Political fiddling while pensions burn

Posted on August 5, 2010 by axooms

Gretchen Morgenson, the current dean of financial reporting, covers the DPS pension debate as part of a series on private and public debt.  This particular political pigskin has been kicked enough to shame Jason Elam, but I’m glad it is getting more attention, because the critical issue — underfunded pensions — is not going away on an election cycle.

Why do I think the critical issue is underfunded pensions and not any specific financing? Well, follow the money.

First, here is the part of the article I think most parties will gloss over while trying to estimate their political pundit hang time:

While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

Let me paraphrase: right now it’s a wash, and there is some chance costs will decline.  The district has not lost money as a result of the transaction, and may still benefit. So the first number is currently pretty close to zero.

What’s the other number? Well, as of a year ago, PERA was underfunded by an estimated $27.5 billion (yes, that is a “b”).  I’ll try to find the 2010 estimate, but I have not yet seen it published.  But for fun, let’s round down to, oh, $25 billion.

Now, anyone care to argue that zero is a bigger problem than, say, $25 billion?

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Tenure: An idea whose time has gone?

Posted on July 26, 2010 by axooms

Megan McArdle’s recent piece in The Atlantic makes this claim.  My favorite part was her response to the argument that it is tenure that allows professors to produce important research:

How about valuable scholarship?  Well, define valuable–in many liberal arts fields, the only possible consumer of the research in question is a handful of scholars in the same field.  That sort of research is valuable in the same way that children’s craft projects are priceless–to their mothers.  Basically, these people are supporting an expensive hobby with a sideline business certifying the ability of certain twenty-year-olds to write in complete sentences.

Another point is equally compelling: tenure is supposed to encourage professors to take risks.  But because the process of applying for and receiving tenure is highly political and consumes one’s early career, it often has the opposite effect: scholars early in their professions, when they are most likely to produce groundbreaking work, are far more risk-averse; by the time tenure is granted, a professor is more definitively committed to a specific academic trajectory with far less chance of groundbreaking research.

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Low-income students and college

Posted on July 7, 2010 by axooms

An evil twin to Paul’s earlier post about the continuing economic benefits of a college education is the depressing news that fewer and fewer low-income students are both attending and graduating from college (see full article):

Fewer low- and moderate-income high school graduates are attending college in America, and fewer are graduating. Enrollment in four-year colleges was 40 percent in 2004 for low-income students, down from 54 percent in 1992, and 53 percent in 2004 for moderate-income students, down from 59 percent over the same period, according to  a report recently submitted to Congress by the Advisory Committee on Student Financial Assistance. […]

Persistence through four-year colleges dropped to 75 percent in students entering in 2003 for low-income students, down from 78 percent in students entering in 1995, while persistence for students from moderate-income families remained at 81 percent. Persistence rates for low- and moderate-income students in two-year colleges, however, fell 10 percentage points to 49 percet over the same period.

A significant part of this is economics.  As the article notes, the net price for a low-income student attending a four-year college is 48 percent of family income, compared to 26 percent for a moderate-income student. Combine this with the tendency of students to pile on more and more debt, and the opportunity of college can quickly become financial quicksand.

Public K-12 education is increasingly focused on students attending college. As the study that Paul cited shows, that can be a catalytic factor in improving incomes.  But as the focus on college as a partial solution to basic issues like income inequality increases, it is equally important that the students are college-ready, and that college is affordable. We do no one a favor by praising the benefits of a college education for which a student is unprepared and unable to finish, and then sticking them with the bill.

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Student debt data chilling

Posted on June 3, 2010 by axooms

A chilling article in the NYT on both the ease and amount of debt for many students who choose higher education:

Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college […] So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up. […]

How many people are like her? According to the College Board’s Trends in Student Aid study, 10 percent of people who graduated in 2007-8 with student loans had borrowed $40,000 or more. The median debt for bachelor’s degree recipients who borrowed while attending private, nonprofit colleges was $22,380.

The Project on Student Debt, a research and advocacy organization in Oakland, Calif., used federal data to estimate that 206,000 people graduated from college (including many from for-profit universities) with more than $40,000 in student loan debt in that same period. That’s a ninefold increase over the number of people in 1996, using 2008 dollars.

As the article points out, there and numerous similarities with the recent mortgage crises, but more important are the differences.  One cannot walk away from student debt and toss the front-door keys to the lender.  And while many people chose to live in houses that they could not afford, we have in large part based the very premise of social advancement and wealth on education — which remains highly correlated with income.

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Charter authorizer challenge

Posted on May 3, 2010 by axooms

The NY Times had a lengthy piece over the weekend on charter schools.  Readers of these pages will find little new in the data disagreement (CREDO v Hoxby), or the trusim that the mere designation of “charter” is no guarantee of success, but there was one point of agreement that I found  compelling:

What most experts can agree on is that charter school quality varies widely, and that it is often associated with the rigor of authorities that grant charters. New York, where oversight is strong, is known for higher performing schools. Ohio, Arizona and Texas, where accountability is minimal, showed up in Ms. Raymond’s study with many poorly performing schools.

This, as well, is hardly new, but the idea that the charter authorizers (usually school districts) are themselves a major determinant of charter success has largely escaped the public debate.  Now I would add Denver to the historical list of top authorizers (although the critical ability to close poorly-performing charters is nascent), but even this ability is on a political tightrope.

Critical to the continued development of local school boards (as I wrote two years ago) is a shift from acting solely as a school operator to also managing an array of independent organizations that run schools and provide services.

This is not a simple transition — school boards rarely think of themselves an managers of independent organizations, and often they have no framework for recognizing what sort of skills and tactics are required.  However it is made far harder as many elected officials (particularly those with higher political aspirations) depend heavily on the political support and contributions of groups for whom charter schools are a threat to both membership and job security.

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Two views (and students…)

Posted on April 26, 2010 by axooms

The Post yesterday ran two teacher perspectives on SB 10-191 (see: pro, con).  Both should be read, if only for the contrast.  What I find really illuminating about them is how they talk about students.

One starts with a teacher engaging his students – asking their opinion. The author asks how it is that he can “demand the absolute best” from these students – it’s clear that he believes this is core to his work.

The other starts with a discussion of teacher tenure, and mentions students only in passing.  Students “blow off school” or “suffer from myriad social ills.”

Perhaps they are both outstanding teachers, but it’s clear that they think about SB 10-191, and its impact on students, in very different ways.

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A parallax view on SB 191

Posted on April 23, 2010 by axooms

With Mike Johnston’s teacher evaluation bill headed towards a vote later today, the heightened rhetoric has now eclipsed the likely impact.  For while I wholeheartedly support this bill, I also think the fevered opinion has given it a prominence that overshadows its relative ability to produce significant change.

With the rising antagonism between supporters and opponents, both sides went for the jugular: CEA publicly attacking Commissioner Dwight Jones and flexing its substantial lobbying muscle, while supporters enlisted the cumulative wisdom of the past 36 years of Colorado governors as well as district superintendents from Mapleton, Harrison, Denver and Aurora. In order to pass/block the bill, both sides must argue to its greatest possible impact. The end result is to inflate SB 191 to an elevated importance that no single proposal could possibly merit.

For if the bill passes (without too much change), it is both unlikely to be either a panacea leading to better educational outcomes for students, or the sudden arrival of nuclear winter for teachers. In truth, SB 10-191 is only one part of the institutional changes we need concerning teachers in public education, and in my view is probably of lesser importance than some related areas.  If this is the only evolutionary step we make for education reform, we are unlikely to crawl out of our current muck and rise to our feet.

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