Creative Destruction

March 20, 2006

Facilitating Access

Filed under: Education — Adam Gurri @ 8:55 pm

In January of 1956, the Virginia state legislature passed a resolution that would create a new branch of the University of Virginia up in the City of Fairfax. According to one Professor Hawkes, this was in order to reach the WWII vets with GI Bill tuition money up in Northern Virginia. This campus would eventually become George Mason University, where that very same Professor Hawkes would make the case to a class of his students that the money spent on veterans under the GI Bill was paid back in full by the increased revenue from the better jobs they all went out and ended up getting.

I believe that education is one of those few areas that’s worth sinking substantial tax-dollars into. I don’t think that this is a very controversial assertion. People who make the statement tend to do so in order to use it as a blunt instrument with which to beat whomever they are criticizing. That’s not my intention.

What I want to discussion isn’t so much whether it’s worth it to shell out government money for education, but rather, how that money should be spent.

The American debate has come to focus on vouchers, and the ethics of spending government money to send a child to a private school.

I am going to be honest here: I do not see the appeal of any of the arguments against vouchers. Not to say that persuasive arguments of that nature don’t exist, just that they haven’t really been brought to my attention.

This article argues that vouches send the message that “we are giving up on public education”. This notion is absurd–first of all, there is a touch of selfishness in the notion that children should be held hostage at bad schools because we are unwilling to work outside of the public school system to get them a good education. Long term improvements of public education are of course important, but we should always give people the choice of opting for private schooling.

This of course stems back to the Law of Pluralities. The situation is always fluid, and so the best system is the one that provides the most choices. Even if public school systems were solid gold across the board right now, you should never go into a program looking to give the one, true, best approach a monopoly. If public schools start going sour, you want to give people the immediate option of turning to private schools. Conversely, if a private school goes rotten, you want to have a lot of schools, private and public, for parents to fall back on.

What the author of the above article doesn’t seem to realize is that vouchers would improve public school conditions, not cause their decline. First off, it would lift the burden of overcrowding off of public school teachers, making it easier to give their students a full and in-depth education.

Secondly, when people start flocking away from certain schools, it will send red flags up to the people in charge that something is probably not right there.

In other words, using vouchers creates a situation whereby a public school has to have some standing in order to attract students.

I find arguments of cost to be kind of hilarious. It’s important to spend on education when you’re spending it on public schools, apparently, but spending to support parents who want to pursue a better education for their children elsewhere is a whole other matter.

Anyway, that’s neither here nor there. Arnold Kling has this piece on overhead costs of public schooling.

The county spends about $8000 per year on each student. Multiplying 30 student-years by $8000 gives $240,000, which represents the annual “sales per teacher” for the County.

Meanwhile, the cost per teacher, including salary and benefits, cannot be more than $80,000 a year. In other words, the County’s primary cost is $80,000, and they mark it up all the way to $240,000. What a business! A consulting firm would love to have those kind of profit margins.

For comparison, consider Sandy Spring Friends School, where our oldest daughter goes to high school. Tuition is $14,000 a year, which at first makes it appear more expensive. However, the number of students that a teacher sees in a day is much lower. I believe that 60 per day is a conservative estimate. Again, we take 1/6th of that to get “student-years,” because there are about six academic periods per day. This gives us 10 student-years per teacher at Sandy Spring. Multiplying by tuition, “sales per teacher” amounts to something like $140,000 per year.

Teachers are paid less at Sandy Spring, so that the cost per teacher might be just $60,000, including salary and benefits. Nonetheless, it is not as good a business as the public school. The public school charges a $160,000 markup over its direct cost ($240,000 – $80,000), while Sandy Spring only has a profit margin per teacher of only $80,000 ($140,000 – $60,000).

Of course, what I am calling “markup” or profit margin actually is overhead. My point is that public schools have a lot of overhead.

Bringing Public schools into a competitive environment would in fact save money in the long run, as a lot of that overhead would be eroded and lot more of the money spent would actually be invested more efficiently.

The ADL article argues that:

A $2,500 voucher supplement may make the difference for some families, giving them just enough to cover the tuition at a private school (with some schools charging over $10,000 per year, they would still have to pay several thousand dollars). But voucher programs offer nothing of value to families who cannot come up with the rest of the money to cover tuition costs.

The easy answer to this is: take the family’s income into consideration! If they are poorer, pay more of the tuition of the private school they want to go to!

Once again, the only difference in financing here is that right now, this sort of thing occurs behind the curtain. Higher-income families pay more taxes, which are then spent to maintain and improve the public schools that all income brackets take advantage of. So, no big change here.

I of course believe that vouchers should be reserved for people who maintain a GPA average of at least 3.0, and that there should be no restrictions at all on parents’ abilities to transfer their students to any public school they want outside of their local one. The point isn’t a worship of private schools or a hatred of public schools, the point is to give parents easy access to many different kinds of education for their children.

Professor Hawkes argues that we should do this kind of thing as far as the university level. Well, I’m not sure he’d approve of the parallel to the voucher system, but what he said was that a college education should be made free for any student who keeps up a 3.0 average.

I’m not sure if free is the way to go, but I definately think that expanding vouchers to the university level would be well worth it.

Investing money in making it easy for people to get an education can only be a good thing.

Cross posted at Sophistpundit


1 Comment »

  1. > I am going to be honest here: I do not see the appeal of any of the arguments against vouchers.

    I’m with you on this one. Normally I can at least see the other side even if I don’t agree with it, but in this case I’m left in the dark.

    Recently I even asked an educator whose opinion I generally respect why she was so opposed to vouchers. She paused for a few moments, clearly mulling it over, but did not have a ready answer. Finally she offered this: Some needy families would not have the tools (read “motivation”) to avail themselves of the new opportunities. That means that it would help some children, but that others (those with indifferent parents) would fall through the cracks, and hence the program would be “unfair.”

    This astonished me, since it seems that her argument could be tailored to oppose virtually any social benevolence program whatsoever.

    Comment by bazzer — March 20, 2006 @ 9:38 pm | Reply

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