Let’s Follow The Education Dollars


Let’s follow the money…

I associate Forbes Magazine and its readers with money, thus this column. Because School Reform is a big—and often very profitable—business, let’s follow the money. But be warned: reading this may raise your blood pressure.

The School Reform “industry” gets a good chunk of the $620 billion federal and state education dollars, plus millions more from foundations, businesses and wealthy individuals. Publicly funded charter schools receive hundreds of millions of dollars in donations every year. Mark Zuckerberg gave the Newark, NJ, schools $100,000,000 to support charter-driven School Reform in that city. Just three foundations, the Bill and Melinda Gates, the Eli and Edythe Broad Foundation and the Walton Foundation have handed out millions to expand the influence and reach of charter schools.

Where is the money going? Lots of it goes to individuals, because School Reform can pay well. For example, the top three executives at Teach for America are paid more than $900,000.  The highly regarded KIPP charter network pays its three top executives well over $1.3 million annually, and the KIPP organization–ostensibly public schools– has managed to accumulate cash assets ‘reserves’ of at least $70 million. In New York City, the honchos of at least twenty charter schools earn far more than the Chancellor of New York City’s public schools (who has responsibility for more than 1 million students). The founder and CEO of just two charter schools with a few hundred students (and poor academic results to boot) pulls down over $500,000 a year!

The School Reform crowd believes in widespread testing, and so a lot of money–billions and billions–goes to testing.  In 2012 the Brookings Institute estimated that testing contracts with vendors like Pearson came to at least $1.7 billion a year, but that dollar figure did not include test-prep materials, state personnel to manage contracts, the costs of technology (i.e., computers) for administering the test, and the huge amount of teacher and administrator time spent in preparing for, administering and analyzing test results. FairTest, an organization that opposes excessive reliance on testing, believes the full cost is “tens of billions of dollars annually.”

Can support for School Reform be bought, or criticism muted?  Foundations would seem to think so, if their grant-making is any indicator, because their largesse in support of School Reform is mind-boggling. For example, from roughly 2009-2015, the Bill and Melinda Gates Foundation handed out $135,4256,000 to just eight organizations, usually in the category of ‘advocacy.’ Two right-leaning organizations, the American Enterprise Institute and the Fordham Institute, received $5,634,000 and $3,497,000. Two teacher unions, the National Education Association (through its foundation) and the American Federation of Teachers, pulled in $9,227,000 and $11,189,000. The National Alliance for Public Charter Schools received nearly $17,000,000. Editorial Projects in Education, publisher of Education Week, received $10,730,000. An ostensibly independent consulting group, Bellwether, received just over $7,000,000; its founder, Andrew Rotherham, who writes a weekly column for Time Magazine, has been roundly criticized for failing to disclose his sources of support. However, the grand prize goes to the Council of Chief State School Officers, an openly enthusiastic supporter of the Common Core. The CCSSO has received at least $71,162,000 in Gates Foundation support.

Foundations support education reporting at Education Week and the Hechinger Report, often for coverage of specific School Reform efforts. Foundation and government School Reform dollars are keeping hundreds of professors like Harvard’s Thomas Kane and writers like Rick Hess of the American Enterprise Institute busy and presumably comfortable. (It’s what one wit has labelled “The leisure of the theory class.”)

Where Do Education Dollars Go? Unfortunately, It’s difficult to pinpoint exactly where education dollars are going or what we’re getting in return, because education spending is often opaque, rarely transparent.  As noted, it’s a $620,000,000,000 business with about 50,000,000 students. Let’s do some simple math and take away seven zeroes from both numbers: That reduces to $62,000 for 5 students, or $12,400 per child.

(Actual spending per student is wildly uneven.  In the nation’s 100 largest school districts, it ranged from a low of $5,539 in Alpine School District, Utah, to a high of $20,331 in New York City and $20,530 in Washington, D.C. in FY 2013. Nationally, and without any geographic cost adjustment, median spending per student was $9,353 in cities, $11,041 in suburbs, $9,214 in towns and $10,347 in rural areas (all significantly lower than our $12,000 per pupil, which might mean that some money never gets anywhere near schools but is absorbed by bureaucracies).  State and local governments provide 91% of the money, with the federal government putting up just 9%, although the Feds make a lot of the rules.)

Spending in charter schools, a prominent School Reform, is even harder to follow because charter schools have been allowed to change the rules of the game, even though they’re spending taxpayer dollars. Even non-profit charter schools are independent and rarely subject to scrutiny until their charters (usually 5 years) come up for renewal. Only then does the public discover that some charter operators have done strange, indefensible and sometimes illegal things with public money–by which time the money is long gone.

Here’s a problematic way to consider spending: $12,400 per pupil would mean a classroom with 25 students has a theoretical ‘classroom dollars’ total of more than $300,000. That classroom’s teacher might be absorbing about $100,000-125,000 in salary, benefits and payments into her/his eventual pension, but where does the remaining $200,000 go? School buses? Administrators? Construction? Pension payouts? I wish I knew….