Should States “Pay It Forward” for Higher Education?

New models of funding higher education are currently being considered in debates throughout America. One recent debate concerns funding through “Pay It Forward” (PIF) programs. Since 2013, at least 24 states have considered legislation on PIF models of higher education finance. While details differ, the rapid proliferation of PIF program proposals shows a willingness to move from the current system of upfront payment to an income-based system of payment after leaving college.

What are “Pay It Forward” programs?

The National Association for College Admissions Counseling (NACAC) has put together a map of states in which PIF legislation has been introduced or passed. According to NACAC, 22 states have considered PIF legislation, while a more recent report by the Illinois Student Assistance Commission notes that at least 24 states have considered such proposals. Some states (like Ohio) define PIF as a deferred tuition plan, in which students would pay for college upon departure (not entry) from an institution. Other states (like Florida) defined PIF as an income share agreement, in which students would pay a portion of their income upon separation from a higher education institution.

What is deferred tuition?

Deferred tuition systems are higher education finance systems in which students do not pay for their higher education at the time of enrollment (upfront), but rather pay on the back end once they leave college. These systems delay higher education payments until the time that students enter the workforce and eliminate upfront tuition payments. By allowing students to delay payments, there is a change in the expectation of which generation pays for college. Under an upfront tuition system, it is assumed that parental resources would be used to pay for college. However, under a PIF plan the expectation is that students would pay for college themselves. Students are best able to do this once they enter the workforce following their post-secondary education. As such, payments are due, not at the time of matriculation, but at a time when students have earnings.

Deferred tuition programs have been used with in the past in the US. For instance, Yale University conducted an experiment in the 1970s and students at the University of California at Riverside proposed a similar model in 2012. Globally a number of nations use a higher education financing system in which payments for the price of education are deferred until after a student leaves college. D. Bruce Johnstone and Pamela N. Marcucci in their 2010 book categorize Australia, England, Ethiopia, Lesotho, Namibia, New Zealand, Rwanda, Swaziland, Tanzania, and Wales as nations that use deferred tuition systems.

What are income-share agreements?

The deferred tuition approach characterized in the discussion above requires each student to pay the full cost of her education (adjusted for any upfront subsidy or student aid). In contrast, an “income share” approach to higher education finance dispenses (at least in part) with the notion of a student-specific tuition amount. Instead, a special tax – sometimes referred to as a “graduate tax” – is imposed on students after they leave college. This tax is used to finance the cost of education received. However, there is no specific link between the cost of a particular student’s education and the amount paid under this tax. Instead, the tax depends on income following college, such that students would be required to pay some percentage of their income (say 3%) for a set amount of time following graduation (say 25 years). Under this scheme it is possible that high-earners could pay more than the total cost of their education and low-earners would pay less than the total cost of their education.

A number of companies have developed private income share agreements. Some provide broad income share investments that can be tied to higher education such as Upstart, Pave, and Cumulus Funding. Others, like the companies Lumni and 13th Avenue, provide funding only for students to attend higher education.

Where could someone find out more about “Pay It Forward” models?

I currently have a working paper on PIF programs with Dhammika Dharmapala from the University of Chicago. The paper develops a theoretical model of PIF programs. The results show that college access is enhanced by PIF policies. The equilibrium level of subsidies for higher education depends crucially on the pattern of income distribution and the extent to which higher education either increases or decreases income stratification (the difference between mean and median income). We show that the equilibrium level of subsidies to higher education will not necessarily decline under PIF, and may increase in some equilibria due to changes in college access for low income groups. Our work highlights important increases in college access that can be achieved with deferred tuition systems. We are considerably more wary of income share programs that are not as clearly beneficial to college access, and raise moral and ethical concerns.

by Jennifer Delaney

Jennifer A. Delaney, Ph.D., is an Assistant Professor in the Department of Education Policy, Organization and Leadership at the University of Illinois at Urbana-Champaign. She specializes in higher education finance and policy; particularly state funding of higher education.

The Forum on the Future of Public Education strives to bring the best empirical evidence to policymakers and the public. The Forum draws on a network of premier scholars to create, interpret, and disseminate credible information on key questions facing P-20 education

Charter Schools, Politics, and Democracy

Cross-post by Larry Cuban

As public charter schools have grown across the country since the early 1990s to more than 6,400 still largely located in big cities (there are 100,000 regular schools) , the debate over their existence, quality, and direction has continued unabated. Charters, enrolling over 2.5 million students (over 50 million attend U.S. public schools) continue to expand mostly in urban districts. Most charters are non-union, a few have joined teacher unions.

As public schools receiving funds from a district’s budget, charters span the universe of schooling. From for-profit cyber charters to company-managed chains of non-profit charters to ones established and operated by teachers, these schools have given low-income and minority parents choices they have not had when the only school available was the neighborhood one.

In the U.S., charter schools vary considerably in test scores. Some studies of charters claim that children do better in these schools.     Other studies reject those claims and point out that students in public schools outscore those in charters. Headlines such as “Charter Schools: Two Studies, Two Conclusions”—offering contradictory outcomes—give little confidence to those interested in whether these schools help, harm, or don’t make a difference in student achievement. For the immediate future, even with the most recent CREDO study (2015), no clear answer to the question of whether charter schools are better–that is, score higher on standardized tests than traditional public schools–  can be found in research.

Some have gone bankrupt academically and fiscally. About 15 percent of all charters that opened since 1992 have closed for financial, academic, and other reasons (2011).

Then there is the question of whether districts that established charter schools responded to the resulting competition by reducing the number of low-performing schools and increasing the high-performing ones? Here again, the evidence is mixed. Some researchers claim that district officials, fearing the loss of state funds, have introduced novel programs to stem the flow of students to newly chartered ones. Other researchers have found little evidence of districts with many charter schools and Educational Management Organizations (e.g., Aspire, Green Dot) launching initiatives to retain students in existing schools.

Over the past two decades, I have supported charter schools because as someone who has spent a quarter-century working in urban schools as a teacher and administrator and another quarter-century researching urban schools, I want low-income parents and students living in urban districts to have choices among schools that parents with more resources already have. I have visited many charter schools over the years to see how they are run and how teachers teach in them. To learn more about charters, I served for three years on the Board of Trustees of a Northern California organization called Leadership for Public Schools that operates four charter high schools. I was most impressed with my colleagues on the Board and CEO Louise Waters. I also know some the glaring shortcomings of charters across the county–Joe Nathan’s recent post in Education Week crisply lists them.

So I do have a sense of what the major questions about charter schools are, the contested answers to those questions, and the simple fact that charter schools are a political invention. And that is the point of this post.

Public schools from their very origin two centuries are (and have been) political institutions. Primary purposes for tax-supported public schools have been shaping citizens, preparation for jobs, improving society and the well-being of students in school. Political support for one or the other of these multiple (and conflicting) purposes have shifted over time. For the past thirty years, the over-riding goal for public schools has been better preparing the nation’s youth for the labor market and to strengthen the economy. This to-do item has been on every U.S. President’s agenda beginning with Ronald Reagan and continuing through Barack Obama. So charter schools are political innovations.

Yet, and this is a big “yet,” public schools in a democracy, juggling these multiple purposes, are expected (and have been for two centuries) to also conserve national and local traditions, beliefs, and values and, at the same time, help students to grow and change those very traditions to improve the community and nation. To conserve and change at the same time ain’t easy to do in a democracy. Nor is it for charter public schools. The political character of schooling becomes clearer when advocates for one or the other purposes of schools  overlook the complex tasks facing all public schools in a democracy.

In an exchange of recent posts and emails, I have read what both champions and opponents of charter schools have written. I want to quote from one of these exchanges between Deborah Meier and Joe Nathan and other strong supporters of charters. I received permission from Deborah to quote what she wrote recently to nearly two dozen of her friends, some of whom support and some of whom oppose charters.

If charters were only what [charter advocates] have had in mind what a wonderful world we’d be in!  But they are not that–or just that.  They are ALSO something quite different which is neither innovative nor democratic nor compatible with the idea of a public and democratic educational system–and that is happening in many countries (western democracies).   

 Maybe half the US charters–which is a major accomplishment–are what you both hoped for.  But half (and I believe the half who are in the driver’s seat since they have the money, influence and power to represent charterdom)  have other motives and beliefs, including eventually replacing public education with a completely “free” market of private institution, ideally for profit, aided by public funds.   They believe in this not merely out of greed but out of conviction that the market place is at the heart of democracy, it’s essential core.  And that, in the long run, it’s best for everyone.  They probably wouldn’t argue that it leads to equality, or anything like it, but that’s an honest disagreement since they do believe that it will overtime lift all boats.

 I wish wish wish that those like you, and so many others would find a way to separate yourselves from “the charter movement” which speaks loudly “on your behalf” and is funded largely by ALEC-style groups and individuals, plus well-meaning liberal foundations.  You might even get funds from some of the latter as a token contribution toward another view of charters.

Or, at the least, I wish you’d issue a statement at some time, with as many charter names as you could, stating an alternate view–one that excludes vouchers and profiteering and selectivity and privatism.  And, in fact, that represents part of its task to make all public education less selective, less tracked, and more consciously democratic.  That  together you represent an interest in demonstrating the many successful ways (plus some lessons from failures)  in which schooling can represent a form of democratic governance serving democratic purposes including the preparation of the young for active engagement in the politics of their worlds.  

A divided house…and all that–hardly helps our shared vision.    And we are often brutally divided now, denouncing each other, looking for gotchas.  That’s a prescription for our mutual failure.

Forgive me for preaching.   I am probably over-emoting–at least in part because god-knows how much longer I will be able to emote!!!!  I wish you guys could put together a gathering of maybe a few dozen charters to discuss these kinds of ideas–and invite me.  Parker–Ted Sizer’s baby–is one.  I’m on the board of a charter in NYC started by Todd Sutler that I love.  My ally and Mission Hill co-founder Heidi Lyne is a principal of a fine charter in Boston.  Paula Evans, and now former CPE graduate Caleb Hurst run one in Cambridge, and on and on.   

A number of Coalition [of Essential Schools] are charters.  As are many of the MET and Expeditionary Learning network schools.   Many urban districts are not open to what we did within the system in Boston or East Harlem, etc. because  many are “in bed” with the spread of charters, including some of the most offending ones.  [Governor Andrew] Cuomo (NY), [Mayor of Chicago ]Rahm Emanuel, [former Mayor of New York City Michael] Bloomberg, [former Chancellor of New York City schools Joel] Klein, et al. hardly share our vision of MORE democracy.

Let’s start a broader discussion about how we might lower the temperature of warfare between “our” side and up the temperature effectively against real enemies.  

In part 2 of this post, I offer some responses to Deborah’s points and my own reflections on charter schools.

By Larry Cuban

View his blog here.

The Forum on the Future of Public Education strives to bring the best empirical evidence to policymakers and the public. The Forum draws on a network of premier scholars to create, interpret, and disseminate credible information on key questions facing P-20 education

Upcoming Webinar: Charter Schools, Race, and Urban Space Where the Market Meets Grassroots Resistance

Webinar/Seminar: Dr. Kristen Buras – Charter Schools, Race, and Urban Space Where the Market Meets Grassroots Resistance (Tue, April 7th, 1pm (PDT)/3pm (CDT))

Dear colleagues and friends,

You are cordially invited to join the upcoming webinar/seminar on the Marketization and Privatization in Education seminar series. The next session, with Dr. Kristen Buras (bio below), is on Charter Schools, Race, and Urban Space Where the Market Meets Grassroots Resistance (abstract below).

This seminar will take place at 1pm (PDT)/ 3pm (CDT) on April 7th (Tue), 2015. There are three possible methods of joining the seminar.

(1) If you would like to attend in person in Vancouver, please come to Scarfe 308A, UBC (Vancouver campus). Map at: http://www.maps.ubc.ca/PROD/index_detail.php?show=y,n,n,n,n,y&bldg2Search=n&locat1=240-1

(2) If you are attending in person in Urbana-Champaign, please come to #22 in College of Education, University of Illinois, Urbana-Champaign.

(3) If you are joining the webinar, please go to http://bluejeans.com/ and click “Join meeting” as a participant and enter Meeting ID: 305154344 Please join us 10 minutes prior to the meeting time so that we can ensure everyone’s audio and video work properly.

For webinar participants, please (1) mute your microphone, (2) turn off your video feed, and (3) do not share screen. If you would like to ask questions or need technical assistance, please use the 'CHAT' typing function.

**To give us a better idea of how many attendees/participants we may have, please RSVP by filling out the form:

https://docs.google.com/forms/d/1EIbEi3bA5HuAkVhMLdVAZQ5qOn7EWSP9RjKM3-ZfY8g/viewform?c=0&w=1&usp=mail_form_link

For questions or other assistance, please send a message to Ee-Seul Yoon (eeseul@gmail.com) or Dwayne Cover (dcover@alumni.ubc.ca).

Hope you can join us.

Regards,

Ee-Seul Yoon and Christopher Lubienski​ at the University of Illinois, Urbana-Champaign
Dwayne Cover at the University of British Columbia


Abstract

Charter schools have been promoted as an equitable and innovative solution to the problems plaguing urban schools. Advocates claim that charter schools benefit working-class students of color by offering them access to a “portfolio” of school choices. In Charter Schools, Race, and Urban Space, Kristen Buras presents a very different account. Her case study of New Orleans—where veteran teachers were fired en masse and the nation’s first all-charter school district was developed—shows that such reform is less about the needs of racially oppressed communities and more about the production of an urban space economy in which white entrepreneurs capitalize on black children and neighborhoods. In this revealing book, Buras draws on critical theories of race, political economy, and space, as well as a decade of research on the ground to expose the criminal dispossession of black teachers and students who have contributed to New Orleans’ culture and history. Mapping federal, state, and local policy networks, she shows the city’s landscape has been reshaped by a strategic venture to privatize public education. She likewise chronicles grassroots efforts to defend historic schools and neighborhoods against this assault, revealing a commitment to equity and place and articulating a vision of change that is sure to inspire heated debate among communities nationwide.


* If you are interested in buying her book, please see the attached discount book flier.