Milton Friedman would have been proud, if he hadn't been so confused. The push for privatized education is just what the good doctor of economics ordered, in the form of vouchers to allow parents to purchase the best school for their kids. But he also said "We have always been proud, and with good reason, of the widespread availability of schooling to all and the role that public schooling has played.."
The following is a conservative summary, liberally interpreted, of the five steps necessary to save education in the U.S.:
1. Think of Children as Our Most Important Product
Charter schools are criticized for a few reports that document their poor or mediocre performance in comparison with public schools. The often quoted Stanford University Credo study is one. Others come from the Department of Education, Johns Hopkins University, the RAND Corporation, and the National Charter School Research Project.
But there are numerous reputable research organizations who have not produced negative reports on charter schools.
Success stories like the Knowledge Is Power Program (KIPP) and the SEED School show that the concept works if motivated students are chosen, if under-performing students are counseled toward alternative schools, and if expense is not spared to show the potential rewards for those innovating the process. Just as we test and re-test a product to ready it for market, so our children can benefit from industry-like quality control.
Most relevant for charter schools is the level of scalability. With economies of scale the true efficiency of the model touted by Mitt Romney can be realized. An example is the Louisiana Believes project, which will eventually be the country's most extensive voucher system. Although only 5,000 slots exist for about 400,000 eligible students, Louisiana intends to promote equal opportunity by offering charter slots to all takers, including those from any higher-income families to whom the invisible hand of the market will be reaching out each budget cycle.
2. Put a High Price on the Value of Education
If people don't pay for a product, they won't value it as highly. So we need to incentivize education. We need to make it an individual responsibility. Higher education provides a start, for tuition now covers a much higher percentage of instructional costs that have remained about the same for 25 years.
Thanks in part to this focus on individual responsibility, states have been able to save $12.7 billion on their education budgets in 2012, about the same amount saved in state taxes by job-creating corporations from 2008 to 2010. In Pennsylvania, Shell preserved billions for new oil exploration as education cuts of $900 million were proposed. In California, Apple was able to redirect billions to technology as college tuition rose 50% in two years. In Illinois, where education cuts were the highest, percentage-wise, in the nation, the Chicago Mercantile Exchange was able to keep its quadrillion dollar business in Chicago thanks to an $85 million annual tax break.
Yet the fanciful notion persists that education should be viewed solely as an investment in the future, and not as a cost that must be managed like any other business expense. That cost is a reality that must be met by the free market. For many long-term beneficiaries of the process, their individual costs can be amortized over years of future employment, with market-determined interest accruing in the years prior to finding employment.
3. Cut Costs
The efficiency of business-oriented education is confirmed by the fact that for-profit institutions spend only 21% of their total expenses on instruction. Why, it must be asked, should we depend on expensive human interaction when DVD training is constantly being refined, or when online courses can overcome the capital costs of libraries and extraneous facilities? Not only salaries but also pension costs have been saved by the elimination of nearly 300,000 positions in the education sector since 2008.
Where teachers cannot be replaced, costs can be controlled by selecting eager young candidates whose energy cannot be matched by years of career-stifling experience. Brief teaching stints with lower pay and higher class sizes will lead to a degree of turnover that will promote adaptability in our nation's students.
As for class offerings, areas such as engineering and nursing may prove too expensive to sustain as long-term programs, even with an increase in student demand. At one community college in North Carolina, this problem was addressed by offering a "pre-nursing" program with a waiting list for prospective nursing students.
Cutting costs has proved difficult without the economies of scale mentioned earlier. A recent study indicated that successful charter efforts such as Kipp and Achievement First spend substantially more than similar district schools, up to 30% over public school costs. It is anticipated that philanthropic activity will continue until a level of profitability can be induced from the lower-income student market.
4. Rely on Competent Business Leaders
Impressive is the list of notables who, despite their lack of educational experience, possess the enterprising spirit of capitalism that blazes the charter path. So dedicated are these pioneers that a dependency on credentials seems almost unnecessary.
Leading the way are Nikki Haley and Chris Christie and Sal Khan and Arne Duncan and Bill Gates. Some have administrative skills, some have political savvy, some have technological know-how. In Gates' case we have the bullishness of business support, as summarized by educator Diane Ravitch: "Never before was there an entity that gave grants to almost every major think tank and advocacy group in the field of education.."
Also from the business world comes Thomas Knudsen, former head of the Philadelphia Gas Works, who proposes an artful organization of "achievement networks" with public and private groups competing to manage the Philadelphia school system.
The business approach allows us to offer K-12 educational opportunities at about half the average public school cost of $9,000 -- before, of course, the fees required by law from the state. Higher education will similarly benefit from more free market exposure. Students will not be subjected to "indoctrination mills." Commercial banks will again serve as intermediaries for federal student loans.
Industry leaders remind us that charter schools do not take money from the public school system, because they ARE public schools. While it's true that the public system has the same fixed costs with or without money transferred to charters, the leveraging of public funds is an essential part of the business model, ensuring that at least 90% of revenue at for-profit schools continues to derive from the tax base. Meanwhile, the high number of student loan defaults and for-profit college dropouts serves as a natural market-based removal process for less motivated elements of the system.
5. Keep It Simple
In 2002, the U.S. Supreme Court ruled that the school voucher program in Cleveland did not violate the First Amendment pronouncement against the establishment of religion. As a result, up to 80% of students choosing a private school have been able to affiliate with institutions compatible with their belief systems. Clearly, the popular themes of personal choice and market-guided opportunity are driving instructional decisions. Students at Eternity Christian Academy, for example, are free to read from a science text that explains divine intervention during the six days of creation.
According to Eternity's Principal Marie Carrier, "We try to stay away from all those things that might confuse our children."
Nothing could be simpler and more straightforward than the words of founding father John Adams, who said: "There should not be a district of one mile square, without a school in it, not founded by a charitable individual, but maintained at the public expense of the people themselves." Free enterprise will ensure that such schools exist, at the expense of the people, and with the incentive of profit driving the entrepreneurs who take advantage of this growing American opportunity.