suspended its access to the federal student aid it depended on, and then brokered the sale of most of its campuses.

[318] Press release: “Improved Borrower Defense Discharge Process Will Aid Defrauded Borrowers, Protect Taxpayers.” U.S. Department of Education, December 20, 2017. <www.ed.gov>

After careful review to ensure a fair and efficient process, the U.S. Department of Education (the Department) today unveiled an improved discharge process for borrower defense to repayment (BDR) claims.

“We have been working to get this right for students since day one,” said Secretary Betsy DeVos. “No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly. This improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly. It also protects taxpayers from being forced to shoulder massive costs that may be unjustified.”

For pending claims, no changes were made to the existing approval criteria. Claims that previously would have been approved will still be approved today. However, rather than taking an “all or nothing” approach to discharge, the improved process will provide tiers of relief to compensate former Corinthian students based on damages incurred.

[319] Webpage: “Guidance Concerning Some Provisions of the 2016 Borrower Defense to Repayment Regulations.” Federal Student Aid, U.S. Department of Education, March 15, 2019. <ifap.ed.gov>

On November 1, 2016, the Department of Education published final regulations concerning borrower defense to repayment and other related matters in the Federal Register (81 Fed. Reg. 75,926). The original effective date (July 1, 2017) of these regulations was delayed by the Department, but by order of the U.S. District Court for the District of Columbia in the case Bauer and others v. DeVos … the 2016 Final Regulations took effect.

[320] Ruling: Meaghan Bauer v. Elisabeth DeVos. U.S. District Court for the District of Columbia, September 12, 2018. U.S. District Judge Randolph D. Moss. <www.mass.gov>

Memorandum:

Meaghan Bauer, Stephano Del Rose, and a coalition of nineteen states and the District of Columbia bring suit against the Department of Education under the Administrative Procedure Act…. Plaintiffs challenge three agency actions delaying the implementation of the “Borrower Defense Regulations,” a package of regulatory changes to federal student loan programs designed to “protect student loan borrowers from misleading, deceitful, and predatory practices.”

Conclusion:

The Court will GRANT the state plaintiffs’ and student borrower plaintiffs’ motions for summary judgment … and will DENY the Department’s cross-motion for summary judgment…. It is further ORDERED that the parties shall appear for a status conference on September 14, 2018 at 10:30 a.m. in Courtroom 21 to address remedies.

[321] Ruling: California Association of Private Postsecondary Schools v. Elisabeth DeVos. U.S. District Court for the District of Columbia, October 16, 2018. U.S. District Judge Randolph D. Moss. <www.mass.gov>

Memorandum:

In sum, the Court concludes that CAPPS [California Association of Private Postsecondary Schools ] has failed to carry its burden of demonstrating that it is entitled to the “extraordinary remedy” of a preliminary injunction. … With respect to many of CAPPS’s challenges, the Court is not convinced that the association has shown a “substantial likelihood” that it has standing to sue. … With respect to some challenges, that conclusion is clear, while it is less certain as to others. But, as to each of the challenges that CAPPS raises in the pending motion, it falls well short of the “high standard for irreparable injury” that the Court of Appeals “has set.” …

Conclusion:

For the foregoing reasons, Plaintiff’s renewed motion to for preliminary injunction … is hereby DENIED.

[322] Final rule: “Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, William D. Ford Federal Direct Loan Program, and Teacher Education Assistance for College and Higher Education Grant Program.” Federal Register, March 19, 2019. <www.govinfo.gov>

Page 9964:

Agency: Office of Postsecondary Education, Department of Education. …

Consistent with the decisions of the U.S. District Court for the District of Columbia, this document memorializes that selected provisions of these final regulations took effect. Due to more recently-effective amendments, the Department must also correct affected amendatory instructions to ensure their incorporation into the CFR [Code of Federal Regulations]. …

The original “effective date” for these provisions was July 1, 2017 … To the extent the provisions explicitly use this date as a benchmark (for example, § 685.206(c)(“For loans first disbursed prior to July 1, 2017, the borrower may assert a borrower defense under this paragraph”)), the Department will use July 1, 2017 as the relevant date.

[323] Webpage: “Guidance Concerning Some Provisions of the 2016 Borrower Defense to Repayment Regulations.” Federal Student Aid, U.S. Department of Education, March 15, 2019. <ifap.ed.gov>

On November 1, 2016, the Department of Education published final regulations concerning borrower defense to repayment and other related matters in the Federal Register (81 Fed. Reg. 75,926). The original effective date (July 1, 2017) of these regulations was delayed by the Department, but by order of the U.S. District Court for the District of Columbia in the case Bauer and others v. DeVos … the 2016 Final Regulations took effect.

[324] Press release: “Education Department Approves $415 Million in Borrower Defense Claims Including for Former DeVry University Student.” U.S. Department of Education, February 16, 2022. <www.ed.gov>

“Nearly 16,000 borrowers will receive $415 million in borrower defense to repayment discharges following the approval of four new findings and the continued review of claims. … Today’s actions bring the total amount of approved relief under borrower defense to repayment to approximately $2 billion for more than 107,000 borrowers.”

[325] Press release: “Department of Education Announces Approval of New Categories of Borrower Defense Claims Totaling $500 Million in Loan Relief to 18,000 Borrowers.” U.S. Department of Education, June 16, 2021. <www.ed.gov>

The U.S. Department of Education (Department) announced today the approval of 18,000 borrower defense to repayment (borrower defense) claims for individuals who attended ITT Technical Institute (ITT). These borrowers will receive 100 percent loan discharges, resulting in approximately $500 million in relief. This brings total loan cancellation under borrower defense by the Biden–Harris Administration to $1.5 billion for approximately 90,000 borrowers.

[326] Press release: “Department of Education Announces Actions to Fix Longstanding Failures in the Student Loan Programs.” U.S. Department of Education, April 19, 2022. <www.ed.gov>

The Department has now approved approximately: …

• $1.2 billion for borrowers who attended ITT Technical Institutes before it closed; and

• Nearly $2 billion to 105,000 borrowers who were defrauded by their school.

[327] Calculated with data from the press release: “Education Department Approves $415 Million in Borrower Defense Claims Including for Former DeVry University Student.” U.S. Department of Education, February 16, 2022. <www.ed.gov>

Nearly 16,000 borrowers will receive $415 million in borrower defense to repayment discharges following the approval of four new findings and the continued review of claims. This includes approximately 1,800 former DeVry University (DeVry) students who will receive approximately $71.7 million in full borrower defense discharges after the U.S. Department of Education (Department) determined that the institution made widespread substantial misrepresentations about its job placement rates. These are the first approved borrower defense claims associated with a currently operating institution, and the Department will seek to recoup the cost of the discharges from DeVry. The Department anticipates that the number of approved claims related to DeVry will increase as it continues reviewing pending applications. …

After a review of voluminous amounts of evidence, the Department found that from 2008 to 2015 DeVry repeatedly misled prospective students across the country with claims that 90 percent of DeVry graduates who actively seek employment obtained jobs in their field of study within six months of graduation. This claim was the foundation of a national advertising campaign called, “We Major in Careers” to brand DeVry as a “Career Placement University” where it used the 90 percent placement statistic as the way to convince prospective students to enroll.

In fact, the institution’s actual job placement rate was around 58 percent. The Department found that more than half of the jobs included in the claimed 90 percent placement rate were held by students who obtained them well before graduating from DeVry and often before they even enrolled. These jobs were not attributable to a DeVry education and their inclusion was contrary to the plain language of the 90 percent claim. Moreover, DeVry excluded from its calculation large numbers of graduates who were in fact actively looking for work simply because they did not conduct a search in the manner that the University’s Career Services department preferred. …

To date, the Department has identified approximately 1,800 borrowers who will be eligible for approximately $71.7 million in discharges because they relied upon DeVry’s misrepresentation in deciding to enroll. The number of approvals is anticipated to grow as the Department reviews outstanding claims from former DeVry students. All borrowers with approved claims will receive full relief.

CALCULATION: $71.7 million / 1,800 borrowers = $39,833

[328] Webpage: “Get to Know the Student Loan Process.” Accessed May 4, 2022 at <www.devry.edu>

Classes Start July 4, 2022 …

Students apply for Federal Student Loans by completing the Free Application for Federal Student Aid (FAFSA®). After completing the FAFSA, there will be two additional steps that must be completed to secure your loans. Your Student Support Advisor will help guide you through these steps. …

Federal Direct Loans are low-interest loans that offer in-school deferment for students enrolled at least half-time. Loan amounts are based on dependency status and the number of credit hours enrolled toward your DeVry degree. Eligible students borrow directly from the U.S. Department of Education. …

Federal Direct Unsubsidized Loans are non-need based, low-interest loans available to eligible students enrolled at least half-time. Loan amounts are based on a number of factors such as the student's cost of attendance and federal guidelines. …

Federal PLUS Loans are credit-based loans for eligible students who are enrolled at least half-time. For undergraduate students, the PLUS borrower must be one of the student‘s parents. For graduate students, the PLUS borrower is the student. PLUS loans are non-need based and loan amounts are based on the student’s unmet cost of attendance.

[329] Report: “Higher Education: Education Should Strengthen Oversight of Schools and Accreditors.” U.S. Government Accountability Office, January 22, 2015. <www.gao.gov>

Page 2 (of PDF): “To access federal student aid—which totaled more than $136 billion in fiscal year 2013—schools must be accredited to ensure they offer a quality education.”

Page 4: “Accreditors … play a critical role in protecting the federal investment in higher education as part of the ‘triad’ that oversees schools participating in federal student aid programs authorized under Title IV of the Higher Education Act.8,9

Page 5:

Accrediting Agencies: Apply and enforce standards that help ensure that the education offered by a postsecondary school is of sufficient quality to achieve the objectives for which it is offered. …

The purpose of accreditation … is to help ensure that member schools meet quality standards established by accrediting agencies. While accreditation first arose in the U.S. as a means of ensuring academic quality by nongovernmental peer evaluation, today the process also serves as one of the bases for determining a school’s eligibility to participate in federal student aid programs. …

Accreditation … is a peer review process that serves several purposes in addition to being a gatekeeper for federal funds….

Pages 6–7:

In general, two different types of accreditors—regional and national—offer accreditation to schools that allows the schools to access federal student aid funds.11,12 Regional accreditors accredit mostly nonprofit and public schools, while national accreditors generally accredit for-profit schools. At the time of our review, regional accreditors had 3,134 member schools in total, while national accreditors had 3,719.13 Seven regional accreditors accredit schools within a particular region and have historically accredited public and private nonprofit schools that award degrees. In addition, eight national accreditors operate nationwide and have historically accredited vocational or technical schools that do not award degrees. Differences between regional and national accreditors still exist, as seen in figure 2, but some for-profit schools have obtained regional accreditation in recent years and many for-profit schools currently award two-and four-year degrees.

[330] Report: “Higher Education: Education Should Strengthen Oversight of Schools and Accreditors.” U.S. Government Accountability Office, January 22, 2015. <www.gao.gov>

Page 4: “Accreditors—generally nongovernmental, nonprofit organizations—play a critical role in protecting the federal investment in higher education….”

Page 5:

[U.S. Department of] Education: Recognize accreditors determined to be reliable authorities as to the quality of education offered by schools; certify schools as eligible to participate in federal student aid programs; and ensure that participating schools comply with the laws, regulations, and policies governing federal student aid. …

Accreditation agencies and processes predate the Higher Education Act [of 1965], and accreditation is a peer review process that serves several purposes in addition to being a gatekeeper for federal funds, including facilitating the transferability of courses and credits across member schools. According to representatives of schools and accrediting agencies, accreditation also encourages schools to maintain a focus on self-improvement.

While Education is required to determine whether accrediting agencies have standards in certain areas before recognizing them, the accrediting agencies are responsible for evaluating member schools to determine if they meet the accreditors’ standards. This accreditation process generally occurs at least every 10 years, depending on the accreditor and the school. The process is typically conducted by volunteer peer evaluators, generally from other member schools, selected by the accreditor, with final accreditation decisions made by a board that includes representatives from member schools and the public. While specific steps vary by accrediting agency, schools generally go through a similar accreditation process….

[331] Webpage: “The Executive Branch.” White House. Accessed March 2, 2022 at <www.whitehouse.gov>

Under Article II of the Constitution, the President is responsible for the execution and enforcement of the laws created by Congress. Fifteen executive departments—each led by an appointed member of the President’s Cabinet—carry out the day-to-day administration of the federal government. They are joined in this by other executive agencies such as the CIA and Environmental Protection Agency, the heads of which are not part of the Cabinet, but who are under the full authority of the President. The President also appoints the heads of more than 50 independent federal commissions, such as the Federal Reserve Board or the Securities and Exchange Commission, as well as federal judges, ambassadors, and other federal offices. The Executive Office of the President (EOP) consists of the immediate staff to the President, along with entities such as the Office of Management and Budget and the Office of the United States Trade Representative. …

The Cabinet is an advisory body made up of the heads of the 15 executive departments. Appointed by the President and confirmed by the Senate, the members of the Cabinet are often the President’s closest confidants. In addition to running major federal agencies, they play an important role in the Presidential line of succession—after the Vice President, Speaker of the House, and Senate President pro tempore, the line of succession continues with the Cabinet offices in the order in which the departments were created. All the members of the Cabinet take the title Secretary, excepting the head of the Justice Department, who is styled Attorney General. …

Department of Education


The mission of the Department of Education is to promote student learning and preparation for college, careers, and citizenship in a global economy by fostering educational excellence and ensuring equal access to educational opportunity.

The Department administers federal financial aid for higher education, oversees educational programs and civil rights laws that promote equity in student learning opportunities, collects data and sponsors research on America’s schools to guide improvements in education quality, and works to complement the efforts of state and local governments, parents, and students.

The U.S. Secretary of Education oversees the Department’s 4,200 employees and $68.6 billion budget.

[332] Report: “Higher Education: Education Should Strengthen Oversight of Schools and Accreditors.” U.S. Government Accountability Office, January 22, 2015. <www.gao.gov>

Page 9:

The Higher Education Act requires accreditors to report certain sanctions, including terminations and probations, to Education within 30 days, and to provide Education a summary of the reasons leading them to terminate a school’s accreditation.19 Regional accreditors recently agreed on common sanction definitions, while national accrediting agencies do not have agreed-upon sanction definitions….

19 Accreditors must also report such sanctions, and provide summaries to the appropriate state licensing or authorizing agency. … Specifically, accreditors must notify Education and the appropriate state licensing or authorizing agency of any final decision to place a school on probation; deny, withdraw, suspend, revoke, or terminate a school’s accreditation; or take other adverse action, as defined by the accrediting agency. … Accreditors must provide written notice to the public of such sanctions within 24 hours of its notice to the school.

[333] Report: “Higher Education: Education Should Strengthen Oversight of Schools and Accreditors.” U.S. Government Accountability Office, January 22, 2015. <www.gao.gov>

Page 6: “In general, two different types of accreditors—regional and national—offer accreditation to schools that allows the schools to access federal student aid funds.11,12 Regional accreditors accredit mostly nonprofit and public schools, while national accreditors generally accredit for-profit schools.”

Page 8:

Areas in Which Accreditors Are Required to Have Standards

1. Success with respect to student achievement (Standards may be established by the school and differ according to its mission.)

2. Curricula

3. Faculty

4. Facilities, equipment, and supplies

5. Fiscal and administrative capacity

6. Student support services

7. Recruiting and admissions practices

8. Measures of program length and objectives

9. Student complaints

10. Compliance with federal student aid program responsibilities

Pages 14–15:

In addition, the proportion of member schools that accreditors sanctioned varied. For example, two accreditors each sanctioned fewer than 2 percent of their member schools during our timeframe, compared to 41 percent for another accreditor. A representative from one accrediting agency explained that a key challenge for accreditors is grappling with competing expectations of accreditation. The representative noted that there is a general view by policy makers and those who influence policy that accreditors do not terminate accreditation enough. However, if an accreditor does terminate a particular school’s accreditation, she said there may be significant negative reaction from the public in the affected region, and a view that the accreditor is being too punitive.29

Page 18:

Reasons for Accreditor Sanctions:

Academic quality: issues with student achievement in relation to the mission and curricula, or other student outcomes.

Administrative capability: issues such as those related to facilities, supplies, and administrative capability.

Financial capability: issues with financial capability and compliance with federal student aid responsibilities.

Integrity: fraud or misrepresentation.

Governance: issues with division of responsibility, such as between the Board and a college president.

Institutional Effectiveness: issues related to long-term plans for assessing learning and academic achievement.

Page 22:

We found that, on average, accreditors were no more likely to issue terminations or probations to schools with weaker student outcomes compared to schools with stronger student outcomes from October 2009 through March 2014…. This held true for one combined indicator incorporating all of the student outcome characteristics we reviewed, as well as for most of the individual characteristics we examined. … Regional accreditors, however, were more likely to issue terminations or probations to schools with weaker outcomes on the combined indicator. (See appendix I for additional details on this analysis and appendix III for additional information on accreditor sanctions associated with student outcomes.)

Pages 23–25:

Selected Student Outcome Characteristics:

Three-Year Cohort Default Rate: the percent of borrowers in default 3 years after entering repayment status. Education views this characteristic as an indicator of academic quality at schools, since students who received a lower quality education may be less likely to have adequate income to repay their loans.

Forbearance Rate: the percent of borrowers in forbearance (and therefore not repaying their loans on a temporary basis) during the official cohort default period. Education views this characteristic as an indicator of academic quality at schools, since students who received a lower quality education may be less likely to have adequate income to repay their loans.

Graduation Rate: the percent of first-time full-time degree/certificate-seeking undergraduate students who complete a program within 150 percent of the program length. A low graduation rate may indicate a lack of academic quality.

Dropout Rate: the percent of students who left school during a particular year, but did not graduate. A high dropout rate may indicate a lack of academic quality.

Retention Rate: the percent of first-time degree/certificate-seeking students who enrolled in one fall and either successfully completed their program or re-enrolled in the next fall. A low retention rate may indicate a lack of academic quality.

Increases in Federal Student Aid: annual growth in federal student aid volume, which may indicate in extreme cases that growth may be too rapid to maintain academic and administrative services needed to adequately support students.

Number of Program Review Findings: the number of findings at schools selected by Education for in-depth review due to the presence of certain risk factors, and the number of issues found in those reviews. …

Although accreditors are required by law to have standards in academic and financial areas, among others, they are not required to use the student outcome characteristics that we selected to assess school academic quality, or to sanction members with weaker outcomes. Some accreditors do examine school student-level outcomes as benchmarks to determine whether their member schools are providing quality education, but would not necessarily sanction or revoke the accreditation of a school for not meeting these benchmarks.39

Table 3: Likelihood of Termination or Probation for Schools with Weaker vs. Stronger Individual Student Outcome Characteristics, by Type of Accreditor, October 2009 through March 2014

Was there a significant difference in accreditors’ responses to weaker and stronger student outcomesa at schools?

Overall … Default Rate [=] Yes … Graduation Rate [=] No … Dropout Rate [=] No … Retention Rate [=] No … Forbearance Rate [=] No

Regional accreditors … Default Rate [=] Yes … Graduation Rate [=] Yes … Dropout Rate [=] Yes … Retention Rate [=] Yes … Forbearance Rate [=] No

National accreditors … Default Rate [=] No … Graduation Rate [=] No … Dropout Rate [=] No … Retention Rate [=] No … Forbearance Rate [=] No

Source: GAO [U.S. Government Accountability Office] analysis of school-level student outcome characteristics collected by Education and data from the accreditation database. …

Notes: We used statistical techniques that allowed us to examine accreditors’ likelihood of sanctioning schools with weaker student outcome characteristics, compared to schools with stronger outcomes, for each individual outcome. Schools with weaker student outcomes were considered to be those in the bottom vs. the top for each characteristic (those in the 1st vs. 99th percentile and 5th vs. 95th percentile). “Yes” indicates that the difference between the 1st and 99th percentiles and/or 5th and 95th percentiles was statistically significant at the 95 percent confidence level. All comparisons were significant for the 1st and 99th percentiles as well as for the 5th and 95th percentiles, with the exception of default rate for regional accreditors, which was only significant when comparing the 5th and 95th percentiles.

a Default rate indicates the percent of borrowers who entered repayment in fiscal 2009 or 2010 and were in default as of the end of the second following fiscal year; graduation rates reported to IPEDS in 2011 and 2012 are for first-time full-time degree/certificate-seeking undergraduate students that completed their degree within 150 percent of the expected time; dropout rate indicates the total number of withdrawals reported by each school during a particular year divided by the total number of graduates plus withdrawals reported to the National Student Loan Data System for that year for award years 2008–2009 through 2012–2013; retention rate indicates the percent of first-time degree/certificate-seeking students who enrolled in the previous fall and either successfully completed their program or re-enrolled in the next fall as reported to IPEDS in the fall of 2010 and 2011; and forbearance rate indicates the percent of borrowers who entered repayment status in fiscal year 2009 and 2010 and were in forbearance as of the end of the following fiscal year.

Because the graduation rate collected by Education is limited to first-time full-time degree/certificate-seeking undergraduate students, we also estimated accreditors’ likelihood of sanctioning schools with higher dropout rates.40 Similar to the results of our graduation rate analysis, we found that national accreditors were not more likely to issue terminations or probations to schools with higher dropout rates than those with lower dropout rates. In contrast, regional accreditors were more likely to issue terminations or probations to schools with higher dropout rates (see table 3 above).

Pages 33–34:

For 36 of the 93 schools receiving federal student aid funds that were placed on probation by their accreditors in fiscal year 2012, we found no indication of follow-up activities by Education between the beginning of fiscal year 2012 and December 2013.56,57 Not all accreditor sanctions require follow-up by Education, such as a sanction issued for failure to obtain student feedback. However, oversight actions by Education may be warranted if accreditor sanctions indicate potential federal student aid violations or other weaknesses affecting a school’s ability to appropriately administer federal student aid programs. As discussed above, our review of 10 schools with fiscal year 2012 accreditor sanctions found three cases in which analysts had no record of accreditor sanctions that could indicate a need for heightened federal student aid oversight. Because Education did not capture its decisions or the rationale for them in these cases, it is not possible to know if analysts did not review the cases at all, or if they reviewed them and determined that no action should be taken.

Pages 35–36:

Unclear guidance from Education may also make it difficult for Education staff who oversee schools to respond consistently to these sanction notifications and contribute to lapses in oversight of schools, since the guidance does not lay out the recommended approach to specific types of accreditor sanctions.60 Moreover, although several officials who oversee schools told us they believed official guidance required them to restrict access to federal student aid funds for schools with show cause orders, the guidance does not specifically refer to show cause orders. In addition, the fact that Education may not have reviewed accreditor information about up to one-third of the 93 schools that were receiving federal student aid funds and that were placed on probation in fiscal year 2012, as discussed above, may also reflect the lack of clear guidance by sanction type. …

Moreover, in part because Education’s guidance does not lay out the recommended approach to specific types of accreditor sanctions, officials who oversee schools do not consistently view accreditor sanction notifications as a valuable oversight tool. For example, one official noted that her team would never respond to accreditor probations because they occur too frequently to track and would disrupt other work.62 However, our review found that just under 100 schools of the more than 6,000 participating in federal student aid programs were placed on probation by their accreditor in fiscal year 2012. Another official said reviewing accreditor sanctions was not very useful in overseeing schools, as accreditors would take additional action to prompt a response by Education if a school’s situation became more serious. However, other officials who oversee schools stated that they found show cause order notifications helpful.63 Consequently, Education’s response to sanctions is inconsistent. Since accreditors may take other, informal steps prior to issuing a sanction, as discussed earlier in the report, accreditor sanctions can in fact be a serious indication of problems at a school. More specifically, all accreditor sanctions—including probations—can be an important source of information on schools. Consistent with federal internal control standards that call for ongoing, continual monitoring, reviewing accreditor sanctions in a timely manner can help analysts who oversee schools detect school compliance issues as they occur and prevent more serious problems from developing in the future.64

[334] Report: “Higher Education: Education Should Strengthen Oversight of Schools and Accreditors.” U.S. Government Accountability Office, January 22, 2015. <www.gao.gov>

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However, our analysis found that accreditors were no more likely to sanction schools with weaker student outcomes than schools with stronger student outcomes. These findings raise questions about whether existing accreditor standards are sufficient to ensure the quality of schools, whether Education is effectively determining if these standards ensure educational quality, and whether federal student aid funds are appropriately safeguarded.

[335] Press release: “Fact Sheet: Protecting Students from Abusive Career Colleges.” U.S. Department of Education, June 8, 2015. <www.ed.gov>

Over the past six years, the Education Department has taken unprecedented steps to hold career colleges accountable for giving students what they deserve: a high-quality, affordable education that prepares them for their careers. The Department established tougher regulations targeting misleading claims by colleges and incentives that drove sales people to enroll students through dubious promises. The Department has cracked down on bad actors through investigations and enforcement actions. The Department also issued “gainful employment” regulations, which will help ensure that students at career colleges don’t end up with debt they cannot repay. The Department will continue to hold institutions accountable in order to improve the value of their programs, protect students from abusive colleges, and safeguard the interests of taxpayers.

[336] Report: “The Budget and Economic Outlook: Fiscal Years 2013 to 2023.” U.S. Congressional Budget Office, February 2013. <www.cbo.gov>

Page 25:

However, several factors—collectively labeled other means of financing and not directly included in budget totals—also affect the government’s need to borrow from the public. Among them are reductions (or increases) in the government’s cash balance and in the cash flows associated with federal credit programs (such as those related to student loans and mortgage guarantees) because only the subsidy costs of those programs (calculated on a present-value basis) are reflected in the budget deficit.

CBO [U.S. Congressional Budget Office] projects that Treasury borrowing will be $104 billion more than the projected budget deficit in fiscal year 2013, mainly to finance student loans. Each year from 2014 to 2023, borrowing by the Treasury is expected to exceed the amount of the deficit, mostly because of the need to provide financing for student loans and other credit programs. CBO projects that the government will need to borrow $76 billion more per year, on average, during that period than the budget deficits would suggest.

[337] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2012.” White House Office of Management and Budget, June 18, 2010. <www.gpo.gov>

Page 139:

To illustrate the budgetary and non-budgetary components of a credit program, consider a portfolio of new direct loans made to a cohort of college students. To encourage higher education, the Government offers loans at a lower cost than private lenders. Students agree to repay the loans according to the terms of their promissory notes. The loan terms may include lower interest rates or longer repayment periods than would be available from private lenders. Some of the students are likely to become delinquent or default on their loans, leading to Government losses to the extent the Government is unable to recover the full amount owed by the students. … In other words, the subsidy cost is the difference in present value between the amount disbursed by the Government and the estimated value of the loan assets the Government receives in return. Because the loan assets have value, the remainder of the transaction (beyond the amount recorded as a subsidy) is simply an exchange of financial assets of equal value and does not result in a cost to the Government.

[338] Report: “Fair-Value Accounting for Federal Credit Programs.” U.S. Congressional Budget Office, March 2012. <www.cbo.gov>

Page 1:

According to the rules for budgetary accounting prescribed in the Federal Credit Reform Act of 1990 (FCRA, incorporated as title V of the Congressional Budget Act of 1974), the estimated lifetime cost of a new loan or loan guarantee is recorded in the budget in the year in which the loan is disbursed.2 That lifetime cost is generally described as the subsidy provided by the loan or loan guarantee. It is measured by discounting all of the expected future cash flows associated with the loan or loan guarantee—including the amounts disbursed, principal repaid, interest received, fees charged, and net losses that accrue from defaults—to a present value at the date the loan is disbursed. A present value is a single number that expresses a flow of current and future income, or payments, in terms of a lump sum received, or paid, today; the present value depends on the rate of interest, known as the discount rate, that is used to translate future cash flows into current dollars.3

Page 3: “CBO [U.S. Congressional Budget Office] has estimated that the average subsidy for direct student loans made between 2010 and 2020 would be a negative 9 percent under FCRA accounting…. (A negative subsidy indicates that, for budgetary purposes, the transactions are recorded as generating net income for the government.)”

[339] Report: “Fair-Value Accounting for Federal Credit Programs.” U.S. Congressional Budget Office, March 2012. <www.cbo.gov>

Pages 1–2:

FCRA [Federal Credit Reform Act]-based cost estimates, however, do not provide a comprehensive measure of what federal credit programs actually cost the government and, by extension, taxpayers. Under FCRA’s rules, the present value of expected future cash flows is calculated by discounting them using the rates on U.S. Treasury securities with similar terms to maturity. Because that procedure does not fully account for the cost of the risk the government takes on when issuing loans or loan guarantees, it makes the reported cost of federal direct loans and loan guarantees in the federal budget lower than the cost that private institutions would assign to similar credit assistance based on market prices. Specifically, private institutions would generally calculate the present value of expected future cash flows by discounting those flows using the rates of return on private loans (or securities) with similar risks and maturities. Because the rates of return on private loans exceed Treasury rates, the discounted value of expected loan repayments is smaller under this alternative approach, which implies a larger cost of issuing a loan. (Similar reasoning implies that the private cost of a loan guarantee would be higher than its cost as estimated under FCRA.)4

FCRA and market-based cost estimates alike take into account expected losses from defaults by borrowers. However, because FCRA estimates use Treasury interest rates instead of market-based rates for discounting, FCRA estimates do not incorporate the cost of the market risk associated with the loans. Market risk is the component of financial risk that remains even after investors have diversified their portfolios as much as possible; it arises from shifts in macroeconomic conditions, such as productivity and employment, and from changes in expectations about future macroeconomic conditions. Loans and loan guarantees expose the government to market risk because future repayments of loans tend to be lower when the economy as a whole is performing poorly and resources are more highly valued.

Some observers argue that using market-based rates for discounting loan repayments to the federal government would be inappropriate because the government can fund its loans by issuing Treasury debt and thus does not seem to pay a price for market risk. However, Treasury rates are lower than those market-based rates primarily because Treasury debt holders are protected against default risk. If payments from borrowers fall short of what is owed to the federal government, the shortfall must be made up eventually either by raising taxes or by cutting other spending. (Issuing additional Treasury debt can postpone but not avert the need to raise taxes or cut spending.) Therefore, a more comprehensive approach to measuring the cost of federal credit programs would recognize market risk as a cost to the government and would calculate present values using market-based discount rates. Under such an approach, the federal budget would reflect the market values of loans and loan guarantees.

Page 11:

Federal student loans expose the government to losses from defaults, and they involve significant administrative expenses for origination, servicing, and collection on defaults; at the same time, the government collects fees and interest from borrowers. As with other types of credit, student loans are exposed to market risk, meaning that default rates tend to be higher, and recoveries smaller, when the economy is weak and the losses are most costly.

[340] Report: “Measuring the Cost of Government Activities That Involve Financial Risk.” U.S. Congressional Budget Office, March 2021. <www.cbo.gov>

Page 3:

FCRA [Federal Credit Reform Act] estimates are more likely to produce the appearance of budgetary savings (in other words, show a negative cost) for activities that could be costly to government stakeholders. Fair-value estimates, by contrast, avoid the implication that the government can reduce the deficit just by making loans and guarantees at market rates (an implication that is often called a free lunch). In a competitive market, private investors charge interest and fees that fully offset the average cost of defaults and market risk. A FCRA estimate for a loan made at market prices would incorporate the interest and fees that a private investor would charge for market risk but not the cost of the market risk itself. As a result, under FCRA, a given loan or loan guarantee would appear less expensive when made by the federal government than if it was made by a private lender. The cost of market risk would be included in fair-value estimates, making estimates of the costs of loans and loan guarantees more comprehensive (and higher) using that measure.

Page 4:

Student Loans

Higher limits on the amount of money that students could borrow for postsecondary education would result in more loans to students. That larger volume of loans would have a greater cost under the fair-value approach than under the FCRA approach because the cash flows of the student loan programs are subject to market risk: Former students tend to have lower income when the economy is performing poorly (because well-paying jobs are scarce), and the rate of defaults on student loans tends to be higher as well. A fair-value measure incorporating that market risk represents what the government would need to pay private entities to take on the cash flows from the loans. By contrast, a FCRA measure represents an amount of current cash spending that would have the same long-run effect on the debt as the student loans if defaults occurred at average rates.

[341] Report: “Fair-Value Accounting for Federal Credit Programs.” U.S. Congressional Budget Office, March 2012. <www.cbo.gov>

Page 2:

What is termed the fair-value approach to budgeting for federal credit programs would measure those programs’ costs at market prices or at some approximation of market prices when directly comparable market prices are unavailable. A fair-value approach generally entails applying the discount rates on expected future cash flows that private financial institutions would apply.5 In the view of the Congressional Budget Office (CBO), adopting a fair-value approach would provide a more comprehensive way to measure the costs of federal credit programs and would permit more level comparisons between those costs and the costs of other forms of federal assistance.

Page 3:

In some cases, fair-value estimates of budgetary costs as a percentage of loan amounts are considerably higher than FCRA [Federal Credit Reform Act] estimates: CBO has estimated that the average subsidy for direct student loans made between 2010 and 2020 would be a negative 9 percent under FCRA accounting but a positive 12 percent on a fair-value basis. (A negative subsidy indicates that, for budgetary purposes, the transactions are recorded as generating net income for the government.) Subsequent changes in CBO’s interest rate projections would affect both estimates of the amounts of those subsidies, but the large gap between them would remain.

Page 6:

Because FCRA accounting requires the use of Treasury rates for discounting, it implicitly treats the market risk associated with federal credit programs as having no cost to the government. As a result, the subsidy provided by the government is understated under FCRA accounting. Moreover, the higher the market risk that is associated with a credit obligation, the greater is that understatement.

Page 7:

When the government extends credit, the associated market risk of those obligations is effectively passed along to citizens who, as investors, would view that risk as costly.

If the federal government is able to spread certain risks more widely than the private sector can, the government may be a relatively efficient provider of certain types of insurance. That is, a private provider of such insurance might charge higher fees if it is unable to transfer the risk to a wide group of investors. However, even if the federal government can spread risks widely, it cannot eliminate the component of risk that is associated with fluctuations in the aggregate economy—market risk—and which investors require compensation to bear.

The federal government’s ability to borrow at Treasury rates also does not reduce the cost to taxpayers of the market risk associated with federal credit programs. Treasury rates are relatively low because the securities are backed by the government’s ability to raise taxes. When the government finances a risky loan or loan guarantee by selling a Treasury security, it is effectively shifting risk to members of the public. If such a loan is repaid as expected, the interest and principal payments cover the government’s obligation to the holder of the Treasury security, but if the borrower defaults, the obligation to the security holder must be paid for either by raising taxes or by cutting other spending to be able to repay the Treasury debt. (Issuing additional Treasury debt can postpone but not avert the need to raise taxes or cut spending.) Thus, the risk is effectively borne by taxpayers (or by beneficiaries of government programs); like investors, taxpayers and government beneficiaries generally value resources more highly when the economy is performing poorly.

[342] Report: “Estimates of the Cost of Federal Credit Programs in 2022.” U.S. Congressional Budget Office, October 2021. <www.cbo.gov>

Page 1 (of PDF):

The federal government supports some private activities by offering credit assistance to individuals and businesses. That assistance is provided through direct loans and guarantees of loans made by private financial institutions. In this report, the Congressional Budget Office estimates the lifetime costs of new loans and loan guarantees that are projected to be issued in 2022. The report shows two kinds of estimates: those currently used in the federal budget, which are made by following the procedures prescribed by the Federal Credit Reform Act of 1990 (FCRA), and those referred to as fair-value estimates, which measure the market value of the government’s obligations. Most of the FCRA estimates were produced by other federal agencies; the FCRA estimates for the largest federal credit programs and all of the fair-value estimates were produced by CBO.

Using FCRA procedures, CBO estimates that new loans and loan guarantees issued in 2022 would result in savings of $40.4 billion. But using the fair-value approach, CBO estimates that those loans and guarantees would have a lifetime cost of $58.6 billion. About three-quarters of the difference between those amounts is attributable to three sources: …

• The Department of Education’s student loan programs, which are projected to save $1.7 billion on a FCRA basis but to cost $12.6 billion on a fair-value basis.

Page 4:

Table 1. Projected Costs of Federal Credit Programs in 2022 …

Student Loans … Subsidy Rate (Percent)a … FCRA Estimate [=] –1.9% … Fair-Value Estimate [=] 14.2% … Subsidy (Billions of dollars) … FCRA Estimate [=] –$1.7 … Fair-Value Estimate [=] $12.6 …

Fair-value estimates differ from FCRA estimates in that they account for market risk—the component of financial risk that remains even with a well-diversified portfolio. Market risk arises from shifts in macroeconomic conditions, such as productivity and employment, and from changes in expectations about future macroeconomic conditions. …

The table excludes consolidation loans administered by the Department of Education. …

a. The subsidy rate is the cost of a program, calculated on either a FCRA or fair-value basis, divided by the amount disbursed. A positive subsidy rate indicates a cost to the government, and a negative rate indicates budgetary savings. …

The broad category of lending with the largest difference between the FCRA subsidy rate and the fair-value subsidy rate is student loans. Under FCRA procedures, those loans generate greater budgetary savings per dollar lent than most other federal credit assistance does; under the fair-value approach, most of those savings become costs.

Pages 8–9:

For its projections for 2022, CBO adopted a hybrid approach to separately estimate the fair-value subsidies for the portion of each student loan program with borrowers in income-driven repayment (IDR) and fixed-payment repayment plans. IDR plans tie required payments to borrowers’ incomes and provide loan forgiveness after a certain period. Those plans involve more market risk than fixed-payment plans because of the formulas used to calculate required payments and because borrowers may be eligible to have their unpaid balances forgiven. When the economy performs poorly, borrowers’ earnings are more likely to decrease, lowering the required payments. Those reduced payments will eventually lead to more loan forgiveness. (That additional risk is partly offset because borrowers in IDR plans are less likely than borrowers in fixed-payment plans to default on their loans.) To develop an adjustment for IDR plans, CBO applied methods from academic studies that estimate the financial value of required payments that are a function of future wages.17 Those studies developed methods to adjust projections of future wages on the basis of their relationship with stock prices.

This is the first time that CBO has applied a wage adjustment to estimate fair-value subsidies for borrowers in IDR plans; in past years, the agency relied solely on the loss-multiple approach for that analysis. For borrowers in fixed-payment repayment plans, CBO used the loss-multiple approach to estimate the subsidy rate on a fair-value basis.

Projected Subsidies. Calculated on a FCRA basis, the average subsidy rate for the Department of Education’s student loan programs in 2022 is estimated to be −1.9 percent, and the lifetime budgetary savings are projected to be $1.7 billion. FCRA subsidy rates vary considerably among the individual programs, from −29.5 percent for the PLUS [Parent Loans for Undergraduate Students] loan program for parents to 11.4 percent for the subsidized Stafford loan program. …

Calculated on a fair-value basis, the average subsidy rate for the student loan programs in 2022 is estimated to be 14.2 percent, and the lifetime cost is projected to be $12.6 billion. The difference in budgetary impact between the FCRA and fair-value estimates is thus $14.3 billion. The fair-value subsidy rates differ substantially among the individual programs, from −9.7 percent for the PLUS loan program for parents to 26.9 percent for the subsidized Stafford loan program.

[343] U.S. Code Title 38, Part III, Chapter 34, Subchapter I, Section 3452: “Veterans’ Benefits, Definitions.” Accessed August 10, 2015 at <www.law.cornell.edu>

(f) The term “institution of higher learning” means a college, university, or similar institution, including a technical or business school, offering postsecondary level academic instruction that leads to an associate or higher degree if the school is empowered by the appropriate State education authority under State law to grant an associate or higher degree. When there is no State law to authorize the granting of a degree, the school may be recognized as an institution of higher learning if it is accredited for degree programs by a recognized accrediting agency. Such term shall also include a hospital offering educational programs at the postsecondary level without regard to whether the hospital grants a postsecondary degree. Such term shall also include an educational institution which is not located in a State, which offers a course leading to a standard college degree, or the equivalent, and which is recognized as such by the secretary of education (or comparable official) of the country or other jurisdiction in which the institution is located.

[344] Webpage: “Academic Degree and Certificate Definitions.” Arkansas Department of Higher Education, Research and Planning Division. Accessed July 17, 2015 at <www.adhe.edu>

Associate degree (two years or more): a degree granted upon completion of a program that requires at least two, but fewer than four, academic years of postsecondary education. It includes a level of general education necessary for growth as a lifelong learner and is comprised of 60–72 semester credit hours. There are four types of associate degrees …

Baccalaureate (bachelor’s) degree: a degree granted upon completion of a program that requires four to five years of full-time college work and carries the title of bachelor. …

Master’s degree: a degree which requires at least one, but no more than two, full-time equivalent years of study beyond the bachelor’s degree.

Doctoral degree: a degree awarded upon completion of an educational program at the graduate level which terminates in a doctor’s degree. …

First professional degree: a degree awarded upon completion of a program which meets all of these criteria: a) completion of academic requirements to begin practice in the profession; b) at least two years of college work before entering the program; and c) at least six academic years of college work to complete the degree program, including the prior required college work. First professional degrees are awarded in these fields:

• Chiropractic (DC)

• Dentistry (DDS or DMD)

• Law (LLB or JD)

• Medicine (MD)

• Optometry (OD)

• Osteopathic Medicine (DO)

• Pharmacy (Pharm.D.)

• Podiatry (Pod D or DP)

• Theology (M Div or MHL)

• Veterinary Medicine (DVM)

[345] Report: “Time to Degree of U.S. Research Doctorate Recipients.” By Thomas B. Hoffer and Vincent Welch. National Science Foundation, March 2006. <www.umces.edu>

Page 1:

This InfoBrief draws on data from the Survey of Earned Doctorates (SED) to document average time-to-degree differences among research doctorate recipients from U.S. universities. … [T] three measures of time to degree are examined here:

• total elapsed time from completion of the baccalaureate to the doctorate (total time to degree)

• time in graduate school less reported periods of nonenrollment (registered time to degree)

• age at doctorate …

For the 2003 doctorate recipients, the median total time from baccalaureate to doctorate was 10.1 years, while the median registered time was 7.5 years and the median age at doctorate was 33.3 years.

Pages 2–3:

Table 3 shows time-to-degree differences for 2003 by more detailed science fields of study. Chemistry has the lowest [median] times to degree on all three measures. For the registered time-to-degree variable, mathematics (6.8 years), engineering (6.9 years), and biological sciences (6.9 years), and physics and astronomy (7.0 years) were the next closest fields to chemistry (6.0 years). The longest registered time-to-degree total was found for anthropology (9.6 years).

[346] Webpage: “Path to Graduate and Professional Education.” Grand Valley State University. Accessed August 10, 2015 at <www.gvsu.edu>

A doctoral degree typically involves both coursework and a major research project. Usually 5 to 7 years of full-time study is needed to complete a Ph.D. or other research doctorate. The first 2 to 3 years usually involve classes, seminars, and directed reading to give you comprehensive knowledge of an academic field. This period of study is followed by a written or oral examination that tests your knowledge.

[347] Webpage: “The Difference Between a PhD and Professional Doctorate.” Capella University, March 27, 2018. <www.capella.edu>

Some people say that a PhD prepares you to teach, while a professional doctorate is more geared toward a professional career. But the answer to the question is more complex. …

The primary difference between PhD and professional doctorate programs is the type of research conducted in the independent research phase.

PhD students are expected to create, expand, and contribute to knowledge, research, and theory in their field of study. This kind of discovery is often called original research.

Professional doctorate students are expected to expand and apply existing knowledge and research to existing problems in their professional field. This is often referred to as applied research.

[348] Book: Academically Adrift: Limited Learning on College Campuses. By Richard Arum and Josipa Roksa. University of Chicago Press, 2011.

Pages 146–147:

During graduate training, future faculty members receive little if any formal instruction on teaching. Doctoral training focuses primarily, and at times exclusively, on research. Although recent decades have seen a proliferation of interest in improving the preparation of graduate students, a recent survey of doctoral students indicated that only 50 percent either had an opportunity to take a teaching assistant’s training course lasting at least one term, or reported that they had an opportunity to learn about teaching in their respective disciplines through workshops and seminars.38 Not surprisingly, one of the main concerns of students in doctoral programs is a lack of systematic opportunities to help them learn how to teach.39

Graduate students are not only entering classrooms without much preparation, but more problematically, they are learning in their graduate programs to deprioritize and perhaps even devalue teaching. This aspect of graduate training, which neither prepares students to teach nor always instills in them a respect for the importance of teaching, is problematic not only on principled grounds but also from a functional standpoint: “Many, if not most [PhDs], will not be tenure-track faculty members,” and only a few will have jobs at research universities.41

[349] Webpage: “Difference Between Academic and Professional Doctorate Degrees.” University of California Berkeley, Office of Planning and Analysis. Accessed December 16, 2016 at <opa.berkeley.edu>

“Although the work for the professional doctor’s degree may extend the boundaries of knowledge in the field, it is directed primarily towards distinguished practical performance.”

[350] Webpage: “The Difference Between a PhD and Professional Doctorate.” Capella University, March 27, 2018. <www.capella.edu>

Some people say that a PhD prepares you to teach, while a professional doctorate is more geared toward a professional career. But the answer to the question is more complex. …

The primary difference between PhD and professional doctorate programs is the type of research conducted in the independent research phase.

PhD students are expected to create, expand, and contribute to knowledge, research, and theory in their field of study. This kind of discovery is often called original research.

Professional doctorate students are expected to expand and apply existing knowledge and research to existing problems in their professional field. This is often referred to as applied research.

[351] Webpage: “Academic Degree and Certificate Definitions.” Arkansas Department of Higher Education, Research and Planning Division. Accessed July 17, 2015 at <www.adhe.edu>

Associate degree (two years or more): a degree granted upon completion of a program that requires at least two, but fewer than four, academic years of postsecondary education. It includes a level of general education necessary for growth as a lifelong learner and is comprised of 60–72 semester credit hours. There are four types of associate degrees: …

Baccalaureate (bachelor’s) degree: a degree granted upon completion of a program that requires four to five years of full-time college work and carries the title of bachelor. …

Master’s degree: a degree which requires at least one, but no more than two, full-time equivalent years of study beyond the bachelor’s degree.

Doctoral degree: a degree awarded upon completion of an educational program at the graduate level which terminates in a doctor’s degree. …

First professional degree: a degree awarded upon completion of a program which meets all of these criteria: a) completion of academic requirements to begin practice in the profession; b) at least two years of college work before entering the program; and c) at least six academic years of college work to complete the degree program, including the prior required college work. First professional degrees are awarded in these fields:

• Chiropractic (DC)

• Dentistry (DDS or DMD)

• Law (LLB or JD)

• Medicine (MD)

• Optometry (OD)

• Osteopathic Medicine (DO)

• Pharmacy (Pharm.D.)

• Podiatry (Pod D or DP)

• Theology (M Div or MHL)

• Veterinary Medicine (DVM)

[352] Dataset: “Table 1. Number and Percentage Distribution of Students Enrolled at Title IV Institutions, by Control of Institution, Student Level, Level of Institution, Enrollment Status, and Other Selected Characteristics: United States, Fall 2020.” U.S. Department of Education, National Center for Education Statistics, 2021. <nces.ed.gov>

“All institutions … Number … All Students [=] 19,355,811 … Percent … 4-year [=] 72.7 … 2-year [=] 25.9 … Full-time [=] 61.2 … Part-time [=] 38.8 … Men [=] 41.4 … Women [=] 58.6”

[353] Dataset: “Table 302.10. Recent High School Completers and Their Enrollment in College, by Sex and Level of Institution: 1960 Through 2020.” U.S. Department Of Education, National Center for Education Statistics, August 2021. <nces.ed.gov>

[354] Dataset: “Table 302.20. Percentage of Recent High School Completers Enrolled in College, by Race/Ethnicity: 1960 Through 2020.” U.S. Department of Education, National Center for Education Statistics, August 2021. <nces.ed.gov>

[355] Dataset: “Table 326.20. Graduation Rate From First Institution Attended Within 150 Percent of Normal Time for First-Time, Full-Time Degree/Certificate-Seeking Students at 2-Year Postsecondary Institutions, by Race/Ethnicity, Sex, and Control of Institution: Selected Cohort Entry Years, 2000 Through 2017.” U.S. Department of Education, National Center for Education Statistics, October 2021. <nces.ed.gov>

[356] Dataset: “Table 326.10. Graduation Rate From First Institution Attended for First-Time, Full-Time Bachelor’s Degree- Seeking Students at 4-Year Postsecondary Institutions, by Race/Ethnicity, Time to Completion, Sex, Control of Institution, and Acceptance Rate: Selected Cohort Entry Years, 1996 Through 2014.” U.S. Department of Education, National Center for Education Statistics, October 2021. <nces.ed.gov>

[357] Dataset: “Table 326.10. Graduation Rate From First Institution Attended for First-Time, Full-Time Bachelor’s Degree- Seeking Students at 4-Year Postsecondary Institutions, by Race/Ethnicity, Time to Completion, Sex, Control of Institution, and Acceptance Rate: Selected Cohort Entry Years, 1996 Through 2014.” U.S. Department of Education, National Center for Education Statistics, October 2021. <nces.ed.gov>

[358] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Last revised October 8, 2021. <www.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[359] Report: “Income and Poverty in the United States: 2020.” By Emily Shrider and others. U.S. Census Bureau, September 14, 2021. <www.census.gov>

Page 22: “The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as those provided by the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, public housing, employer-provided fringe benefits, tax credits, or stimulus payments.”

Page 25:

Data on income collected in the ASEC [Current Population Survey Annual Social and Economic Supplements] by the U.S. Census Bureau cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Money income also excludes tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and special COVID-19-related stimulus payments. Money income does not reflect that some families receive noncash benefits such as Supplemental Nutrition Assistance/food stamps, health benefits, and subsidized housing. In addition, money income does not reflect that noncash benefits often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries more accurately than other sources of income, and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.

[360] Paper: “The Falling Time Cost of College: Evidence from Half a Century of Time Use Data.” By Philip Babcock and Mindy Marks. The Review of Economics and Statistics, May 2011. Pages 468–478. <www.mitpressjournals.org>

Page 468:

Using multiple data sets from different time periods, we document declines in academic time investment by full-time college students in the United States between 1961 and 2003. Full-time students allocated 40 hours per week toward class and studying in 1961, whereas by 2003, they were investing about 27 hours per week. Declines were extremely broad based and are not easily accounted for by framing effects, work or major choices, or compositional changes in students or schools. We conclude that there have been substantial changes over time in the quantity or manner of human capital production on college campuses.

[361] Calculated with data from the book: Academically Adrift: Limited Learning on College Campuses. By Richard Arum and Josipa Roksa. University of Chicago Press, 2011.

Pages 32–33:

Our research was made possible by a collaborative partnership with the Council for Aid to Education … and twenty-four four-year colleges and universities that granted us access to students who were scheduled to take the Collegiate Learning Assessment (CLA) in their first semester (Fall 2005) and at the end of their sophomore year (Spring 2007). … The research in this book is based on longitudinal data of 2,322 students enrolled across a diverse range of campuses. … The schools are dispersed nationally across all four regions of the country. We refer to this multifaceted data as the Determinants of College Learning (DCL) dataset. … On most measures, students in the DCL dataset appeared reasonably representative of traditional-age undergraduates in four-year institutions, and the colleges and universities they attended resembled four-year institutions nationwide. The DCL students’ racial, ethnic, and family backgrounds as well as their English-language backgrounds and high school grades also tracked well with national statistics.

Pages 110–111:

Students in our sample reported spending on average fifteen hours per week attending classes and labs. The rest of the time was divided between studying and myriad other activities. Studying is far from the focus of students’ “free time” (i.e., time outside of class): only twelve hours a week are spent studying. Combining the hours spent studying with the hours spent in classes and labs, students in our sample spent less than one-fifth (16 percent) of their reported time each week on academic pursuits. …

In addition to attending classes and studying, students are spending time working, volunteering, and participating in college clubs, fraternities, and sororities. If we presume that students are sleeping eight hours a night … that leaves 85 hours a week for other activities…. What is this additional time spent on? It seems to be spent mostly on socializing and recreation. A recent study of University of California undergraduates reported that while students spent thirteen hours a week studying, they also spent twelve hours socializing with friends, eleven hours using computers for fun, six hours watching television, six hours exercising, five hours on hobbies, and three hours on other forms of entertainment. Students were thus spending on average 43 hours per week outside the classroom on these activities—that is, over three times more hours than the time they spent studying.

CALCULATIONS:

  • 15 hours attending classes and labs + 12 to 13 hours studying = 27–28 hours
  • 27–28 hours on educational activities / 168 hours per week = 16–17%
  • 43 hours on leisure activities and sports / 168 hours per week = 26%

[362] Paper: “Where A Is Ordinary: The Evolution of American College and University Grading, 1940–2009.” By Stuart Rojstaczer and Christopher Healy. Teachers College Record, July 2012. <www.tcrecord.org>

Page 1: “A’s represent 43% of all letter grades, an increase of 28 percentage points since 1960 and 12 percentage points since 1988.”

Page 3:

The characteristics of the 135 institutions for which we have contemporary data are summarized in Table 1. In addition, we have historical data on grading practices from the 1930s onward for 173 institutions (93 of which also have contemporary data). Time series were constructed beginning in 1960 by averaging data from all institutions on an annual basis. For the 1930s, 1940s, and 1950s, data are sparse, so we averaged over 1936 to 1945 (data from 37 schools) and 1946 to 1955 (data from 13 schools) to estimate average grades in 1940 and 1950, respectively. For the early part of the 1960s, there are 11–13 schools represented by our annual averages. By the early part of the 1970s, the data become more plentiful, and 29–30 schools are averaged. Data quantity increases dramatically by the early 2000s with 82–83 schools included in our data set. Because our time series do not include the same schools every year, we smooth our annual estimates with a moving centered three-year average.

Page 4: “Table 1. Characteristics of Schools With Contemporary Data Including Grading Averages … Totals … %A [=] 43.0 … %B [=] 33.8 … %C [=] 14.9 … %D [=] 4.1 … %F [=] 4.2”

Page 10:

Our sample has a student population of 1.5 million, far greater than any other previous detailed study on national grading patterns for four-year colleges and universities. It should be noted, however, that although we randomly found and sought data, in comparison with national student populations, our sample underrepresents private schools (which grade higher than national averages) and overrepresents Southern schools (which grade lower than national averages) … The average SAT score of our sampled student body weighted by student population (math plus verbal) is about 40 points higher than that seen nationally for 2008 in a survey of 2,343 four-year institutions….

The combined effect of undersampling private schools, oversampling Southern schools, and (probably) the slightly higher average SAT scores of our sampled students relative to national averages suggests that our weighted average of 42% A’s is a slightly conservative one.

[363] Report: “Grade Inflation at American Colleges and Universities.” By Stuart Rojstaczer. Last updated March 29, 2016. <www.gradeinflation.com>

We now have data on average grades from over 400 schools (with a combined enrollment of over four million undergraduates). …

By the mid-to-late 1990s, A was the most common grade at an average four-year college campus (and at a typical community college as well). By 2013, the average college student had about a 3.15 GPA … and forty-five percent of all A–F letter grades were A’s.…

The observed grade change nationwide in the consumer era is the equivalent of every class of 100 making two B students into B+ students every year and alternating between making one A– student into an A student and one B+ student into an A– student every year. It’s so incrementally slow a process that it’s easy to see why an individual instructor (or university administrator or leader) can delude himself into believing that it’s all due to better teaching or better students. But after 30 years of professors making these kinds of incremental changes, the amount of rise becomes so large that what’s happening becomes clear: mediocre students are getting higher and higher grades. It’s perhaps worth noting that if you strictly applied the above grading changes in a typical class of 100 at a four-year college today, you’d run out of B students to elevate to B+ students in about seven years.

Statements have been made by some that grade inflation is confined largely to selective and highly selective colleges and universities. The three charts above indicate that these statements are not correct. Significant grade inflation is present everywhere and contemporary rates of change in GPA are on average the same for public and private schools.

[364] Article: “Going Naked.” By Richard H. Hersh. American Association of Colleges and Universities, Peer Review, Spring 2007. link.gale.com/apps/doc/A167294615/AONE?u=anon~345482dd&sid=bookmark-AONE&xid=ea8b4b99

[T]he Collegiate Learning Assessment project (CLA) began as an approach to assessing core outcomes espoused by all of higher education—critical thinking, analytical reasoning, problem solving, and writing. (Fig. 1 provides a small sample of questions used in developing our scoring rubrics.) These outcomes cannot be taught sufficiently in any one course or major but rather are the collective and cumulative result of what takes place or does not place over the four to six years of undergraduate education in and out of the classroom.

The CLA is an institutional measure of value-added rather than an assessment of an individual student or course. It has now been used by more than two-hundred institutions and over 80,000 students in cross-sectional and longitudinal studies to signal where an institution stands with regard to its own standards and to other similar institutions….

[365] Book: Beyond the Bubble Test: How Performance Assessments Support 21st Century Learning. Edited by Linda Darling-Hammond and Frank Adamson. Jossey-Bass (an imprint of John Wiley & Sons), 2014.

Pages 71–72:

The CLA [Collegiate Learning Assessment] was developed to measure undergraduates’ learning—in particular, their ability to think critically, reason analytically, solve problems, and communicate clearly. …

Both the CLA and its high school counterpart, the CWRA [College and Work Readiness Assessment], differs substantially from most other standardized tests, which are based on an empiricist philosophy and a psychometric/behavioral tradition. …

The conceptual underpinnings of the CLA and CWRA are embodied in what has been called a criterion sampling approach to measurement. This approach assumes that the whole is greater than the sum of its parts and that complex tasks require an integration of abilities that cannot be captured if divided into and measured as individual components. The criterion sampling notion is straightforward: if you want to know what a person knows and can do, sample tasks from the domain in which she is to act, observe performance, and infer competence and learning. For example, if you want to know whether a person not only knows the laws that govern driving a car but can also actually drive a car, do not just give her a multiple-choice test. Also administer a driving test with a sample of tasks from the general driving domain (starting the car, pulling into traffic, turning right and left in traffic, backing up, parking). On the basis of this sample of performance, it is possible to draw more general, valid inferences about driving performance.

The CLA/CWRA follows the criterion-sampling approach by defining a domain of real-world tasks that are holistic and drawn from life situations.

[366] Book: Academically Adrift: Limited Learning on College Campuses. By Richard Arum and Josipa Roksa. University of Chicago Press, 2011.

Pages 32–33: “[T]he Council for Aid to Education … brought together leading national psychometricians at the end of the twentieth century to develop a state-of-the-art assessment instrument to measure undergraduate learning … the Collegiate Learning Assessment….”

Pages 35–36:

The Council for Aid to Education has also published a detailed scoring rubric on the criteria that it defines as critical thinking, analytical reasoning, and problem solving—including how well the student assesses the quality and relevance of evidence, analyzes and synthesizes data and information, draws conclusions from his or her analysis, and considers alternative perspectives. In addition, the scoring rubric with respect to written communication requires that the presentation is clear and concise, the structure of the argument is well-developed and effective, the work is persuasive, the written mechanics are proper and correct, and reader interest is maintained.71

71 Council for Aid to Education, Collegiate Learning Assessment Common Scoring Rubric (New York: Council for Aid to Education, 2008).

[367] Book: Academically Adrift: Limited Learning on College Campuses. By Richard Arum and Josipa Roksa. University of Chicago Press, 2011.

Pages 32–33:

Our research was made possible by a collaborative partnership with the Council for Aid to Education … and twenty-four four-year colleges and universities that granted us access to students who were scheduled to take the Collegiate Learning Assessment (CLA) in their first semester (Fall 2005) and at the end of their sophomore year (Spring 2007). … The schools are dispersed nationally across all four regions of the country. We refer to this multifaceted data as the Determinants of College Learning (DCL) dataset. … On most measures, students in the DCL dataset appeared reasonably representative of traditional-age undergraduates in four-year institutions, and the colleges and universities they attended resembled four-year institutions nationwide. The DCL students’ racial, ethnic, and family backgrounds as well as their English-language backgrounds and high school grades also tracked well with national statistics.

Page 159:

The overall retention rate from freshman to sophomore year across the twenty-four institutions included in the DCL dataset was slightly under 50 percent, although this varied notably across institutions and groups of students. If bias is introduced into our analyses by processes of selective attrition, however, it is likely in a direction that leads us to overestimate the overall rate of academic growth that is occurring in these institutions—that is, the dearth of learning we have identified would likely be even more pronounced if we had been able to track down and continue assessing the students who dropped out of the study and / or the institutions they originally attended.

[368] Book: Aspiring Adults Adrift: Tentative Transitions of College Graduates. By Richard Arum and Josipa Roksa. University of Chicago Press, 2014.

Page 37:

Over the full four years of college, students gained an average of 0.47 standard deviations on the CLA [Collegiate Learning Assessment].41 Thus, after four years of college, an average-scoring student in the fall of his or her freshman year would score at a level only eighteen percentile points higher in the spring of his or her senior year. Stated differently, freshmen who entered higher education at the 50th percentile would reach a level equivalent to the 68th percentile of the incoming freshman class by the end of their senior year. Since standard deviations are not the most intuitive way of understanding learning gains, it is useful to consider that if the CLA were rescaled to a one-hundred-point scale, approximately one-third of students would not improve more than one point over four years of college. …

41 A recent replication using data from the Wabash National Study of Liberal Arts Education, relying on a different sample and a multiple-choice measure of critical thinking (the Collegiate Assessment of Academic Proficiency, or CAAP), produced a virtually identical estimate; students in the Wabash Study gained 0.44 standard deviations on the CAAP measure of critical thinking over four years of college. See Ernest T. Pascarella and others, “How Robust Are the Findings of Academically Adrift?” Change: The Magazine of Higher Learning, May/ June 2011: 20–24.

Page 42:

The results indicate that students attending high-selectivity institutions improve on the CLA substantially more than those attending low-selectivity institutions, even when models are adjusted for students’ background and academic characteristics. This association between institutional selectivity and CLA performance is consistent with findings for persistence and graduation in other research. A range of factors, from greater expenditures to unique peer environments at high-selectivity schools, may help to account for these patterns.

Page 44:

These patterns indicate that the issues we have identified, namely weak academic engagement and limited learning, are widespread. They are not concentrated at a few institutions, or even at a specific type of institution. While students in more selective institutions gain more on the CLA, their gains are still modest, and while they spend more time studying alone, their average is still only slightly over ten hours per week.

Pages 137–139

Analyses presented in this book build on the Determinants of College Learning (DCL) dataset…. The CAE initiated the Collegiate Learning Assessment (CLA) Longitudinal Project in the fall of 2005, administering a short survey and the CLA instrument to a sample of freshmen at four-year institutions. The same students were contacted for the sophomore-year follow-up in the spring of 2007 and the senior-year follow-up in the spring of 2009. …

The senior-year sample included 1,666 respondents with valid CLA scores. … Characteristics of the senior-year sample thus correspond reasonably well with the characteristics of students from a nationally representative sample. …

While the CLA as a whole is considered by some as state of the art, the performance task component of the test is the best developed and most sophisticated part of the assessment instrument; it is the component that the Organisation for Economic Cooperation and Development adopted for its cross-national assessment of higher education students’ generic skill strand in the Assessment of Higher Education Learning Outcomes (AHELO) project.

We use students’ scores on the performance task of the CLA as an indicator of their critical thinking, complex reasoning, and writing skills. In addition to being the most developed, this performance task was the most uniformly administered component across time and institutions.

[369] Report: “The Literacy of America’s College Students.” By Justin D. Baer, Andrea L. Cook, and Stéphane Baldi. American Institutes for Research, January 2006. <www.air.org>

Page 4:

The NSACS [National Survey of America’s College Students], sponsored by The Pew Charitable Trusts, collected data from a sample of 1,827 graduating students at 80 randomly selected 2-year and 4-year colleges and universities (68 public and 12 private) from across the United States. The NSACS specifically targeted college and university students nearing the end of their degree program, thus providing a broader and more comprehensive picture of students’ fundamental literacy abilities than ever before.

The NSACS used the same assessment instrument as the 2003 National Assessment of Adult Literacy (NAAL), a nationally representative survey of the English-language literacy abilities of U.S. adults 16 and older residing in households or prisons. The NAAL was developed and administered by the U.S. Department of Education’s National Center for Education Statistics (NCES). Literacy levels were categorized as Below Basic, Basic, Intermediate, or Proficient on the basis of the abilities of participants.

Because literacy is not a single skill used in the same manner for all types of printed and written information, the NSACS measured literacy along three dimensions: prose literacy, document literacy, and quantitative literacy. These three literacy domains were designed to capture an ordered set of information-processing skills and strategies that adults use to accomplish a wide range of literacy tasks and make it possible to profile the various types and levels of literacy among different subgroups in society.

[370] Report: “The Literacy of America’s College Students.” By Justin D. Baer, Andrea L. Cook, and Stéphane Baldi. American Institutes for Research, January 2006. <www.air.org>

Page 4: “Prose Literacy: The knowledge and skills needed to perform prose tasks, that is, to search, comprehend, and use information from continuous texts. Prose examples include editorials, news stories, brochures, and instructional materials.”

Page 21: “Table 2.2. Percentage of U.S. Adults in College and the Nation in Each Prose Literacy Level, by Selected Characteristics”

[371] Report: “The Literacy of America’s College Students.” By Justin D. Baer, Andrea L. Cook, and Stéphane Baldi. American Institutes for Research, January 2006. <www.air.org>

Page 4: “Document Literacy: The knowledge and skills needed to perform document tasks, that is, to search, comprehend, and use information from noncontinuous texts in various formats. Document examples include job applications, payroll forms, transportation schedules, maps, tables, and drug or food labels.”

Page 22: “Table 2.3. Percentage of U.S. Adults in College and the Nation in Each Document Literacy Level, by Selected Characteristics”

[372] Report: “The Literacy of America’s College Students.” By Justin D. Baer, Andrea L. Cook, and Stéphane Baldi. American Institutes for Research, January 2006. <www.air.org>

Page 4:

Quantitative Literacy: The knowledge and skills required to perform quantitative literacy tasks, that is, to identify and perform computations, either alone or sequentially, using numbers embedded in printed materials. Quantitative examples include balancing a checkbook, figuring out a tip, completing an order form, or determining the amount of interest on a loan from an advertisement.

Page 23: “Table 2.4. Percentage of U.S. Adults in College and the Nation in Each Quantitative Literacy Level, by Selected Characteristics”

[373] Report: “The Literacy of America’s College Students.” By Justin D. Baer, Andrea L. Cook, and Stéphane Baldi. American Institutes for Research, January 2006. <www.air.org>

Page 5: “The literacy of students in 4-year public institutions was comparable to the literacy of students in 4-year private institutions.”

Page 30: “Prose literacy was higher for students in selective 4-year colleges, though differences between selective and nonselective 4-year colleges for document and quantitative literacy could not be determined because of the sample size.”

Page 34:

College students come from a variety of economic backgrounds, with some students supporting themselves and others relying on their families to pay for tuition and other necessities.1 Despite variations in income, most differences in the literacy of students across income groups were not significant (Table 4.1).

1 Students were asked whether they were financially independent or whether they were financially dependent on their parents. Depending on their answer, they were asked to report either their parents’ household income or their personal income. The financial information was combined to create a single measure of personal or parents’ household income.

[374] Report: “The Literacy of America’s College Students.” By Justin D. Baer, Andrea L. Cook, and Stéphane Baldi. American Institutes for Research, January 2006. <www.air.org>

Page 35: “Table 4.1. Average Prose, Document, and Quantitative Literacy Scores for U.S. Adults in 2- and 4-Year Colleges, by Income.”

[375] Calculated with data from the article: “Many Business Leaders Doubt U.S. Colleges Prepare Students.” By Preety Sidhu and Valerie J. Calderon. Gallup, February 26, 2014. <news.gallup.com>

On a five-point scale, where 5 means strongly agree and 1 means strongly disagree, please indicate your level of agreement with each of the following statements.

Higher education institutions in this country are graduating students with the skills and competencies that MY business needs.

1 Strongly disagree [=] 17% … 2 [=] 17% … 3 [=] 34% … 4 [=] 22% … 5 Strongly agree [=] 11% …

The study reported includes findings from the Gallup/Lumina Business Leaders Poll on Higher Education, a quantitative survey conducted to understand the perceptions of business leaders about the quality and effectiveness of American higher education institutions in preparing graduates for the workforce. Gallup conducted 623 interviews with business leaders in executive and senior roles at their company. The sample was from Dun & Bradstreet. A simple stratified random sample design was used for sampling businesses. Businesses were grouped into five strata based on sales revenue ($50,000–$499,999/$500,000–$4.9 million/$5 million–$14.9 million/$15 million–$49.9 million/$50 million–$100 million+). Businesses with larger sales revenue were oversampled to ensure enough completes for analysis. Weights were calculated to take into account sampling rate and the non-response rate by sales revenue and census region.

Gallup conducted surveys in English only from Nov. 25–Dec. 16, 2013. Up to five calls were made to each business to reach an eligible respondent.

The questionnaire was developed in consultation with representatives from Lumina Foundation and Gallup. All interviewing was supervised and conducted by Gallup’s full-time interviewing staff. For results based on the total sample size of 623 business leaders, one can say with 95% confidence that the margin of error attributable to sampling and other random effects is ±6 percentage points.

CALCULATION: 17% strongly disagree + 17% disagree + 34% neutral = 68%

[376] Report: “How College Contributes to Workforce Success: Employer Views on What Matters Most.” By Ashley Finley. Association of American Colleges and Universities and Hanover Research, April 2, 2021. <dgmg81phhvh63.cloudfront.net>

Page 1:

This report presents findings from an online survey that was conducted in October 2020 by the Association of American Colleges and Universities in partnership with Hanover Research.

The total respondent sample of 496 included equal numbers of executives and hiring managers who are responsible for making hiring and promotion decisions in US companies of various types and sizes across a wide range of industries…. Only respondents representing organizations at which a minimum of 25 percent of entry-level positions are filled by employees who hold an associate’s or bachelor’s degree were eligible for participation.

Page 15:

While nearly nine in ten employers (87 percent) report that they are at least “somewhat satisfied” with the ability of recent college graduates to apply the skills and knowledge learned in college to complex problems in the workplace, just under half (49 percent) are “very satisfied.” Moreover … just six in ten employers believe that college graduates possess the knowledge and skills needed to succeed in entry-level positions, and just over half (55 percent) believe they possess the knowledge and skills required for advancement and promotion.

Page 16: “Figure 12: Employers do not believe most graduates possess the level of preparedness needed for workforce success.”

Page 22: “Figure 16: Percentages of employers by age and education who are “very satisfied” with college graduates’ ability to apply the skills and knowledge learned in college to complex problems in the workplace. … All Employers [=] 49% … Under Age 40 [=] 59% … Aged 50 and Above [=] 28%”

NOTE: The margin of error was provided to Just Facts by the Association of American Colleges and Universities via e-mail on March 4, 2022.

[377] Report: “How Should Colleges Assess And Improve Student Learning? Employers’ Views On The Accountability Challenge.” Peter D. Hart Research Associates for the Association of American Colleges and Universities, January 9, 2008. <files.eric.ed.gov>

Page 1: “From November 8 to December 12, 2007, Peter D. Hart Research Associates, Inc., interviewed 301 employers whose companies have at least 25 employees and report that 25% or more of their new hires hold at least a bachelor’s degree from a four-year college. … The margin of error for this survey is ±5.7 percentage points.”

Page 3:

Employers believe that college graduates are reasonably well prepared in a variety of areas, but in no area do employers give them exceptionally strong marks. When asked to evaluate recent college graduates’ preparedness in 12 areas, employers give them the highest marks for teamwork, ethical judgment, and intercultural skills, and the lowest scores for global knowledge, self-direction, and writing. …

In none of the 12 areas tested does a majority of employers give college graduates a high rating (or “8,” “9,” or “10”) for their level of preparedness. …

Employers Evaluate College Graduates’ Preparedness In Key Areas

[378] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Accessed April 19, 2022 at <www.census.gov>

“Both Sexes, 25 to 64 Years, Total Work Experience, All Races” <www2.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[379] Report: “Income and Poverty in the United States: 2020.” By Emily Shrider and others. U.S. Census Bureau, September 14, 2021. <www.census.gov>

Page 22: “The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as those provided by the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, public housing, employer-provided fringe benefits, tax credits, or stimulus payments.”

Page 25:

Data on income collected in the ASEC [Current Population Survey Annual Social and Economic Supplements] by the U.S. Census Bureau cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Money income also excludes tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and special COVID-19-related stimulus payments. Money income does not reflect that some families receive noncash benefits such as Supplemental Nutrition Assistance/food stamps, health benefits, and subsidized housing. In addition, money income does not reflect that noncash benefits often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries more accurately than other sources of income, and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.

[380] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Accessed April 19, 2022 at <www.census.gov>

“Both Sexes, 25 to 64 Years, Total Work Experience, All Races” <www2.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[381] Report: “Income and Poverty in the United States: 2020.” By Emily Shrider and others. U.S. Census Bureau, September 14, 2021. <www.census.gov>

Page 22: “The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as those provided by the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, public housing, employer-provided fringe benefits, tax credits, or stimulus payments.”

Page 25:

Data on income collected in the ASEC [Current Population Survey Annual Social and Economic Supplements] by the U.S. Census Bureau cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Money income also excludes tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and special COVID-19-related stimulus payments. Money income does not reflect that some families receive noncash benefits such as Supplemental Nutrition Assistance/food stamps, health benefits, and subsidized housing. In addition, money income does not reflect that noncash benefits often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries more accurately than other sources of income, and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.

[382] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Accessed April 19, 2022 at <www.census.gov>

“Both Sexes, 25 to 64 Years, Total Work Experience, All Races” <www2.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[383] Report: “Income and Poverty in the United States: 2020.” By Emily Shrider and others. U.S. Census Bureau, September 14, 2021. <www.census.gov>

Page 22: “The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as those provided by the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, public housing, employer-provided fringe benefits, tax credits, or stimulus payments.”

Page 25:

Data on income collected in the ASEC [Current Population Survey Annual Social and Economic Supplements] by the U.S. Census Bureau cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Money income also excludes tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and special COVID-19-related stimulus payments. Money income does not reflect that some families receive noncash benefits such as Supplemental Nutrition Assistance/food stamps, health benefits, and subsidized housing. In addition, money income does not reflect that noncash benefits often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries more accurately than other sources of income, and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.

[384] Calculated with the dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Last revised October 8, 2021. <www.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[385] Dataset: “PINC-03. Educational Attainment – People 25 Years Old and Over, by Total Money Earnings in 2020, Work Experience in 2020, Age, Race, Hispanic Origin, and Sex.” U.S. Census Bureau. Accessed April 19, 2022 at <www.census.gov>

“Both Sexes, 25 to 64 Years, Total Work Experience, All Races” <www2.census.gov>

NOTES:

  • An Excel file containing the data and calculations is available upon request.
  • Like all Census Bureau measures of “money” income, this dataset doesn’t include noncash benefits like subsidized housing, food stamps, charitable services, and government or employer-provided health benefits. Also, the data is collected via government surveys, and low-income households substantially underreport their income on such surveys.

[386] Report: “Income and Poverty in the United States: 2020.” By Emily Shrider and others. U.S. Census Bureau, September 14, 2021. <www.census.gov>

Page 22: “The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as those provided by the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, public housing, employer-provided fringe benefits, tax credits, or stimulus payments.”

Page 25:

Data on income collected in the ASEC [Current Population Survey Annual Social and Economic Supplements] by the U.S. Census Bureau cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Money income also excludes tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and special COVID-19-related stimulus payments. Money income does not reflect that some families receive noncash benefits such as Supplemental Nutrition Assistance/food stamps, health benefits, and subsidized housing. In addition, money income does not reflect that noncash benefits often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries more accurately than other sources of income, and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.

[387] “WHO Director-General’s Opening Remarks at the Media Briefing on Covid-19.” World Health Organization, March 11, 2020. <bit.ly>

[Dr. Tedros Adhanom Ghebreyesus:] …

WHO [World Health Organization] has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction.

We have therefore made the assessment that COVID-19 can be characterized as a pandemic.

[388] The next three footnotes document that:

  • Private-sector economic output is equal to personal consumption expenditures (PCE) + gross private domestic investment (GPDI) + net exports of goods and services.
  • PCE is the “primary measure of consumer spending on goods and services” by private individuals and nonprofit organizations.
  • GPDI is a measure of private spending on “structures, equipment, and intellectual property products.”

Since education is not a service that is typically imported or exported, a valid approximation of private spending on education can be arrived at by summing PCE and GPDI. The fourth footnote below details the data used in this calculation.

[389] Report: “Fiscal Year 2013 Analytical Perspectives, Budget of the U.S. Government.” White House Office of Management and Budget, February 12, 2012. <www.gpo.gov>

Page 471:

The main purpose of the NIPAs [national income and product accounts published by the U.S. Bureau of Economic Analysis] is to measure the Nation’s total production of goods and services, known as gross domestic product (GDP), and the incomes generated in its production. GDP excludes intermediate production to avoid double counting. Government consumption expenditures along with government gross investment—State and local as well as Federal—are included in GDP as part of final output, together with personal consumption expenditures, gross private domestic investment, and net exports of goods and services (exports minus imports).

[390] Report: “Concepts and Methods of the U.S. National Income and Product Accounts, Chapter 5: Personal Consumption Expenditures.” U.S. Bureau of Economic Analysis. Updated November 2017. <www.bea.gov>

Page 5-1:

Personal consumption expenditures (PCE) is the primary measure of consumer spending on goods and services in the U.S. economy.1 It accounts for about two-thirds of domestic final spending, and thus it is the primary engine that drives future economic growth. PCE shows how much of the income earned by households is being spent on current consumption as opposed to how much is being saved for future consumption.

PCE also provides a comprehensive measure of types of goods and services that are purchased by households. Thus, for example, it shows the portion of spending that is accounted for by discretionary items, such as motor vehicles, or the adjustments that consumers make to changes in prices, such as a sharp run-up in gasoline prices.2

Page 5-2:

PCE measures the goods and services purchased by “persons”—that is, by households and by nonprofit institutions serving households (NPISHs)—who are resident in the United States. Persons resident in the United States are those who are physically located in the United States and who have resided, or expect to reside, in this country for 1 year or more. PCE also includes purchases by U.S. government civilian and military personnel stationed abroad, regardless of the duration of their assignments, and by U.S. residents who are traveling or working abroad for 1 year or less.

Page 5-67:

Nonprofit Institutions Serving Households

In the NIPAs [National Income and Product Accounts], nonprofit institutions serving households (NPISHs), which have tax-exempt status, are treated as part of the personal sector of the economy. Because NPISHs produce services that are not generally sold at market prices, the value of these services is measured as the costs incurred in producing them.

In PCE, the value of a household purchase of a service that is provided by a NPISH consists of the price paid by the household or on behalf of the household for that service plus the value added by the NPISH that is not included in the price. For example, the value of the educational services provided to a student by a university consists of the tuition fee paid by the household to the university and of the additional services that are funded by sources other than tuition fees (such as by the returns to an endowment fund).

[391] Report: “Measuring the Economy: A Primer on GDP and the National Income and Product Accounts.” U.S. Bureau of Economic Analysis, December 2015. <www.bea.gov>

Page 8: “Gross private domestic investment consists of purchases of fixed assets (structures, equipment, and intellectual property products) by private businesses that contribute to production and have a useful life of more than one year, of purchases of homes by households, and of private business investment in inventories.”

[392] Calculated with the dataset: “Table 2.4.5U. Personal Consumption Expenditures by Type of Product.” U.S. Bureau of Economic Analysis. Last revised January 27, 2022. <apps.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[393] Calculated with data from the report: “Early Learning and Child Care: Agencies Have Helped Address Fragmentation and Overlap Through Improved Coordination.” U.S. Government Accountability Office, July 2017. <www.gao.gov>

Page 2 (of PDF):

Multiple federal programs may provide or support early learning or child care for children age 5 and under. Of these programs, nine† describe early learning or child care as an explicit purpose and are administered by the Departments of Health and Human Services (HHS), Education (Education), and the Interior (Interior). Fiscal year 2015 obligations for these nine† programs totaled approximately $15 billion, with the vast majority of these funds concentrated in Head Start and the Child Care and Development Fund. An additional 35‡ programs did not have an explicit early learning or child care purpose, but permitted funds to be used for these services. Additionally, three§ tax expenditures subsidized individuals’ private purchase of child or dependent care.

Pages 2–3:

To address our objectives, we used three criteria to identify relevant programs: they (1) funded or supported early learning or child care services, (2) were provided to children age 5 and under, and (3) delivered services in an educational or child care setting. We limited our review to programs for which federal funds were obligated in fiscal year 2015, the most recent available obligations data at the time we conducted our work. We did not conduct a separate legal review to identify and analyze relevant programs or verify the accuracy of the information agencies provided to us.

To address our first objective, we started with the list of 45 programs and 5 tax expenditures in our 2012 review.4 We sent questionnaires to nine agencies and one regional commission included in the 2012 review and received responses from them all. We conducted follow-up interviews with agency officials to confirm that these programs and tax expenditures continued to meet all three of our criteria in fiscal year 2015. We also reviewed supplementary information, such as information from annual reports and program notices in the Federal Register, from the Departments of Education (Education), Health and Human Services (HHS), the Interior (Interior), and all the other agencies included in our prior review. After we created a preliminary list of programs, we counted the number of federal early learning and child care programs by examining the key benefits and services they provide.5 Using a similar definition as in our prior review, we considered a program to have an explicit early learning or child care purpose if, according to our analysis, early learning or child care is specifically described as a program purpose in the Catalog of Federal Domestic Assistance (CFDA) or in agency documents. We categorized all other programs included in this review as not having an explicit early learning or child care purpose. In this review, we also included tax expenditures that could be used to subsidize families or employers for early learning or child care related expenses.6 After we identified programs and tax expenditures that met our criteria, we obtained information about fiscal year 2015 program obligations from the President’s budget for fiscal year 2017. We used the Department of the Treasury’s (Treasury) Tax Expenditure Estimates for fiscal year 2017 to obtain information on estimated losses in revenue in fiscal year 2015 for tax expenditures.

CALCULATION: †9 programs + ‡35 programs + §3 tax expenditures = 47 programs

[394] Report: “Child Care: Information on Integrating Early Care and Education Funding.” U.S. Government Accountability Office, September 14, 2016. <www.gao.gov>

Page 1:

Every year millions of children under the age of 5 participate in federal and state early care and education programs. For fiscal years 2010 to 2015, Congress appropriated almost $48 billion to Head Start and over $31 billion to the Child Care and Development Fund (CCDF), the two largest sources of federal funding for early care and education. The Head Start program is administered by the Department of Health and Human Services (HHS) through about 1,800 grants to groups who deliver education, nutrition, health, and other social services to approximately 1 million children in poverty from birth to age 5 each year. Through Head Start, HHS funds two programs—Head Start, which provides early care and education to 3- and 4- year-olds, and Early Head Start, which serves pregnant women and children from birth up to age 3. CCDF funding is provided through a block grant to states and tribes to, among other things, help low-income, working families pay for child care (for children from birth to 12) so that parents can work, pursue an education, or attend job training. Additionally, states spend about $5.6 billion annually on state-funded prekindergarten (Pre-K) programs.1

[395] Report: “Budget of the U.S. Government: Fiscal Year 2023, Appendix.” Office of Management and Budget, March 2022. <www.whitehouse.gov>

Pages 473–474: “Payments to States for the Child Care and Development Block Grant … Program and Financing (in millions of dollars) … Obligations by program activity … Line 0001 … Child Care Block Grant Payments to States … 2021 actual [=] 5,849”

Pages 475–476: “Children and Families Services Programs … Program and Financing (in millions of dollars) … Obligations by program activity … Line 0101 Head Start … 2021 actual [=] 12,509”

[396] “WHO Director-General’s Opening Remarks at the Media Briefing on Covid-19.” World Health Organization, March 11, 2020. <bit.ly>

[Dr. Tedros Adhanom Ghebreyesus:] …

WHO [World Health Organization] has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction.

We have therefore made the assessment that COVID-19 can be characterized as a pandemic.

[397] Report: “Office of Head Start – Services Snapshot, National All Programs (2020–2021).” U.S. Department of Health & Human Services, Office of Head Start, November 2021. <eclkc.ohs.acf.hhs.gov>

Page 1:

This National Services Snapshot summarizes key data on demographics and services for children from birth to age five and pregnant women served by Head Start, Early Head Start, and Migrant and Seasonal Head Start programs. The data in this Snapshot is a subset of the annual Program Information Report (PIR) submission to the Office of Head Start. …

Total Cumulative Enrollment

Actual number of children and pregnant women served by the program throughout the entire program year, inclusive of enrollees who left during the program year and the enrollees who filled those empty places. Due to turnover, more children and families may receive Head Start services cumulatively throughout the program year (all of whom are reported in the PIR) than indicated by the funded enrollment numbers.

Total cumulative enrollment [=] 756,665

Children total cumulative enrollment [=] 744,898

Pregnant women total cumulative enrollment [=] 11,767

[398] Calculated with data from the report: “Head Start Federal Funding and Funded Enrollment History.” U.S. Department of Health & Human Services, Office of Head Start, July 22, 2021. <eclkc.ohs.acf.hhs.gov>

Page 2 (of PDF): “Head Start Appropriations and Funded Enrollment History … [Fiscal] Year 2020 … Federal Funding [=] $10,613,095,000 … Funded Enrollment [=] 852,501”

CALCULATION: $10,613,095,000 / 852,501 = $12,449

[399] Report: “Head Start Program Facts, Fiscal Year 2019.” U.S. Department of Health & Human Services, Office of Head Start. Last updated April 20, 2021. <eclkc.ohs.acf.hhs.gov>

Page 1 (of PDF):

Throughout this Fact Sheet, unless otherwise specified, the term “Head Start” refers to the Head Start program as a whole, including: Head Start services to preschool children; Early Head Start services to infants, toddlers, and pregnant women; services to families by American Indian and Alaska Native (AIAN) programs; and services to families by Migrant and Seasonal Head Start (MSHS) programs.

The term “funded enrollment” refers to the number of children and pregnant women that are supported by federal Head Start funds in a program at any one time during the program year; these are sometimes referred to as enrollment slots. Funded enrollment numbers include enrollment slots funded by state or other funds when used by grantees as required nonfederal match. States may provide additional funding to local Head Start programs, which is not included in federal Head Start reporting.

The term “cumulative enrollment” refers to the actual number of children and pregnant women that Head Start programs serve throughout the entire program year, inclusive of enrollees who left during the program year and the enrollees who filled those empty places. Due to turnover, more children and families may receive Head Start services cumulatively throughout the program year, all of whom are reported in the Program Information Report (PIR), than indicated by the funded enrollment numbers.

[400] Report: “Head Start: Undercover Testing Finds Fraud and Abuse at Selected Head Start Centers.” U.S. Government Accountability Office, May 18, 2010. <www.gao.gov>

Page 2 (of PDF):

The Head Start program, overseen by the Department of Health and Human Services and administered by the Office of Head Start, provides child development services primarily to low-income families and their children. Federal law allows up to 10 percent of enrolled families to have incomes above 130 percent of the poverty line—GAO [U.S. Government Accountability Office] refers to them as “over-income.” Families with incomes below 130 percent of the poverty line, or who meet certain other criteria, are referred to as “under-income”. Nearly 1 million children a year participate in Head Start, and the American Recovery and Reinvestment Act provided an additional $2.1 billion in funding.

GAO received hotline tips alleging fraud and abuse by grantees. In response, GAO investigated the validity of the allegations, conducted undercover tests to determine if other centers were committing fraud, and documented instances where potentially eligible children were put on Head Start wait lists. The investigation of allegations is ongoing.

To perform this work, GAO interviewed grantees and a number of informants and reviewed documentation. GAO used fictitious identities and bogus documents for proactive testing of Head Start centers. GAO also interviewed families on wait lists. Results of undercover tests and family interviews cannot be projected to the entire Head Start program. In a corrective action briefing, agency officials agreed to address identified weaknesses. …

GAO received allegations of fraud and abuse involving two Head Start nonprofit grantees in the Midwest and Texas. Allegations include manipulating recorded income to make over-income applicants appear under-income, encouraging families to report that they were homeless when they were not, enrolling more than 10 percent of over-income children, and counting children as enrolled in more than one center at a time. GAO confirmed that one grantee operated several centers with more than 10 percent over-income students, and the other grantee manipulated enrollment data to over-report the number of children enrolled. GAO is still investigating the other allegations reported.

Realizing that these fraud schemes could be perpetrated at other Head Start programs, GAO attempted to register fictitious children as part of 15 undercover test scenarios at centers in six states and the District of Columbia. In 8 instances staff at these centers fraudulently misrepresented information, including disregarding part of the families’ income to register over-income children into under-income slots. The undercover tests revealed that 7 Head Start employees lied about applicants’ employment status or misrepresented their earnings. This leaves Head Start at risk that over-income children may be enrolled while legitimate under-income children are put on wait lists. At no point during our registrations was information submitted by GAO’s fictitious parents verified, leaving the program at risk that dishonest persons could falsify earnings statements and other documents in order to qualify. In 7 instances centers did not manipulate information.

Page 10:

Case: 12 … State: California … Undercover scenario: Income exceeded poverty guidelines … Case details:

• The income for the family of three (mother, father, and child) was $12,000 more than allowed for the family to be considered income-eligible.

• A Head Start associate denied this application because the family was over-income.

• The Head Start associate explained that families often lie about being separated or divorced in order to reduce their income and that Head Start is not strict about checking whether that is true. …

We also identified a key vulnerability during our investigation that could allow over-income children to be enrolled in other Head Start centers: income documentation for enrollees is not required to be maintained by grantees. According to HHS [Department of Health and Human Services] guidance, Head Start center employees must sign a statement attesting that the applicant child is eligible and identifying which income documents they examined, such as W-2s or pay stubs; however, they do not have to maintain copies of them. We discovered that the lack of documentation made it virtually impossible to determine whether only under-income children were enrolled in spots reserved for under-income children.

[401] Report: “Head Start: Action Needed to Enhance Program Oversight and Mitigate Significant Fraud and Improper Payment Risks.” U.S. Government Accountability Office, September 2019. <www.gao.gov>

Page 2 (of PDF):

Why GAO [U.S. Government Accountability Office] Did This Study

Congress appropriated over $10 billion for programs under the Head Start Act, to serve approximately 1 million children through about 1,600 Head Start grantees and their centers nationwide. This report discusses (1) what vulnerabilities GAO’s covert tests identified in selected Head Start grantees’ controls for program eligibility screening; (2) the extent to which OHS [Office of Head Start] provides timely monitoring of grantees; and (3) what control vulnerabilities exist in OHS’s methods for ensuring grantees provide services for all children and pregnant women they are funded to serve. GAO conducted 15 nongeneralizable covert tests at Head Start centers in metropolitan areas. GAO selected only centers that were underenrolled to be sure we did not displace any actual, eligible children.

Page 2: “You asked us to review the Head Start program to see whether the

internal control vulnerabilities we identified in 2010 persist.”

Page 5:

We conducted this performance audit from October 2017 to July 2019 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. We conducted our related investigative work in accordance with investigative standards prescribed by the Council of the Inspectors General on Integrity and Efficiency.

Page 16:

Our covert tests and eligibility file reviews for selected Head Start grantees found control vulnerabilities and potential fraud and improper payment risks that OHS has not fully assessed. While our covert tests and eligibility file reviews are nongeneralizable, they nonetheless illustrate that Head Start center staff do not always properly verify eligibility and exemplify control vulnerabilities that present fraud and improper payment risks to the Head Start program. Leading practices for managing fraud risks state that agencies should assess fraud risks as part of a strategy to mitigate the likelihood and effect of fraud. During this review, OHS officials told us they did not believe the program was at risk of fraud or improper payments. However, OHS has not performed a comprehensive fraud risk assessment to support this determination.

Pages 17–18:

In seven of 15 covert tests, the Head Start centers correctly determined we were not eligible. In these seven tests, staff at the Head Start centers categorized our applications as over-income. In some cases, the staff recommended other child-care services or placed us on a waitlist as an over-income applicant, as permitted by program rules.

In three of 15 covert tests, we identified control vulnerabilities, as Head Start Center staff encouraged us to attend without following all eligibility-verification requirements.

• In one of these three cases, we did not provide any documentation to support claims of receiving public assistance and earned wages, as required by program regulations, but we were still accepted into the program.

• In the second of these three cases, we did not provide any documentation to support claims of receiving cash income from a third-party source, as required by program regulations, but Head Start staff encouraged us to attend nonetheless.

• In the third of these three cases, center staff emphasized we would need to indicate income below a specific amount (the federal poverty level) so that we would qualify. We later retrieved our eligibility documents from this center’s files and found that some documents in the file noted the grantee had reviewed our income information—though we had provided none—and other documents in the file noted the grantee was still waiting on our income documentation. We were eventually contacted by Head Start center personnel and told we were accepted into the program and asked to provide income documentation, though our income had not yet been verified.

While these three cases showed several vulnerabilities, such as instructions regarding income limit and approval without the documentation, we did not categorize these three cases as potential fraud because we did not have evidence of staff knowingly and willfully making false statements or encouraging our applicant to make a statement they knew to be false. Also, in each of these three cases, we were told we could bring the missing documentation when the child began attendance or at orientation.

In the remaining five of 15 covert tests, we found indicators of potential fraud, as described in greater detail below. We plan to refer these five cases of potential fraud to the HHS [U.S. Department of Health and Human Services] Office of Inspector General (OIG) for further action as appropriate.

• In three of these five potential fraud cases, documents we later retrieved from the Head Start centers’ files showed that our applications were fabricated to exclude income information we provided, which would have shown the family to be over-income. For example, in one case the Form 1040 Internal Revenue Service (IRS) tax form we submitted as proof of income was replaced with another fabricated 1040 tax form. The fabricated 1040 tax form showed a lowered qualifying income amount, and the applicant signature was forged.

• In two of the five potential fraud cases, Head Start center staff dismissed eligibility documentation we offered during the enrollment interview. For example, in one case we explained we had two different jobs and offered an IRS W-2 Wage and Tax Statement (W-2) for one job and an employment letter from a separate employer. The combined income for these jobs would have shown the family to be over-income. However, the Head Start center only accepted income documentation from one job and told us we did not need to provide documentation of income from the second job—actions which made our applicant erroneously appear to be below the federal poverty level.

[402] Calculated with the dataset: “Table 202.10. Enrollment of 3-, 4-, and 5-Year-Old Children in Preprimary Programs, by Age of Child, Level of Program, Control of Program, and Attendance Status: Selected Years, 1970 Through 2018.” U.S. Department of Education, National Center for Education Statistics, July 2019. <nces.ed.gov>

“Preprimary programs include kindergarten and preschool (or nursery school) programs. ‘Preschool,’ which was referred to as ‘nursery school’ in previous versions of this table, is defined as a group or class that is organized to provide educational experiences for children during the year or years preceding kindergarten.”

NOTE: An Excel file containing the data and calculations is available upon request.

[403] Calculated with the dataset: “Table 202.10. Enrollment of 3-, 4-, and 5-Year-Old Children in Preprimary Programs, by Age of Child, Level of Program, Control of Program, and Attendance Status: Selected Years, 1970 Through 2018.” U.S. Department of Education, National Center for Education Statistics, July 2019. <nces.ed.gov>

“Preprimary programs include kindergarten and preschool (or nursery school) programs. ‘Preschool,’ which was referred to as ‘nursery school’ in previous versions of this table, is defined as a group or class that is organized to provide educational experiences for children during the year or years preceding kindergarten.”

NOTE: An Excel file containing the data and calculations is available upon request.

[404] Webpage: “Fact Sheet: President Obama’s Plan for Early Education for All Americans.” White House, Office of the Press Secretary, February 13, 2013. <obamawhitehouse.archives.gov>

In his State of the Union address, President Obama called on Congress to expand access to high-quality preschool to every child in America. As part of that effort, the President will propose a series of new investments that will establish a continuum of high-quality early learning for a child—beginning at birth and continuing to age 5. …

High-quality early childhood education provides the foundation for all children’s success in school and helps to reduce achievement gaps. Despite the individual and economic benefits of early education, our nation has lagged in its commitment to ensuring the provision of high quality public preschool in our children’s earliest years. …

Preschool for All

The President’s proposal will improve quality and expand access to preschool, through a cost sharing partnership with all 50 states, to extend federal funds to expand high-quality public preschool to reach all low- and moderate-income four-year olds from families at or below 200% of poverty. … The proposal would include an incentive for states to broaden participation in their public preschool program for additional middle-class families, which states may choose to reach and serve in a variety of ways, such as a sliding-scale arrangement. …

The proposal also encourages states to expand the availability of full-day kindergarten. …

The President will also launch a new Early Head Start–Child Care Partnership program, to support states and communities that expand the availability of Early Head Start and child care providers that can meet the highest standards of quality for infants and toddlers, serving children from birth through age 3. Funds will be awarded through Early Head Start on a competitive basis to enhance and support early learning settings; provide new, full-day, comprehensive services that meet the needs of working families; and prepare children for the transition into preschool. …

The President is proposing to expand the Administration’s evidence-based home visiting initiative, through which states are implementing voluntary programs that provide nurses, social workers, and other professionals to meet with at-risk families in their homes and connect them to assistance that impacts a child’s health, development, and ability to learn.

[405] Webpage: “Summary of Senate Bill S.1380: Strong Start for America’s Children Act of 2015.” U.S. Congress. Accessed August 8, 2015 at <www.congress.gov>

This bill directs the Department of Education (ED) to allot matching grants to states and, through them, subgrants to local educational agencies, childhood education program providers, or consortia of those entities to implement high-quality prekindergarten programs for children from low-income families.

Grants are allotted to states based on each state’s proportion of children who are age four and who are from families with incomes at or below 200% of the poverty level.

“High-quality prekindergarten programs” are those that serve children three or four years of age and meet criteria concerning: class size; learning environments; teacher qualifications, salaries, and professional development; program monitoring; and accessibility to comprehensive health and support services.

States may apply to use up to 15% of their grant for subgrants to high-quality early childhood education and care programs for infants and toddlers whose family income is at or below 200% of the poverty level.

ED and the Department of Health and Human Services (HHS) shall develop a process to: (1) provide Head Start program services to children younger than age four in states or regions that already provide four-year-olds whose family income is at or below 200% of the poverty level with sustained access to high-quality prekindergarten programs, or (2) convert programs to serve infants and toddlers.

ED shall award competitive matching grants to states to increase their capacity to offer high-quality prekindergarten programs. States must provide assurances that they will use their grant to become eligible, within three years of receiving the grant, for this Act’s grants for high-quality prekindergarten programs. …

[406] Webpage: “Cosponsors of Senate Bill S.1380: Strong Start for America’s Children Act of 2015.” U.S. Congress. Accessed December 30, 2016 at <www.congress.gov>

Sponsor: Murray, Patty [D-WA] (Introduced 05/19/2015)

Cosponsors (24):

Casey, Robert P., Jr. [D-PA]

Hirono, Mazie K. [D-HI]

Franken, Al [D-MN]

Markey, Edward J. [D-MA]

Schatz, Brian [D-HI]

Udall, Tom [D-NM]

Kaine, Tim [D-VA]

Mikulski, Barbara A. [D-MD]

Murphy, Christopher S. [D-CT]

Durbin, Richard [D-IL]

Coons, Christopher A. [D-DE]

Heinrich, Martin [D-NM]

Whitehouse, Sheldon [D-RI]

Baldwin, Tammy [D-WI]

Cantwell, Maria [D-WA]

Gillibrand, Kirsten E. [D-NY]

Wyden, Ron [D-OR]

Booker, Cory A. [D-NJ]

Warren, Elizabeth [D-MA]

Sanders, Bernard [I-VT]

Klobuchar, Amy [D-MN]

Cardin, Benjamin L. [D-MD]

Tester, Jon [D-MT]

Reed, Jack [D-RI]

[407] Article: “Exceedingly Social, But Doesn’t Like Parties.” By Michael Powell.

Washington Post, November 5, 2006. <www.washingtonpost.com>

Quoting Sanders: “I’m a democratic socialist.”

[408] Article: “Bernie Sanders: Obamacare Is a ‘Good Republican Program.’ ” By Bryan Koenig. CNN, September 24th, 2013. <politicalticker.blogs.cnn.com>

“Sanders, an Independent who caucuses with Senate Democrats, reiterated his support of a universal single-payer Medicare for all, inspired by health care programs in Europe.”

[409] Webpage: “Party Division in the Senate, 1789–Present.” U.S. Senate Historical Office. Accessed August 8, 2015 at <www.senate.gov>

Note: Statistics listed below reflect party division immediately following the election, unless otherwise noted. The actual number of senators representing a particular party often changes during a congress, due to the death or resignation of a senator, or as a consequence of a member changing parties.

114th Congress (2015–2017)

Majority Party: Republican (54 seats)

Minority Party: Democrat (44 seats)

Other Parties: 2 Independents (both caucus with the Democrats)

Total Seats: 100

[410] Webpage: “Major Actions of Senate Bill S.1380: Strong Start for America’s Children Act of 2015.” U.S. Congress. Accessed December 30, 2016 at <www.congress.gov>

“05/19/2015: Introduced in Senate”

[411] Webpage: “Fact Sheet: The American Families Plan.” White House, Office of the Press Secretary, April 28, 2021. <www.whitehouse.gov>

Today, President Biden announced the American Families Plan, an investment in our kids, our families, and our economic future. …

Universal Pre-School for All Three- and Four-Year-Olds

President Biden is calling for a national partnership with states to offer free, high-quality, accessible, and inclusive preschool to all three-and four-year-olds, benefitting five million children and saving the average family $13,000, when fully implemented. This historic $200 billion investment in America’s future will first prioritize high-need areas and enable communities and families to choose the settings that work best for them. The President’s plan will also ensure that all publicly-funded preschool is high-quality, with low student-to-teacher ratios, high-quality and developmentally appropriate curriculum, and supportive classroom environments that are inclusive for all students. The President’s plan will leverage investments in tuition-free community college and teacher scholarships to support those who wish to earn a bachelor’s degree or another credential that supports their work as an educator, or to become an early childhood educator. And, educators will receive job-embedded coaching, professional development, and wages that reflect the importance of their work. All employees in participating pre-K programs and Head Start will earn at least $15 per hour, and those with comparable qualifications will receive compensation commensurate with that of kindergarten teachers. These investments will give American children a head start and pave the way for the best-educated generation in U.S. history. …

Building on the American Jobs Plan’s investments in school and child care infrastructure and workforce training, President Biden’s American Families Plan will ensure low and middle-income families pay no more than 7 percent of their income on high-quality child care for children under 5 years-old, saving the average family $14,800 per year on child care expenses, while also generating lifetime benefits for three million children, supporting hundreds of thousands of child care providers and workers, allowing roughly one million parents, primarily mothers, to enter the labor force, and significantly bolstering inclusive and equitable economic growth. Specifically, President Biden’s plan will invest $225 billion to:

Make child care affordable. Families will pay only a portion of their income based on a sliding scale. For the most hard-pressed working families, child care costs for their young children would be fully covered and families earning 1.5 times their state median income will pay no more than 7 percent of their income for all children under age five. The plan will also provide families with a range of inclusive and accessible options to choose from for their child, from child care centers to family child care providers to Early Head Start.

[412] Webpage: “The Build Back Better Framework.” White House. Accessed February 28, 2022 at <www.whitehouse.gov>

The Build Back Better Framework …

Offers universal and free preschool for all 3- and 4-year-olds, the largest expansion of universal and free education since states and communities across the country established public high school 100 years ago. … The Build Back Better framework will enable states to expand access to free preschool for more than 6 million children per year and increase the quality of preschool for many more children already enrolled. Importantly, parents will be able to send children to high-quality preschool in the setting of their choice—from public schools to child care providers to Head Start. …

The Build Back Better framework will ensure that middle-class families pay no more than 7 percent of their income on child care and will help states expand access to high-quality, affordable child care to about 20 million children per year—covering 9 out of 10 families across the country with young children. For two parents with one toddler earning $100,000 per year, the framework will produce more than $5,000 in child care savings per year. Nearly all families of four making up to $300,000 per year will be eligible.

[413] House Resolution 5376: “Build Back Better Act.” U.S. House of Representatives, 117th Congress (2021–2022). Accessed February 28, 2022 at <www.congress.gov>

Subtitle D—Child Care and Universal Pre-Kindergarten

Section 23001. Birth Through Five Child Care and Early Learning Entitlement. …

(D) Eligible child.—The term “eligible child” means an individual (without regard to the immigration status of the individual or of any parent of the individual)—

(i) who is less than 6 years of age;

(ii) who is not yet in kindergarten;

(iii) whose family income—

(I) does not exceed 100 percent of the State median income for a family of the same size for fiscal year 2022;

(II) does not exceed 115 percent of such State median income for fiscal year 2023;

(III) does not exceed 130 percent of such State median income for fiscal year 2024; and

(IV) for each of the fiscal years 2025 through 2027, is of any level;

(iv) whose family assets do not exceed $1,000,000 (as certified by a member of such family); and

(v) who—

(I) resides with a parent participating in an eligible activity;

(II) is included in a population of vulnerable children identified by the lead agency involved, which at a minimum shall include children experiencing homelessness, children in foster care, children in kinship care, and children who are receiving, or need to receive, child protective services; or

(III) resides with a parent who is more than 65 years of age. …

(c) Appropriations.—

(1) In general.—In addition to amounts otherwise available, there is appropriated to the Department of Health and Human Services, out of any money in the Treasury not otherwise appropriated, for carrying out this section—

(A) $20,000,000,000 for fiscal year 2022, to remain available until September 20, 2025,

(B) $30,000,000,000 for fiscal year 2023, to remain available until September 30, 2026

(C) $40,000,000,000 for fiscal year 2024, to remain available until September 30, 2027;

(D) such sums as may be necessary for each of fiscal years 2025 through 2027, to remain available for one fiscal year. …

(d) Establishment of Birth Through Five Child Care and Early Learning Entitlement Program.—

(1) In general.—The Secretary is authorized to administer a child care and early learning entitlement program under which families, in States, territories, and Indian Tribes with an approved application under subsection (f) or (g), shall be provided an opportunity to obtain high-quality child care services for eligible children, subject to the requirements this section.

(2) Assistance for every eligible child.—Beginning on October 1, 2024, every family who applies for assistance under this section with respect to a child in a State with an approved application under subsection (g), or in a territory or Indian tribe with an approved application under subsection (f), and who is determined, by a lead agency (or other entity designated by a lead agency) following standards and procedures established by the Secretary by rule, to be an eligible child, shall be offered child care assistance in accordance with and subject to the requirements and limitations of this section. …

(E) Sliding fee scale for copayments.—

(i) In general.—Except as provided in clauses (ii)(I) and (iii), the State plan shall provide an assurance that the State will for the period covered by the plan use a sliding fee scale … to determine a copayment for a family receiving assistance under this section….

(ii) Sliding fee scale.—A full copayment … shall use a sliding fee scale that provides that, for a family with a family income—

(I) of not more than 75 percent of State median income for a family of the same size, the family shall not pay a copayment, toward the cost of the child care involved for all eligible children in the family;

(II) of more than 75 percent but not more than 100 percent of State medican income for a family of the same size, the copayment shall be more than 0 but not more than 2 percent of that family income, toward such cost for all such children;

(III) of more than 100 percent but not more than 125 percent of State median income for a family of the same size, the copayment shall be more than 2 but not more than 4 percent of that family income, toward such cost for all such children;

(IV) of more than 125 percent but not more than 150 percent of State median income for a family of the same size, the copayment shall be more than 4 but not more than 7 percent of that family income, toward such cost for all such children; and

(V) of more than 150 percent of the State median income for a family of the same size, the copayment shall be 7 percent of that family income, toward such cost for all such children. …

Section 23002. Universal Preschool. …

(5) Eligible child.—The term “eligible child” means a child who is age 3 or 4, on the date established by the applicable local educational agency for kindergarten entry. …

(c) Payments for State Universal Preschool Services. …

(2) Payments to states.—

(A) Preschool services.—The Secretary shall pay to each State with an approved State plan … an amount for each year equal to—

(i) 100 percent of the State’s expenditures in the year for preschool services described in subsection (d), for each of fiscal years 2022, 2023, and 2024;

(ii) 90 percent of the State’s expenditures in the year for such preschool services, for fiscal year 2025;

(iii) 80 percent of the State’s expenditures in the year for such preschool services, for fiscal year 2026;

(iv) 70 percent of the State’s expenditures in the year for such preschool services, for fiscal year 2027; and

(v) 60 percent of the State’s expenditures in the year for such preschool services, for fiscal year 2028. …

(6) State plan.—In order to be eligible for payments under this section, the Governor of a State shall submit a State plan for universal, high-quality, free, inclusive, and mixed delivery preschool services to the Secretary for approval….

[414] Calculated with data from Vote 385: “Build Back Better Act.” U.S. House of Representatives, November 19, 2021. <clerk.house.gov>

Party

Voted “Yes”

Voted “No”

Voted “Present” or Did Not Vote †

Number

Portion

Number

Portion

Number

Portion

Republican

0

0%

212

100%

1

0%

Democrat

220

100%

1

0%

0

0%

Independent

0

0%

0

0%

0

0%

NOTE: † Voting “Present” is effectively the same as not voting.

[415] Webpage: “Party Division in the Senate, 1789–Present.” U.S. Senate Historical Office. Accessed February 28, 2022 at <www.senate.gov>

117th Congress (2021–2023)

Majority Party: Democrats (48 seats)

Minority Party: Republicans (50 seats)

Other Parties: 2 Independents (both caucus with the Democrats)

Total Seats: 100

Note: From January 3, 2021, to January 20, 2021, party division stood at 51 Republicans, 46 Democrats, 2 Independents (who caucused with the Democrats), and 1 vacancy. Both Senate seats in Georgia were up for election in 2020—the Class 2 seat held by Senator David Perdue, and the Class 3 seat held by appointed senator Kelly Loeffler (special election). … Democrats Jon Ossoff and Raphael Warnock defeated Perdue and Loeffler, respectively, in the run-off elections and were sworn in on January 20, bringing the party division to 50 Republicans, 48 Democrats, and 2 Independents (who caucus with the Democrats). Democrats hold the majority due to the tie-breaking vote of Vice President Kamala Harris.

[416] Article: “Manchin, Key Dem, Says Build Back Better Bill Is ‘Dead.’ ” By Alan Fram. Associated Press, February 1, 2022. <