Low-Income Students

As we've mentioned before, the economic downturn has had significant effects on families and schools across the nation.  With increases in unemployment, food prices, and energy costs, it's no surprise that many families are relying more on services provided by schools, including free and reduced price meals.  The School Nutrition Association (SNA) recently released a report detailing the effect of the recession on participation in school meal programs in the 2008-09 school year.

SNA collected information from 137 school nutrition programs in 38 states that included student enrollment, changes in student participation in free, reduced price, and paid lunch and breakfast, and factors contributing to those changes.  The report also provides policy recommendations and collects comments from school nutrition administrators.

Yesterday, New America’s Early Education Initiative and Federal Education Budget Project brought together Susan Neuman, a professor of education at the University of Michigan and a former assistant Secretary of Education, and Doug Besharov, a professor at the University of Maryland and fellow at the American Enterprise Institute, to discuss high-quality early childhood interventions that help poor children succeed in school and life.

The Congressional Budget Office (CBO) is currently working on their 2009 "Budget Options" publication.  This report, which is published in odd numbered years, contains cost or savings estimates for numerous possible changes to federal programs. 

In the last three publications, CBO estimated the cost of a significant change to the Child Nutrition Program - eliminating federal reimbursement to school districts for full-price breakfasts and lunches for students whose family incomes are more than 350 percent of poverty.  At the same time, it would increase the reduced-price breakfast and lunch subsidy by $0.20. 

In 2007 CBO estimated that such a change would save more than $2.5 billion over five years and better "target" federal funding to poor children.   While the report recognized this change could undermine the finances of school nutrition programs, it failed to discuss the cost of identifying students whose families make more than 350 percent of poverty. 

Here at the Federal Education Budget Project, which houses Ed Money Watch, we make federal education funding information more transparent and accessible to the public, researchers, and policymakers.   To this end, we are proud to release state and school district level data on federal funding for school nutrition programs. As the second largest federal funding source for public schools after Title I at over $13 billion in 2008, tracking these programs is particularly important now as school districts across the country are struggling due to unstable budgets and increased food prices.

Federal school nutrition programs consist of two main funding streams, both out of the Department of Agriculture (USDA).  The National School Lunch Program (NSLP) supports student nutrition in over 101,000 schools and residential facilities. It provides free and reduced priced meals to low-income children before, during, and after school, and over the summer. In fiscal year 2008, federal school nutrition programs subsidized more than five billion meals served to over 31 million students.

After the No Child Left Behind Act passed Congress in 2002, one education policy expert quipped that they should rename the Elementary and Secondary Education Act (of which NCLB is the most recent reauthorization) the Elementary Education Act, because NCLB largely ignored high schools.

NCLB's funding and accountability requirements do focus primarily on the elementary and middle grades. Some high school reform advocates are seeking to broaden the law to more directly address the needs of high schools.

That's not to suggest that federal policy ignores high school students entirely. In fact, the federal government spends some $7 billion every year on educational programs targeted to high-school-age youth and young adults. But the largest of these programs-accounting for 83 percent of federal investment in youth education-are outside of NCLB.

A new report from the Federal Education Budget Project, Slipping Through the Cracks: Federal Investments in High-School-Age Youth, takes a closer look at the more than 30 federal programs that support youth education and training. While many of these programs provide worthwhile services to at-risk youth and young adults, these investments are generally less effective and efficient than they could be.  Specifically, the report identifies four areas of concern.

The recently enacted "bailout" bill was not entirely for Wall Street - the final bill included over $107 billion in tax breaks and other benefits for consumers, business owners, schools and students.  The bill does not include any new programs to help lower the cost of higher education or solve school district budget crises, but it does expand or extend some valuable and important pre-existing education programs. 

The Emergency Economic Stabilization Act of 2008 extends the current $4,000 per year college tuition tax deduction through 2009, reducing revenue by an estimated $3.1 billion in 2009.  The deduction was previously slated to expire in 2008.  The classroom expenses tax credit for teachers and other school employees was also extended through 2009.  The tax credit limit remains $250 per year and is expected to cost $214 million in forgone revenue in 2009.

Speaking at a Congressional roundtable on college endowment spending on Monday, college leaders and lobbyists offered a multitude of reasons why requiring institutions of higher education to spend a minimum amount of their endowments each year is bad policy and fundamentally unworkable. Among their arguments, they claim that a mandatory payout of endowment funds would be overly burdensome on institutions; would harm future generations of students on their campuses by depleting present resources; and would serve no public good.

We respectfully disagree. At Higher Ed Watch, we have offered a proposal for a mandatory payout that renders most of these objections moot. Our plan would require the wealthiest colleges to spend a specific percentage of the market value of their endowment funds each year, with the difference between their current spending rate and the new threshold going to concrete, measurable projects aimed at improving socioeconomic diversity among students and applicants.

Co-hosted by Sen. Charles Grassley (R-Iowa), the ranking member of the Senate Finance Committee, and Rep. Peter Welch (D-Vt.), who moderated the discussion, yesterday's event featured experts on college endowment practices, higher education leaders and lobbyists, and watchdog groups [Disclosure: the author of this post participated in the roundtable.] Ostensibly, the event's three major goals were to (1) provide a better understanding of the link between college costs and tuition, (2) define and classify university endowments, and (3) debate whether institutional endowments should be subject to a mandatory annual payout. Ultimately, the discussion largely focused on reasons that colleges believe requiring a minimum spending rate would be inadvisable.

Poor states, communities, and children persistently get the short end of the stick in school funding. Education spending policies at all levels-federal, state, and local-layer on inequities that disproportionately benefit high-wealth school districts and lead to large funding disparities between high- and low-poverty communities. A new report from Education Sector and the Center on Reinventing Public Education seeks to quantify the cumulative impacts of these inequities on local schools. The results are striking. Addressing these inequities should be a key priority for federal and state policymakers.

The Education Sector/Center on Reinventing Public Education report examines two elementary schools in neighboring states that serve similar populations but receive very different levels of federal, state, and local funding. Cameron Elementary in Fairfax County, Va., receives more than twice the per pupil funding Ponderosa Elementary in Cumberland County, N.C., receives even though both schools serve predominantly low-income populations in poorer sections of their respective counties. These funding disparities are the result of funding distribution structures that disproportionately benefit wealthier states, districts, and schools over poorer states, districts, and schools.

By Art Hauptman

Both Sens. Barack Obama (D-IL) and Hillary Clinton (D-NY) have made achieving greater college affordability a high profile issue in their Presidential campaigns. To reach this goal, the two Democratic candidates have proposed expanding Pell Grants and consolidating the current set of tax breaks for college into a single refundable tuition tax credit. Sen. John McCain (R-AZ) has thus far been strangely silent on the topic, despite its importance to so many millions of Americans.

The reach of the Democratic contenders' proposals does not match their rhetoric, however. To truly make college more affordable, the next President will need to push for a much fuller integration of student aid and tax provisions for higher education, as I suggested in my guest post last week.

Any effort to change the current system (or non-system) of student financial assistance should first recognize that federal higher education policy has two distinct goals. The first is to eliminate the chronic gaps in the rates at which students from low-income and high-income families (and between minority students and white students) enroll in and graduate from college. Call this the accessibility problem. The second big goal is to make college more affordable for millions of students from middle class and upper middle class families who have found the ever growing price of college to be a real strain on their budgets. Call this the affordability problem.

The Los Angeles Times recently provided a disturbing example of how some for-profit trade schools like Corinthian Colleges have been pushing subprime, high-risk students to assume heavy levels of debt that they may never be able to repay. In an article on the credit crunch, the LA Times quoted a 20 year old student, with a 10 month old baby, who is taking classes at Everest College in West Los Angeles to become a medical assistant. To pay for an eight week course at the Corinthian-owned school, this student has had to take out an $8,000 private loan with an 8 percent interest rate. The student, and several friends with similar loans, told the newspaper "that they knew that repayment would be difficult on the $9 an hour or so they expected to earn if they got jobs." The course, they said, gave them "75% to 90% of what they need to get and keep a job."

[slideshow] The students say the loans were worth taking because they gave them an opportunity to attend the school. But they probably won't be so happy when they go into repayment, particularly if those jobs don't materialize. They may be even more disappointed when they discover that they could have gotten the same training for a fraction of the cost at the nearby Pasadena City Colleges, which according to the LA Times, "charges $628 annually in tuition and fees to in-state residents."

If there is a silver lining to the credit crunch, it is that for-profit colleges and loan companies, like Sallie Mae, are being forced to think twice before pushing high-risk borrowers to take on expensive private loan debt that they have little hope of ever paying back.