America’s
Opportunity For All

Improve Education by Expanding Options

For generations, Americans have correctly understood that a good education is key to pursuing the American Dream.

Look no further than the unemployment rates. In November 2012, the Bureau of Labor Statistics reported that the unemployment rate for those without a high school diploma was 12.2 percent. For high school graduates, the rate dropped to 8.1 percent, and those who have earned a bachelor’s degree or higher have just a 3.8 percent unemployment rate. Moreover, Americans with a bachelor’s degree earn on average 70 percent more each year than those with just a high school diploma. But despite the central importance of education, our schools, colleges, and universities are underperforming and failing thousands of students across the country every year.

Consider the underwhelming performance of our K–12 system. The average SAT reading (verbal) score is down 34 points since 1972. Graduation rates have been stagnant since the 1970s: One in four students do not graduate from high school. In addition, reading and math achievement has been virtually flat over the same time period, and American students still rank in the middle of the pack compared to their international peers. Even more alarming are the disparities between rich and poor and whites and Asians compared to other minorities. Clearly, our public schools, particularly those with a higher proportion that are poor and minority, are not doing a good job.

For years, political leaders from both parties have offered the same solution: Spend more on education and increase the number of federal programs. According to the U.S. Department of Education, the average annual per-pupil expenditure in public schools is more than $11,000—double the amount it was in 1970 (in constant dollars). Some of the highest-spending school districts also have the worst-performing students. Take Detroit ($15,000 per pupil) or Chicago ($13,000 per pupil) for example: Only 6 percent of Detroit 4th graders and 15 percent of Chicago children are functionally literate. Governments in the United States spend more than half a trillion dollars a year on public elementary and secondary education, or about 4 percent of GDP. Federal per-pupil expenditures have nearly tripled since the 1960s, and taxpayers have spent more than $2 trillion on federal K–12 education programs alone.

If spending was the solution, the problems plaguing our education system would have been solved long ago. So what does work?

First, policymakers should limit federal intervention in education. A better path forward includes allowing states to consolidate funding from the programs under No Child Left Behind, opt out of the many federal requirements associated with those programs, and use those funds in ways that best meet the needs of local students.

Second, state and local leaders should empower parents with control over their share of education funding by allowing them to select the right school for their children. In too many districts, children are assigned to their local public school based on their parents’ zip code. Lack of competition means that public schools have little incentive to improve, which contributes to lackluster academic performance across the country.

Third, innovative leaders in higher education have been developing new business models and incorporating new technology that is bringing down the potential cost sharply while tailoring courses to student learning styles and economic needs. But obstacles like accreditation and federal rules governing loans are slowing the spread of new ideas. State and federal leaders need to remove these obstacles and give a green light to innovation in school and college education.

School choice, by contrast, allows parents to spend their education dollars on options that best fit the needs of their child. School choice operates under the concept that education dollars should not fund institutions, but should fund the child instead, following a child to any school of choice: public, charter, private, virtual, homeschooling, or a combination of educational options. Although these options are proliferating, millions of children across the country are still trapped in government schools that fail to meet their needs, fail to provide them with a quality education, and in some cases even fail to provide for their safety.

For children who do graduate from high school, college is an expensive proposition of increasingly questionable value. Tuition has been increasing at more than four times the rate of inflation; the average college student leaves school with more than $25,000 in debt; only a third or so of incoming freshmen graduate with four years (after six years, less than 60 percent have earned a diploma); and employers complain that graduates lack the skills they are looking for.

Change is coming, though, at all levels of education. For instance, customization and online learning is changing the relationship between student and teacher, rapidly in higher education but steadily at K–12; it enables information to be transferred and student performance to be monitored at a fraction of conventional costs. It also allows students to learn when and where they choose, so they can remain employed while taking classes in their spare time, thereby increasing the likelihood that they will complete their diplomas. And it democratizes access to some of the world’s best professors and highest-quality content. This offers the prospect of a fundamental restructuring of higher education with a sharp reduction in costs—a revolution that would be a boon to students seeking to acquire the skills they need in today’s economy. The issue is whether resistance from teacher unions and college faculty, helped by accreditation rules designed for another era, will hurt young Americans by slowing needed change.

Simply put, choice, innovation, and competition will improve education and lower costs for all students, bringing more and better opportunity—if they are allowed to do so.