A Nation Still at Risk: The Case for Federalism and School Choice

In 1983, the National Commission on Excellence in Education issued the landmark A Nation at Risk report highlighting the crisis in American education. [1] The commission reported that American students were at risk of falling behind students from around the world and that this imperiled our national security and future prosperity. "If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today," the com­missioners wrote, "we might well have viewed it as an act of war."[2]

Twenty-five years later, the American education system remains in a state of crisis. Each year, the United States spends more than $550 billion on K-12 public schools-more than 4 percent of the nation's gross domestic product.[3] A student attending public school in 2008 can expect taxpayers to spend an average of $9,266 on his or her behalf-a real increase of 69 percent over the average per-pupil expenditure in 1980.[4]

Regrettably, millions of American students con­tinue to pass through the nation's public schools with­out receiving a quality education. On the 2007 National Assessment of Educational Progress (NAEP) test, 33 percent of fourth-grade students scored "below basic" in reading.[5] Among economically disad­vantaged children, 50 percent scored "below basic."[6] In many of the nation's largest cities, high school grad­uation rates are below 50 percent.[7]

Widespread failure in America's public schools imposes great personal and societal costs. Many Amer­icans' lives are affected by their lack of a quality edu­cation. Moreover, taxpayers must shoulder the burden of costs caused by the uneducated population. This widespread failure may imperil our nation's pros­perity and security.

Federal and state policymakers must recognize this persistent crisis and implement policies that will lead to systemic education reform. At the federal level, Congress should reform federal education policies to protect academic transpar­ency, eliminate bureaucracy and inefficiency, and encourage innovation at the state and local levels. Policymakers should embrace policies that give all families the freedom to choose their children's schools, free school leaders to innovate and develop successful school models and improve teacher quality, and allow parents and the public to hold public schools and students accountable for results.

The State of Public Education in America

This year, American taxpayers will spend more than $9,200 on the average public school student entering the first grade.[8] This means that if the student remains in school through 12th grade, he can expect to have roughly $100,000 invested in his education by taxpayers. This considerable in­vestment, however, often does not purchase a qual­ity education.

Academic Achievement. The National Assess­ment of Educational Progress is the best nationally representative sample of American students' aca­demic achievement, but the NAEP exam consis­tently shows that a significant percentage of American students fail to meet a basic standard of learning. In 2007:

• 33 percent of fourth graders and 26 percent of eighth graders scored "below basic" in reading,[9]
• 18 percent of fourth graders and 29 percent of eighth graders scored "below basic" in mathematics,[10]
• Students from lower socioeconomic backgrounds scored lower than their peers, and
• Among students who were eligible for the free and reduced-price school lunch program, 50 percent of fourth graders and 42 percent of eighth graders scored "below basic" in reading.[11]

High School Graduation Rates.National esti­mates of high school graduation rates also highlight the crisis in America's elementary and secondary schools. According to government and independent reports, the estimated average high school gradua­tion rate is between 71 percent and 74 percent.[12] Among ethnic-minority children, the graduation rate is significantly lower. In 2002, only 56 percent of black and 52 percent of Hispanic students grad­uated, compared to 78 percent of white students.[13]

There is reason to believe that the graduation rates are considerably lower in some of the nation's largest cities. A 2008 study published by the Education Research Center found that the high school graduation rate was below 50 percent in 17 of the nation's 50 largest cities.[14] The cities with the lowest graduation rates were Baltimore (35 percent), Cleveland (34 percent), Indianapolis (31 percent), and Detroit (25 percent).[15]

Adult Literacy. Another indicator of the poor performance in the nation's education system is the high rate of adult illiteracy. The U.S. Department of Education's 2003 National Assessment of Adult Literacy found that 14 percent of American adults scored "below basic" in literacy, meaning that they could not perform simple, everyday tasks that required reading or writ­ing.[16] The report projected that an estimated 30 mil­lion American adults possessed no more than the most rudimentary literacy skills.[17]

The Costs of Low Educational Attainment

The poor performance in America's schools also imposes greater costs, such as lower lifetime earn­ings and life expectancy for students, and societal costs such as higher social welfare payments imposed on our communities. Overall, the systemic failure of our public schools threatens our nation's future prosperity and security.

The Personal Costs. Failing to attain a quality education to prepare for adulthood imposes signifi­cant personal costs, ranging from reduced lifetime earnings to lower life expectancy. In 2002, the U.S. Census Bureau issued a report projecting the rela­tionship between lifetime earnings and educational attainment: A full-time worker with a college degree can expect to earn more than $2.1 million over the course of his or her lifetime, compared to a high school graduate, who can expect to earn only about half that amount for a lifetime of full-time work. (See Chart 1).

Another government study reported the link between educational attainment and life expect­ancy. A 2002 U.S. Department of Health and Human Services study reported that, "For the total population, and for males and females separately, mortality is inversely associated with educational attainment; that is, the average risk of death decreased markedly with increasing educational attainment."[18] An independent study found that high school dropouts live an average of nine years less than high school graduates.[19]

Lifetime earnings and life expectancy are only crude measures of life outcomes. The full benefit of knowledge and a quality education is impossible to quantify.

Societal Costs. Low educational attainment in American schools also affects society as a whole. Poorly educated adults are less likely to make a pos­itive contribution to society and are more likely to be dependent on government services. Professor Cecilia Rouse of Princeton University found that the lower wages of high school dropouts result in $158 billion in lost earnings and $36 billion in reduced federal and state income tax revenue.[20] Rouse also found that high school dropouts were more likely to be unemployed: Only half held regular jobs com­pared to 69 percent of high school graduates.[21]

Adults who drop out of high school also have higher health care bills: $35,000 per year compared to $15,000 for college graduates.[22] These health care costs impose a significant burden on taxpayers. Brian Gottlob, a senior fellow at the Friedman Foundation, analyzed the fiscal effects of high school dropouts on federal and state governments and reported that if every high school dropout had instead earned a college degree, the number of uninsured working adults would drop by almost 4 million.[23]

Likewise, the number of Medicaid beneficiaries would drop by 3.5 million, saving taxpayers $7 billion every year.[24] Low levels of education among adults also correlate with increased crimi­nal activity.

A Threat to Our Future Prosperity and National Security

The poor performance of American students may also endanger our future prosperity and even our national security. In the 20th century, the United States was able to claim a position of global strength in large part because of its economic strength. In World War II, America's military power was made possible by U.S. economic strength. The United States won the war in the Atlantic and Pacific in large part because of its technical might and ability to field a superior military. During the Cold War, the strength of the American economy was one of our greatest assets in opposing the expansionism of the Soviet Union.

The relationship between economic strength and national power will continue in the 21st century, but the United States is facing new challenges in the increasingly competitive global economy. Best­selling author Thomas Friedman makes this point in his book The World Is Flat, which focuses on the challenges presented by an era of increased global­ization and international competitiveness. In an ever-"flattening" world, many jobs can easily be out­sourced to skilled, lower-cost workers in other countries. This means that, both today and in the future, American workers will have to compete for jobs against workers from around the world.

Sadly, there is reason to believe that many Amer­icans may be unprepared for this challenge. Com­parisons between American students and adults on international tests highlight the need to improve the performance of our nation's schools.

In 2006, the National Center for Education Sta­tistics reviewed the performance of American adults and students on international tests.[25] The review found that American students were not excelling compared to international students and that, in some subjects, they were performing below average compared to other developed nations. American students scored below average on math and science tests administered to students in developed coun­tries. In math, American 15-year-olds ranked 21st of 29 countries. In science, they ranked 16th. On reading exams, American students fared some­what better-they were average. But is average good enough?

If the nation's public schools continue to under­perform, a growing number of American workers will enter the workforce unprepared to hold their own in the increasingly competitive global econ­omy-threatening not only their, but the country's, future prosperity as well as national security.

Differing Visions for Reform: Parental Choice vs. Government Command

A Nation at Risk was a catalyst for numerous edu­cation reform efforts. Since 1983, many observers have sought to solve the problems in America's schools by increasing federal funding for-and intervention in-the educational system.

But President Ronald Reagan had a different vision. When the report was released, he argued that the way to solve the crisis in American educa­tion was to increase parental choice and strengthen state and local control:

I believe that parents, not government, have the primary responsibility for the education of their children. Parental authority is not a right conveyed by the state; rather, parents delegate to their elected school board repre­sentatives and State legislators the responsi­bility for their children's schooling….

So, we'll continue to work in the months ahead for passage of tuition tax credits, vouchers, educational savings accounts, voluntary school prayer, and abolishing the Department of Education. Our agenda is to restore quality to education by increasing competition and by strengthening parental choice and local control. I'd like to ask all of you, as well as every citizen who considers this report's recommendations, to work together to restore excellence in America's schools.[26]

Regrettably, this agenda was not achieved dur­ing President Reagan's tenure, and subsequent attempts to curtail federal power and promote parental choice in education have achieved only limited success. For the most part, the decades that followed his presidency instead have witnessed the gradual increase in federal authority over the nation's schools-and the continuing decline of American education.

Lessons from 25 Years of Education Reforms

To address the persistent crisis in America's schools, parents, taxpayers, and policymakers should review the recent decades of reforms. The following are four important lessons that can be drawn from a quarter-century of school reform.

LESSON 1: Simply increasing government funding for public education is insufficient.

Simply increasing government spending on public education is not the solution to the prob­lems in the nation's public schools. Since 1970, average per-student spending in American public schools has increased by 128 percent-from $4,060 in 1970 to $9,266 in 2005 (after adjusting for inflation). Chart 2 presents the growth in real per-student spending since 1970.[27]

Regrettably, American students' performance on long-term measures of academic achievement has not risen correspondingly. Chart 2 also presents the test scores of American students (ages 9, 13, and 17) on the National Assessment of Educational Progress reading exam.[28] American 17-year-olds attained the same average score of 285 in 2004 as in 1971. The average scores of 13- and 9-year-old students were modestly higher (4 points and 9 points, respec­tively) in 2004 than in 1971.

These modest gains appear trivial when com­pared to the dramatic increase in per-student fund­ing that occurred over the same period. As Dr. Jay Greene writes in Education Myths, "It is clear from the evidence of our national experience that simply adding more money to the public school system produces no significant improvements…. This evi­dence is strongly confirmed by the existing body of academic research."[29]

LESSON 2: Federal intervention needs to be limited.

When President Lyndon Johnson signed the Ele­mentary and Secondary Education Act into law in 1965, he declared that "all of those of both parties of Congress who supported the enactment of this leg­islation will be remembered in history as men and women who began a new day of greatness in Amer­ican Society."[30] But after more than four decades, widespread greatness in America's public schools continues to prove elusive.

The most recent federal intervention in K-12 education-the No Child Left Behind (NCLB) Act of 2001-has demonstrated the limits and potential dangers of federal intervention. This 1,100-page law established new regulations and requirements for states to receive federal funding for education. Most important, the law requires the states to test students annually from grades three to eight and once in high school and to report student perfor­mance (including disaggregated scores for student subgroups) and progress toward proficiency, known as adequate yearly progress (AYP).[31] Schools that fail to meet AYP goals are subject to remedies, including school choice, after-school tutoring, and school restructuring.[32]

These new requirements came with increases in both federal funding and regulation. The Bush Administration, for instance, requested $24.5 bil­lion for NCLB programs for fiscal year 2009-an increase of 41 percent over 2001 levels.[33] But the new funding has come with added costs for states and localities, including significant increases in the amount of resources that must be devoted to com­plying with the federal requirements.[34]

After six years, NCLB has demonstrated the lim­its and potential dangers of expanding federal authority in education. A central purpose of NCLB was to require states to adopt high academic stan­dards and provide other options-the possibility to attend another school-to children enrolled in per­sistently low-performing schools, but there is rea­son to believe that NCLB is failing to meet either of these objectives.

First, a number of researchers have highlighted how NCLB's requirement that states demonstrate students' proficiency on state examinations has cre­ated an incentive for states to weaken standards to make tests easier to pass.[35] A 2006 study by Univer­sity of California researchers found that the gap between state and NAEP proficiency scores had widened in 10 of 12 states examined since NCLB was enacted.[36]

Second, few children are benefiting from NCLB's limited school choice options. The Department of Education reported that only 1 percent of eligible students took advantage of the federally mandated public-school-transfer option between 2004 and 2005.[37] Only 17 percent took advantage of the "supplemental services" (tutoring) option.[38] A Department of Education survey of parents in eight urban school districts found that 27 percent of those who were eligible had been notified about the school-transfer options.[39] This suggests that many public school districts are failing to comply with the federal policy.

The Title I program-a centerpiece of federal K-12 education policy since 1965-demonstrates the limits and problems associated with federal inter­vention. Currently funded at $14 billion for 2008, the purpose of Title I has been to provide greater opportunities and resources for disadvantaged chil­dren. But Title I has grown increasingly complex and bureaucratic over time. A 2007 evaluation found that the current Title I funding formula was overly complex and bureaucratic:

Rather than delivering effectively on good intentions for helping poor children, con­gressional action over eight reauthorizations has led to a convoluted, bureaucratic sys­tem that is less student-centered, less trans­parent, and therefore less accountable to the public.[40]

LESSON 3: Realize the promise of expanding parental choice.

Over the past 25 years, progress has been made by expanding school choice and by making public schools accountable to parents and the public. In the 1980s, there was little school choice in America. Today, a growing number of American families are benefiting from the freedom to choose among sev­eral schools.

As of this writing, 13 states and Washington, D.C., support private school choice. This year, as many as 150,000 children will use publicly fundedscholarships to attend private school.[41] Millions more will benefit from opportunities to choose schools within the public education system thanks to public school choice and the proliferation of charter schools (independently run public schools).

Research evidence with respect to existing pro­grams suggests that school choice is having a posi­tive impact.[42] Surveys of families participating in school choice programs have found that parents are more satisfied with their children's education when they can choose their schools. Researchers studying the effect of private school choice on academic achievement have reported positive effects, both for participating students and for public schools faced with competition from other schools.

Moreover, expanding choice within the public school setting is yielding positive results. The grow­ing charter school movement, for example, has led to the creation of innovative schools like the KIPP (Knowledge Is Power Program) Academy schools, which have demonstrated superior results teaching often disadvantaged student populations.[43] A 2004 study by Harvard University economist Caroline Hoxby found that students in charter schools were more likely to be proficient in reading and math than were students in the nearest comparable public school.[44] Widespread public-school choice also has been reported to have positive effects.[45]

LESSON 4: State-level reforms can lead to improvement.

Improving academic achievement across the nation has proven difficult, but there is good reason to believe that comprehensive state-level education reforms can lead to dramatic improvement in the classroom.

Florida represents a promising model of a state that has implemented aggressive education reforms that have led to improvements in academic achieve­ment.[46] Over the past decade, Florida policymakers have established a rigorous accountability system and innovative testing model; have increased the focus on reading, reducing social promotion, pro­viding new pathways for hiring, and rewarding quality teachers; and have expanded public and pri­vate school choice.

After ten years, Florida's assertive approach to education reform seems to be working. The state's public-school students have demonstrated signifi­cant improvement on NAEP reading and math exams compared to students nationally. Black and Hispanic students have been improving at a faster rate than their white peers-evidence that the state is succeeding in reducing the ethnic achievement gap. The Sunshine State's experience demonstrates that systemic education reform is possible.

What Federal Policymakers Should Do

Although the word "education" is not mentioned in the Constitution, the federal government has played a growing role in the funding and regulation of elementary and secondary education since the 1960s. This interventionist policy has hindered rather than advanced the progress of educational improvement in America. The following principles should form the basis for full reform in American education.

• Resist increasing federal authority. Decades of increased federal intervention have failed to deliver significantly improved student perfor­mance in long-term measures of academic achievement. No Child Left Behind has once again demonstrated the limited and potential unintended consequences of increased federal authority.
  
  The federal government provides 9.2 percent of the funding for public education.[47] Members of Congress should recognize the limits of federal authority in education and resist increasing fed­eral power even more.
• Streamline federal programs and bureaucracy. The federal government currently spends more than $71 billion on elementary and secondary education through more than a hundred pro­grams run by more than a dozen agencies.[48] In 2008, the Bush Administration proposed the ter­mination of 47 Department of Education pro­grams (funded at $3.3 billion in 2008), which had achieved their purpose, are duplicated by other programs, are focused too narrowly, or are unable to demonstrate effectiveness.[49]
  
  Each year, Congress also appropriates hundreds of millions of dollars for education earmarks tar­geted for specific purposes chosen by Members of Congress.[50] Federal education reform should consolidate or eliminate federal programs, cut down severely on bureaucracy, and provide funding directly to state and local govern­ments-and let them determine how to allocate resources to best assist students.
• Reform NCLB to protect transparency and restore state authority. Congress should reform No Child Left Behind to liberate states from excessive federal regulations and bureaucracy and give state and local authorities the opportu­nity to implement reforms designed to meet local students' needs most effectively. This approach was proposed by Senators Jim DeMint (R-SC) and John Cornyn (R-TX) in their Academic Partnerships Lead Us to Success (A-PLUS) Act.[51]
  
  This policy would restore federalism and greater state and local control in education, moving decisions affecting students and schools closer to parents and taxpayers and encouraging state-led innovation. A participating state would be allowed to receive its share of funding for NCLB programs free of federal requirements and regu­lations if the state meets basic requirements that include (1) maintaining academic standards and continued annual testing, (2) reporting test per­formance of specific groups of students by dis­aggregating data and reporting information to parents and the public, and (3) continuing to use federal funding to assist disadvantaged stu­dents. The Secretary of Education would have the power to review and terminate the perfor­mance agreement if these terms are not met. This approach would protect state-level aca­demic transparency by removing incentives for states to reduce standards to make tests easier to pass.
• Expand school choice in Washington, D.C. Since the federal government has oversight over the District of Columbia's school system, Con­gress should work with local policymakers to reform the District's education policies to allow parents greater autonomy to choose their child's school and encourage schools to create quality learning environments to attract students. Specif­ically, Congress should expand the D.C. Oppor­tunity Scholarship program both to allow more children to participate and to create new school choice options for families in the nation's capital.

What State and Local Policymakers Should Do

State and local policymakers should implement comprehensive education reforms. Specifically, they should implement policies to give all families the opportunity to send their children to safe and effective schools, hold schools and students accountable for results, and implement policies designed to promote school-level leadership and improve teacher quality.

• Expand educational freedom. State and local policymakers should implement policies that include school vouchers, tuition scholarships, and education tax credits. They should also expand parental choice within the public educa­tion system by enacting strong public-school choice, promote charter school options, and offer innovative alternatives such as distance learning. States should also create legal protec­tions for home schooling and expand education savings options for families, such as state-level tax deductions or credits for contributions to Coverdell Education Savings Accounts.
• Hold schools and students accountable for results. States should continue to hold public schools accountable for results by establishing aca­demic standards and testing students annually to ensure that children are learning. States should move forward with innovative testing systems that allow teachers and parents to determine more accurately whether individual children are making progress each year. In addition, state policymakers should eliminate social promotion once and for all and develop policies to provide remediation to children who are at risk of falling behind.
• Encourage effective school leadership and teacher quality. State and local policymakers should promote innovation and competition within the public school system by encouraging greater school leadership and should pursue strat­egies for improving teacher quality such as merit-pay systems and alternative-teaching certification.

Conclusion

Twenty-five years after the seminal report A Nation at Risk, American education remains in a state of crisis. Millions of students continue to pass through the public schools without mastering basic skills and knowledge. Policymakers and the public must recog­nize both this persistent failure and the attendant need for systemic reform in American education.

At the federal level, Congress should reform fed­eral education policies to protect academic trans­parency, eliminate inefficient bureaucracy, and encourage innovation at the state and local levels. Policymakers should embrace policies that give more families the freedom to choose their children's school; allow school leaders to innovate and develop successful school models and improve teacher quality; and allow parents, lawmakers, and the general public to hold public schools and stu­dents accountable for results.

Dan Lips is Education Analyst in the Domestic Policy Studies Department at The Heritage Foundation.