The Cost of American Education
September 15, 2006
More than 50 million children across America returned to school
over the past few weeks, and so now is a good time to consider how
much we spend on public education and whether we're getting good
value for that money. This big-picture view is disheartening.
How much does K-12 public education in America cost? One way to
answer that is to look at direct taxpayer expenditures on
education. In July, the National Center for Education Statistics
reported that the average per-student expenditure in public schools
was $8,310 in the 2003-04 school year. State's per-student
expenditures ranged from a high of $13,338 in New Jersey to a low
of $4,991 in Utah.
Altogether, spending on all elementary and secondary education
topped more than $500 billion in 2003-04, or about 4.7 percent of
the entire economy as measured by GDP. The U.S. spends more on K-12
education than the Philippines, Saudi Arabia, or Sweden spends on
Based on the most recent per-pupil expenditure figures, the
average student enrolled in public school for the next 12 years can
expect to have about $100,000 spent on his or her education.
And what we are getting for all that money? Despite this
considerable investment, many students will not receive a quality
education. More than a quarter of all eighth grade students scored
"below basic" in reading on the 2005 NAEP exam, which by the
government's definition means that they are not able to
"demonstrate a literal understanding of what they read" and "make
some interpretations." One in five eighth graders scored "below
basic" in math.
Poor test scores are just one bit of evidence of widespread
underperformance. According to the Department of Education, the
national high school graduation rate is 73 percent, and some
researchers argue that even this estimate is too generous. Whatever
the exact number, it is disturbing that so many American students
fail to earn a high school degree.
Failure to graduate comes at a substantial cost. According to the
U.S. Census Bureau, the average full-time worker who did not
graduate from high school earns $23,400 annually, versus $30,000
for a high school graduate. That's a 29 percent pay cut. And an
average full-time worker with a Bachelor's degree earns $52,200 per
year-or more than twice as much as the average high school
The Census Bureau projects that a high school dropout who works
full time will earn $1 million over his or her lifetime, while a
high school graduate will earn $1.2 million. A college graduate can
expect to earn $2.1 million. Clearly, education pays, and stopping
short can be expensive.
Another growing cost of our failing public education system is
remediation, which is the burden that other institutions like
colleges and businesses shoulder to help people develop the basic
skills they should have learned in primary or secondary school. The
Department of Education reported that 100 percent of all community
colleges and 81 percent of four-year colleges offer remediation.
The Mackinac Center for Public Policy estimates that remediation
costs colleges and business in just the state of Michigan
approximately $600 million per year. If the other 49 states and the
District of Columbia are anything like Michigan, the country spends
tens of billions of dollars each year making up for public schools'
And then there are the opportunity costs of public education. An
opportunity cost, as economists define it, is the benefit forgone
by choosing a particular course of action, as opposed to an
alternative. How much stronger would the American economy be if the
billions spent on public education actually bought our 50 million
schoolchildren a high-quality education?
And what about the toll the current education system levies on the
lives of the children it disserves? No dollar figure can make up
for a lifetime without even a basic education.
Politicians and lawmakers tend to get mired in the details of
legislation and so rarely step back and look at the big picture. We
won't see widespread improvements in American education until we as
taxpayers begin to recognize the costs of the current American
education system and demand something better.
Dan Lips is an Education
Analyst at the Heritage Foundation www.Heritage.org.