Education

Government Shutdown Strands Departments of Education, HHS with Few Staff, No Money

October 1, 2013

This post also appeared on our sister blogs, Early Ed Watch and Higher Ed Watch.

Congress spent the final moments of fiscal year 2013 last night in the throes of a debate over funding the government. Unable to reach agreement despite days of back-and-forth between the House and Senate, however, the government officially shut down at midnight on September 30.

Federal agencies were ordered just before midnight to begin implementing plans for a federal shutdown absent funding for fiscal year 2014, which began on October 1. Skeleton crews will remain in place at the Departments of Education and Health and Human Services (HHS) for the length of the shutdown, but most employees will be furloughed.

The first few days of the shutdown likely won’t be very severe. Education programs funded with mandatory spending—including Pell Grants and federal student loans—will continue to operate as normal. And most of the big K-12 programs, namely Title I grants to low-income students and IDEA special education grants to states, have already seen a substantial portion of their funding disbursed. Those and other programs that have already been awarded will be okay in the short term.

Some other programs won’t be so lucky. About 20 Head Start programs, enrolling nearly 19,000 children, have grants that expire on October 1 and won’t receive new funding to continue operating until the shutdown is resolved. Other federal programs, including work-study aid for college students, will also be delayed.

If the shutdown wears on, though, it could start to impact school districts, institutions of higher education, and postsecondary students more severely. Some staffers for the Departments of Education and Health and Human Services will return to the agencies to ensure operations function as normally as possible. But with no funding appropriated yet for fiscal year 2014, school districts and students are sure to pay the cost.

The dispute that led to the first federal shutdown in 17 years centered around the implementation of the Affordable Care Act, the healthcare law passed in 2010 for which some provisions also went into effect on October 1. Some Republican members of the U.S. House of Representatives insisted on defunding and/or delaying for one year the law’s implementation, while Democrats in Congress, as well as President Obama, demanded a clean funding bill with no alterations to the healthcare law.

The debate over the Affordable Care Act is masking another divide in Congress that needs to be resolved before an annual appropriations bill is finalized, though: how and whether to fund domestic programs within a shrunken budget.

The 2011 Budget Control Act sets an overall limit on funding for domestic programs, and to avoid finding the required spending cuts in fiscal year 2013, Congress and the president enacted a law in late 2012 to reduce the 2014 levels further. That means this year, lawmakers will have to find another $18 billion in cuts to fiscal year 2014 appropriations to avert mandatory and automatic across-the-board sequesters applied to most federal programs.

But Senate Democrats have said they won’t support a bill within those limits, and House Republicans now have cold feet having realized they’d have to cut a big chunk of domestic funding back to fiscal year 2002 levels. So neither the House nor Senate has voted to approve its own spending bill for the Departments of Labor, HHS, and Education. Assuming lawmakers don’t manage to find the cuts themselves, many federal programs, including most education ones, will be sequestered again. The continuing resolutions debated over the past week have appropriated well above the 2014 rate, at prior-year levels. That means lawmakers have likely set up federal programs for another round of blunt cuts down the line.

All in all, the shutdown leaves policymakers in D.C. and recipients of federal dollars around the country with a great deal of uncertainty. Congress could choose to end this shutdown quickly, before many serious side-effects occur. Or the shutdown could drag on, with neither side willing to cave. There could even be a short-term temporary funding bill—as short as one week, some lawmakers have argued—that would precipitate another round of the same debates almost immediately.

Finally, in just a few weeks, on October 17, the U.S. is projected to reach the nation’s debt ceiling. A bill to raise the debt ceiling could be seen as a prime legislative vehicle to pass a 2014 spending bill – but some members of Congress are considering yet another showdown when the debt ceiling debate rolls around.

Check back with Ed Money Watch over the coming weeks for more details, and for information on the 2013 and 2014 appropriations process, we’ve got the details in our April 2013 issue brief, Federal Education Budget Update: Fiscal Year 2013 Recap and Fiscal Year 2014 Early Analysis.

Head Start to Harvard: A New America Story

September 30, 2013
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As federal agencies prepare for a possible government shutdown at midnight tonight, it’s unclear if members of Congress have given much thought to the implications of pulling the plug on virtually all federal programs. In fact, over the past several years and in the midst of continual budget debates – over spending and deficits and debts and across-the-board cuts – this isn’t the first time lawmakers have lost sight of the people behind the programs they fund.

Last week, the New America Foundation’s Media Relations Associate, Jenny Lu Mallamo, brought the debate back down to earth with a reminiscence of her time in a Lincoln, Nebraska Head Start program more than 20 years ago. Her parents, Chinese immigrants who didn’t speak English as their primary language, relied on the in-school and at-home services that Head Start provided the family to help Jenny catch up to her preschool-aged peers. Jenny writes,

The Way We Talk: Choice

September 27, 2013
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This is the fourth in a series of posts reflecting on terminology pervading today’s polarizing debates about American education. In each post, we ask how various buzzwords—“professionalism,” “accountability,” “equity,” and the like—influence the conversations we have. What are the strengths, weaknesses, and blind spots that come with framing our arguments in each of these terms? The hope is that assessing the implications of the way we talk will prompt more productive discussions about improving PreK-12 education.

In the last “The Way We Talk” post, I argued that equity is the closest thing that American public education has to a sacred purpose. We expect our schools to be equal opportunity catalysts; once students complete their PreK–12 (or sometimes PreK–College) education, we generally act as though society has provided them an adequate platform for determining the course of their lives. Put another way, public schools are our community’s most tangible, most democratic commitment to sustaining the American Dream.

But democratic equity only covers part of the story. The United States is a liberaldemocracy. Its attitude towards education (and politics more generally) also stems from individualist liberals like Thomas Jefferson, Thomas Paine, and John Locke. If we care about equity for all, we also care about choice. We care about freedom.

Measuring What Matters in Quality Rating & Improvement Systems

September 26, 2013

For more than the past decade, states have worked to build quality rating and improvement systems (QRISs) to help rate and improve child care centers and preschool programs. The quality ratings, often displayed as symbols (such as stars), inform families about the quality of prospective child care centers. The ratings also help leaders identify programs that are not meeting quality standards set by the state.

But is a highly-rated pre-K program more effectively preparing children for kindergarten in comparison to preschool programs with lower ratings? Not necessarily, according to a new study published in Science Magazine.

Research Suggests Redshirting May Be Harmful

September 26, 2013

More and more parents are electing to keep their children out of school until they’re 6 years old. The practice, known as “redshirting,” is the academic equivalent of the allegedly middle-school aged behemoth with a mustache who plays for a Little League team. More than being a reaction to a child’s specific developmental needs, many parents see it as a way to give their kids an edge in school. But it could be far from a harmless practice. It turns out redshirted kids don’t do as well as on-time kindergarten entrants later in life.

How to Waste Millions of Dollars on Something Students Hate More than Sallie Mae

September 26, 2013

Sallie Mae might be the most unpopular entity in education (just look at social media if you think otherwise). As a recent post by Rohit Chopra at the Consumer Financial Protection Bureau notes, the Delaware-based loan giant had the worst overall performance record among the four companies that won competitive contracts to service new federal student loans. In response, Sallie Mae’s contract to service federal loans says the company will get fewer loans to work with next year (meaning they get paid less) and other servicers get more.

Meanwhile, the U.S. Department of Education is required to give a completely different group of servicers a free pass, even if their results may be substantially worse than the four competitively chosen companies. And it pays them more per borrower than Sallie Mae, too. But this is no accident. It’s an intentionally wasteful policy vigorously sought after by several members of Congress.

 

Not-for-profit but politically connected

These companies are known as nonprofit loan servicers. Many of them used to be loan companies back when students could borrow through either the bank-based federal loan program or the government run Direct Loan Program. But after Congress ended the bank-based option in 2010, saving taxpayers $68 billion in the process, all new loans were supposed to be made by the government and serviced by companies that won a competitive contracting process.

Enter Congress. Several members demanded that a role be maintained for their local loan companies, which were nonprofit and often quasi-state agencies. As a concession, legislators agreed to guarantee these nonprofit loan companies would each receive a minimum of 100,000 borrower accounts to service instead of the four competitive winners. It was a straight politics play to keep directing federal subsidies to home companies based upon political connections and cloaked in claims of local expertise. There were no demands for results or accountability. It was a kickback calculated in students to provide the same services already contracted for elsewhere.

 

Paying more, often for the same product

In addition to getting a guaranteed allocation regardless of results, these agencies also received a special allocation in the bill that gave them this earmark—about $1.2 billion more over 10 years to service a fraction of the loan volume that the bigger companies are overseeing. As the table below shows, this includes paying the nonprofit servicers about 22 percent more than the large ones for borrowers that are in their grace period of current repayment status. For the 100,000 accounts, that’s as much as an extra half a million dollars a year for servicing borrowers who are just doing what they should be.

Not only are taxpayers paying more for these nonprofit servicers, but in many cases those dollars are buying the same platform as the cheaper companies that won competitive contracts. Looking at the publicly posted contracts of 11 nonprofit servicers shows that in nearly half the cases the government is simply paying more money for a product they are already getting from the competitively determined contractors. Five of the 11 servicers indicated an initial plan to subcontract with Nelnet or the Pennsylvania Higher Education Assistance Authority (PHEAA) to use their platforms, but getting paid at a price that is between 10 and 32 percent higher than what those two companies are receiving per borrower.

Since those initial plans, consolidation among nonprofit servicers means that over 70 percent (five of the remaining seven) are getting more money to use other companies’ platforms. The Department announced in July that the platform run by Campus Partners and EdManage, which are owned by the South Carolina Student Loan company would be shutting down. In addition to EdManage, three other providers—COSTEP in Texas, EDGEucation in North Carolina, and KSA in Kentucky—had planned to use this platform. As a result, the loans of the Texas, North Carolina, and South Carolina servicers are being transferred to MOHELA and the loans serviced by KSA are being moved to Aspire. But these companies are already using PHEAA’s servicing platform, just increasing the extent to which nonprofit servicers are relying on a product the government is already getting for less. That does not sound like the local expertise many of these companies cited in trying to justified their continued existence to Congress during negotiations on the 2010 bill.

 

What about results?

Judging how well these servicers are actually doing is not an easy task. The 100,000 accounts each got were randomly assigned, but they all came from the company that used to service all of the government-held student loans back when there were two competing federal loan programs. Because of this competition, the loans held by this company had some characteristics that could make it different from the broader loan population. First, it was from schools that had been in the government-based system for longer, which means the quality of loans would be affected by the types of schools the bank-based program was able to recruit to participate versus those with riskier loans it may not have wanted to serve as much. Second, these were likely not new borrowers, so they may have already been in repayment or even defaulted. Third, the sample could include some of the bank-based loans that were sold to the government during the credit crunch, which are generally among the worst debts in the program. Comparing the nonprofit servicers to the competitively determined ones is also not easy because only two of the five different metrics each is measured upon are in common—measures of borrower and federal personnel customer satisfaction. None of the information on actual outcomes is consistent across the two groups.

 

Students don’t seem happy...

Comparing nonprofit and competitive servicers on the metrics they do have in common suggests that the extra money spent on the former is buying little more than unhappier students. This is measured by a survey of borrowers done under the framework of the American Customer Satisfaction Index, which can be uniformly applied across a range of sectors and types of industries. The table below shows the average scores on the borrower satisfaction measure over the last two quarters of the 2012-2013 year for all servicers that had received marks for at least three quarters. Presenting the data in this way ensures servicers are not judged based upon only their first score, which tends to be a bit lower, and have the results partially smoothed out. For reference, the national average is about 76 and a “good” score would be in the 80s.

As the table shows, the competitively determined contractors scored as high as or higher than every single one of the seven nonprofit servicers with data. The five additional servicers that lacked enough data would also have come up well short, with most having scores in the mid to high 60s. And the two most liked serivcers—Great Lakes and Nelnet—scored approximately 10 points higher than the worst nonprofit, an offshoot of the South Carolina Student Loan Corporation. Even Sallie Mae, the bane of students everywhere (or at least on Twitter) bested every nonprofit with data for this period.

 

...Federal personnel think things are only OK

Below is the same table, but for the federal personnel scores. The results are a bit more tightly clustered, with Utah-based CornerStone even exceeding three of the competitive winners. But the bottom group, especially the Oklahoma result, is not pretty.

Now it is possible that maybe some of the scores are affected by the quality of a given servicer’s sample—defaulted borrowers may look more negatively upon their servicer than someone in active repayment. But regardless of the scores, the saddest thing across the two tables is that no one appears to be providing above average customer service.

 

Outcomes vary, but unclear why

Since there’s no way of knowing whether the borrower populations across each servicer are equivalent, it’s hard to tell whether variations are the result of differences in quality or the underlying borrowers. It could be that only 72 percent of loans in repayment or delinquent status overseen by the Kentucky Higher Education Student Loan Corporation’s servicing arm were current or in grace status at the end of the fourth quarter of 2012-13 because it received a disproportionate number of defaulted loans, while Aspire’s 93 percent mark on the same metric could be a result of having more borrowers at flagship public four-year schools. There simply aren’t enough data to know for sure. Because of those caveats, the table below simply shows the results on the three outcome metrics for all servicers in the fourth quarter of 2012-13 for all entities that had servicing results for at least two quarters.

Sequestration Silver Lining

The number of nonprofit servicers in the program—and thus the size of the giveaway—would likely be even larger were it not for sequestration. Funding limitations stemming from that process have prevented the Department from giving any additional volume to nonprofit servicers (see slide 10 for more). But it’s unclear if more companies will come on board if funding conditions improve.

 

What are we paying for?

The continuation of nonprofit servicers in the student loan program was a much debated concession made in the heat of negotiations over not just ending the bank-based system but reforming health care as well. It was politically expedient and of dubious policy merits. But with three years of hindsight we now have a clearer picture of just what this set of exemptions bought taxpayers and students. For a 10-year investment of more than $1 billion we are getting servicing that is less liked by students than even Sallie Mae, on platforms that in most cases were already available for less money. The data are less clear on how these entities actually perform in terms of loan results, but given the first two conditions, they would certainly have to be substantially better than what the bigger servicers are doing to even remotely justify this continued giveaway.

New Grants Focus on Inter-State Collaboration for Kindergarten Entry Assessments

September 24, 2013
Earlier this month, the US Department of Education awarded $15.1 million in Enhanced Assessment Grants (EAGs) to the three state education agencies that applied for funding to develop or enhance their Kindergarten Entry Assessments.
 
As senior policy analyst Laura Bornfreund wrote last year, two of the state education agencies awarded grants—Maryland and North Carolina—were also amongst the winners of the Race to the Top—Early Learning Challenge (RTT-ELC). The third winner, Texas, did not participate in RTT-ELC; their EAG application came as a surprise to many. 

New School District-Level Pre-K Data Reflect Drop in State Spending

September 24, 2013
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This post also appeared on our sister blog, Ed Money Watch.

In February’s State of the Union address, President Obama outlined a new proposal to expand state pre-K programs to all low- and moderate-income children across the country. The federal funds would require state matching funds, and the state and federal dollars would both be allocated to school districts to expand access to pre-K for eligible children.

In many states, though, it’s impossible even to know the answers to basic questions about pre-K. Because pre-K is often not tracked, or not tracked at the school district level, most principals can’t say how many of their incoming kindergartners attended pre-K, and many policymakers don’t know how many children in their state have access to early education.

New data released in a joint effort by the Federal Education Budget Project (FEBP) and the Early Education Initiative, both of the New America Foundation, begin to answer some of these questions. Released for the first time last fall, FEBP and Early Education Initiative staff collect and analyze state- and school district-level pre-K funding and enrollment data where available. The latest update includes information from the 2012 school year, as well as data for earlier years that states had not previously made available. Check out your state or school district in our Funding Per Child widget below:

New School District-Level Pre-K Data Reflect Drop in State Spending

September 24, 2013
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This post also appeared on our sister blog, Early Ed Watch.

In February’s State of the Union address, President Obama outlined a new proposal to expand state pre-K programs to all low- and moderate-income children across the country. The federal funds would require state matching funds, and the state and federal dollars would both be allocated to school districts to expand access to pre-K for eligible children.

In many states, though, it’s impossible even to know the answers to basic questions about pre-K. Because pre-K is often not tracked, or not tracked at the school district level, most principals can’t say how many of their incoming kindergartners attended pre-K, and many policymakers don’t know how many children in their state have access to early education.

New data released in a joint effort by the Federal Education Budget Project (FEBP) and the Early Education Initiative, both of the New America Foundation, begin to answer some of these questions. Released for the first time last fall, FEBP and Early Education Initiative staff collect and analyze state- and school district-level pre-K funding and enrollment data where available. The latest update includes information from the 2012 school year, as well as data for earlier years that states had not previously made available. Check out your state or school district in our Funding Per Child widget below:

The data offer an on-the-ground look at national early education funding trends. The National Institute for Early Education Research (NIEER), from which FEBP compiles its state-level pre-K data, found that 2012 was the first year in a decade in which state pre-K funding fell over the prior year. We looked more deeply into those figures and found that the cuts were far from across the board.

In Texas, for example, state pre-K funding fell from $844 million in 2011 to $727 million last year. But while funding decreased substantially in some districts, it actually increased in others. Houston pre-K funding fell from more than $61 million to nearly $53 million  over the same one-year span, leading to nearly 400 fewer children in enrolled in pre-K. Meanwhile Denton School District saw increased spending of more than $700,000 and 100 more children enrolled. Even San Antonio, the city whose mayor launched the Pre-K 4 SA initiative to raise the sales tax and fund pre-K, lost $1.2 million in state funding and more than 200 state pre-K slots (though keep in mind that our figures include only state dollars, so pre-K slots funded by the sales tax increase are not reflected in these data).

FEBP is the only source of this critical information across the country and at the school district level. The FEBP website displays the information over the past five years, where available. These landmark pre-K data were first released last fall, and this year’s update includes additional information for the 2012 school year, as well as updated information for states that had not previously provided data. New America maintains the most comprehensive education funding database in the country, with information on funding, demographics, and outcomes for every state, school district, and institution of higher education in the nation.

It is important to note that some states collect data in a way that is notably different from others; the specific caveats for these states may be found on our pre-kindergarten data background page. Some states do not offer state-funded pre-K programs or did not provide the data. Pre-K programs funded through community-based organizations unaffiliated with school districts are not included in the data. For the 2010-11 and 2011-12 school years, FEBP was able to collect state pre-K enrollment data for 26 states and funding data for 16 states. FEBP also shows data for Head Start programs run by 186 school districts around the country.

To view the pre-K data for your state or school district, visit febp.newamerica.net and use the PreK-12 search box. Researchers may also download national, state, and district raw data files on the FEBP website.

E-rate Modernization: Promoting Connectivity for 21st Century Learning Environments

September 23, 2013
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Last week, the New America Foundation’s Education Policy Program and Open Technology Institute jointly submitted recommendations to the Federal Communications Commission outlining ways to modernize the Commission’s E-rate program. Our recommendations underscore a more modern understanding of how connectivity is leveraged by schools, libraries and communities throughout the country to promote 21st century learning.
 
As OTI’s Danielle Kehl and Sarah Morris discuss in the Dispatches from the Digital Frontier blog:
 
Schools and libraries face enormous challenges in ensuring that they are adequately connected to broadband services that enable 21st century learning. Although the E-rate program, which helps schools and libraries obtain affordable telecommunications services, has had tremendous success in helping schools get connected, upgrading capacity has become increasingly difficult in recent years.
 
 
While capacity has been lagging in schools and libraries throughout the country, we increasingly need more of it to meet 21st century demands.
 
Schools and libraries are physical and symbolic anchors in their communities and, especially for areas with the highest need, are a central point for disseminating many needed resources. Public libraries, for example, offer some 3.75 million children's and educational programs to the public, according to the Institute for Museum and Library Services. We believe that schools and libraries should have the flexibility to maintain open Wi-Fi hotspots—not only during non-school and non-business hours, but even when school is in session and libraries are open (as long as it is not disruptive to students or library patrons).
 
 
Further, we provide several specific recommendations addressing the need for greater program parity. Some of the proposed funding changes put forward by other stakeholders—such as allocating E-rate dollars to schools on a per-pupil basis—could actually lead to greater inequity due to the highly variable cost of broadband service across the country. In thinking through alternative funding structures for the program, making sure the funding structure takes into account these variations is crucial.
 
We also caution against tying E-rate funding to specific educational outcomes. Broadband access is a necessary component for building 21st century learning environments, and we should understand how connectivity expands the tools and resources that schools and libraries can provide. It is highly problematic, however, to use student outcomes to determine the level of infrastructure investment a school or library should receive.
 
Additionally, we urge the Commission to look for ways to promote greater equity in E-rate’s treatment of support for our country’s youngest learners. Currently, the Commission recognizes state definitions of elementary and secondary schooling for funding decisions—unfortunately, in some cases this has led to unequal access to support. This is most clear in the case of pre-kindergarten; due to state definitions of elementary school, a pre-K classroom in Florida, for example, is eligible for E-rate funds while a pre-K classroom in Georgia is not.
 
To read more on our E-rate recommendations check out more coverage on OTI’s Dispatches from the Digital Frontier blog or view our full recommendations, available through the FCC’s electronic comment filing system.
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