Archive for May, 2014

May 30, 2014

Public schools administrative bloat

by Grace

Over the last 40 years, K-12 administrative staff has grown at more than twice the rate of teaching staff and over fifteen times the rate of student enrollment.


So far, we have not seen a cause-and-effect relationship between increased spending on administrators and higher test scores.

If academic achievement on the NAEP is any measure, the policies of the past half century just aren’t working.

… The new NAEP scores confirm the outcomes found on the NAEP long-term-trend assessment, which has assessed reading achievement since 1971 and math achievement since 1973. Twelfth graders today perform no better in reading than high school seniors of the early 1970s.

Related:  “Public school administration staff surges in growth while test scores plunge” (Cost of College)


Lindsey Burke, “Education Spending Is Up, Test Scores Aren’t. Who’s to Blame?”, The Foundry, May 18, 2014.

May 29, 2014

Economic ‘mobility has not changed appreciably since the 1970s’

by Grace

Children growing up in America today are just as likely — no more, no less — to climb the economic ladder as children born more than a half-century ago ….

That’s the conclusion of The Equality of Opportunity Project, led by Harvard’s Raj Chetty.

Even though social movements have delivered better career opportunities for women and minorities and government grants have made college more accessible, one thing has stayed constant: If you are growing up poor today, you appear to have the same odds of staying poor in adulthood that your grandparents did….

Incorporating results from a previous study dating back to the 1950s, the authors concluded that “measures of social mobility have remained remarkably stable over the second half of the twentieth century in the United States.”…



This figure plots the difference in average income percentiles for children born to low vs. high-income parents in each year from 1971-1993. On average, children from the poorest families grow up to be 30 percentiles lower in the income distribution than children from the richest families, a gap that has been stable over time. For children born after 1986, estimates are predictions based on college attendance rates.

The effects of government intervention remain a subject for debate.

David Autor, an MIT economist who writes frequently about issues related to inequality, called the findings “a sort of Rorschach” test that will support many economists’ preconceived notions about the effectiveness of government programs in providing opportunity.

Some could view the results as a failure of programs such as Pell grants, Head Start and nutritional supplements for children that are intended to promote mobility. Or, he said, “you can view this as: Social policies have fought market forces to a draw.”

Fathers seem to matter.

 “The fraction of children living in single-parent households is the strongest correlate of upward income mobility” among all the variables the research team explored.

Cognitive skills also seem very important.

87 percent of poor smart kids escape poverty

… 87% of children with the highest level of cognitive skills who grow up in the lowest income quintile move out of that quintile by adulthood.

Although income mobility has not changed much, in many ways living standards for poor people have improved.

Bill Gates:  ‘Poor people far better off today than they were in the past.’


Jim Tankersley, “Economic mobility hasn’t changed in a half-century in America”, Washington Post, January 22, 2014.

May 28, 2014

American teens are not interested in summer jobs

by Grace

Fewer teens are working.

… In 1978, nearly three in four teenagers (71.8%) ages 16 to 19 held a summer job, but as of last year, only about four in 10 teens did, according to data from the Bureau of Labor Statistics for the month of July analyzed by outplacement firm Challenger, Gray & Christmas . It’s been a steady decline, seen even during good times: During the dot-com boom in the late 1990s, when national unemployment was only about 4%, roughly six in 10 teens held summer jobs….


And they are not very interested in getting jobs. Only 8.3% of teens who were not working last summer said they even wanted a job.


This doesn’t mean that teens are simply tanning by the pool or binge-watching Bravo (though some certainly are). Challenger says that many teens are in summer school (rates of summer school attendance are at one of the highest levels ever, he says), volunteering, doing extracurricular activities to pad their college applications and trying out unpaid internships. And all of these are worthwhile endeavors (well, minus the tanning and Bravo), especially as it becomes more competitive to get into many elite colleges.

Lack of work experience can be a disadvantage.

That said, experts say that paid work has value for a number of reasons — and that teens (even those who plan to go to college) who don’t do it may be at a disadvantage. “It’s critical for teenagers to work, to begin to understand the working world, the value of a paycheck” says Gene Natali, co-author of “The Missing Semester” and a senior vice president at Pittsburgh investment firm C.S. McKee. “Choosing not to work a paid job has consequences.”

The good old days?

One of my older relatives had a job in high school delivering both the morning and afternoon newspapers.  He and a friend would rise early each day to roll up and deliver papers before their first class, and then repeat the routine after school.  He was also in the school band, played varsity tennis, and maintained good grades, clearly demonstrating he was able to manage his time effectively.  A generation or two later, it’s hard to imagine many kids successfully maintaining a similar schedule of activities. Many of them need reminders to take their Adderal in the morning, and think they are too busy for a part-time job.  Maybe my relative was a remarkable young man, but many of his peers also worked during high school.

Times have changed.  Expectations have changed.  Kids have changed.

Related:  “Teens are too busy preparing for college instead of working” (Cost of College)


Catey Hill, “American teens don’t want to work”, MarketWatch, May 3, 2014.

‘Teen Summer Job Outlook Teen Employment Culd Remain Flat as More Say “Nah” to Summer Jobs’,  Challenger, Gray & Christmas, Inc., April 28, 2014.

May 27, 2014

What is the maximum 529 plan contribution limit?

by Grace

So you want to contribute the maximum amount to your child’s 529 plan?  Maybe you received a generous inheritance, and want to set aside enough funds to assure your child will be able to attend any college he chooses.

Here’s what the IRS says:

Q. Are there contribution limits?

A. Yes. Contributions can not exceed the amount necessary to provide for the qualified education expenses of the beneficiary. If you contribute to a 529 plan, however, be aware that there may be gift tax consequences if your contributions, plus any other gifts, to a particular beneficiary exceed $14,000 during the year. For information on a special rule that applies to contributions to 529 plans, see the instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

In practice, “the amount necessary” varies and is determined by each state-sponsored plan, with amounts ranging from about $335,000 to $400,000.  Check out for a complete list of state maximum amounts.

Here is how the New York 529 Advisor-Guided College Savings Plan explains the maximum contribution.

How much can I contribute to my account?

You can contribute on behalf of a beneficiary until the total balance of all Program accounts held for the same beneficiary reaches an aggregate maximum balance, currently $375,000. If there’s more than one account owner contributing for the beneficiary, this is the total for all accounts. Once this limit is reached, you can no longer make additional contributions, but you can continue to accumulate earnings.

Gift and estate tax implications

Since a 529 contribution is treated as a gift to the beneficiary for tax purposes, another consideration for donors is to understand how amounts greater than $14,000 could trigger tax liabilities.

… your contribution qualifies for the $14,000 annual gift tax exclusion and so most people can make fairly large contributions without incurring the gift tax.

For contributions greater than $14,000, 529 plans offer a unique gift-tax exclusion feature.

… Specifically, you can make a lump-sum contribution to a 529 plan of up to $70,000, elect to spread the gift evenly over five years, and completely avoid federal gift tax, provided no other gifts are made to the same beneficiary during the five-year period. A married couple can gift up to $140,000.

A good explanation of the details on how this works can be found at the Ameriprise website.

Related:  “Most families are not taking advantage of 529 plans for college savings” (Cost of College)

May 26, 2014

2014 college graduates are ‘the most indebted class ever’

by Grace

The average Class of 2014 graduate with student-loan debt has to pay back some $33,000 … Even after adjusting for inflation that’s nearly double the amount borrowers had to pay back 20 years ago.


… A little over 70% of this year’s bachelor’s degree recipients are leaving school with student loans, up from less than half of graduates in the Class of 1994.


 … According to a new Pew Research report, a record 37% of young households had outstanding student loans in 2010, up from 22% in 2001 and 16% in 1989….



Related:  ‘Growing student debt may be a reason for weak housing market’ (Cost of College)


Phil Izzo, “Congratulations to Class of 2014, Most Indebted Ever”, Wall Street Journal,  May 16, 2014.

Richard Fry and Andrea Caumont, “5 key findings about student debt”, Pew Research Center, May 14, 2014.

Richard Fry, “Young Adults, Student Debt and Economic Well-Being”, Pew Research Center, May 14, 2014.

May 23, 2014

Should we restrict ‘opportunity hoarding’ by high-income families?

by Grace

In a previous post I wrote that “cognitive skills are very important in escaping poverty”.

87 percent of poor smart kids escape poverty 

Looking at the other end of the wealth spectrum, it’s clear that family income is also very important in avoiding poverty.

74% of rich, low-skills kids escape poverty.

Here’s the same chart used in my previous post, but this time I’m looking at the orange bar on the far right.  It shows that 74% of children with the lowest cognitive skills who grew up in the highest income quintile manage to avoid a life of poverty in adulthood.  But most of these children do slip into a lower income level, with only 4% managing to stay in the highest income group when they become adults.



A college degree helps create a “glass floor” for high-income children.

The authors of the study described this resistance to falling very steeply down the income scale as a “glass floor”.  There is at least one factor that seems to be quite significant in helping these high-income adolescents of “modest skills” stay in the higher income groups.

Getting a college degree is associated with a 23% greater chance of an adolescent of modest skills—i.e., predicted to fall—remaining in a higher-income household as an adult.

Of course wealthier families are more able to afford for their children to complete college.  Their outlays typically include not only tuition and other direct costs, but also expenses like tutors, high quality K-12 schools, freedom from having to work part-time, and extra-curricular activities that pave the way to a college degree.  Non-monetary support in the form of encouragement and connections are also important.

Is there a problem of “opportunity hoarding” at the top?  And if so, should it be addressed?

Committed parents work very hard to make sure their own kids do as well as possible. They invest time, love, money, and energy into their well-being and prospects. This is a natural, commendable instinct, one of the deepest instincts of any of us. Indeed, we want more parents to feel like this. Why shouldn’t they do everything they can to help their children do well, even if—perhaps especially if—they are somewhat dim? What’s the problem here, exactly?

Of course advantage is passed down from one generation to the next in many ways that are benign, fair, and legitimate. Nobody is going to suggest affluent parents stop reading bedtime stories to their children in the interests of equal opportunity. But there may be some transmission mechanisms that are less legitimate. The use of social networks to close off certain areas of the labor market (e.g., the informal allocation of internships) could be seen as unfair hoarding of opportunities. Gaining preferential access to valuable education opportunities—for example, through legacy admissions—is another potential opportunity-hoarding mechanism. At the same time, the accumulation and transmission of financial wealth may also contribute to immobility at the top. Greater capital may, for example, ease transitions to higher education, or help with getting a foothold on the housing ladder in an area with good jobs.

Here, then, is the problem: the laudable desire of parents to do the best for their own children translates into systematic opportunity hoarding at the top of the income distribution. There is a strong meritocratic argument that lower-skill rich children should not triumph over the highly-skilled poor, and take up disproportionate space at the top.

It’s hard to find agreement on whether “hoarding” should be curtailed.  One idea would be to focus greater resources in providing support for the “poor smart kids” to attend colleges commensurate with their achievement levels.

How to get more high-achieving, poor students to attend selective colleges’

An important caveat from the study, which used the Armed Forces Qualifying Test (AFQT) to measure cognitive skills :

… Needless to say, adolescent AFQT and coding speed scores are far from a pure test of merit, or market ability. They simply measure certain skills that have developed up to the time of test taking. A whole host of factors—family background, formal education, and social environment—will have influenced this development. It is important to stress that our measures do not—cannot—capture innate levels of skill or ability.


Dylan Matthews, “87 percent of poor smart kids escape poverty”, Washington Post, November 20, 2013.

Richard V. Reeves and Kimberly Howard, “The Glass Floor:  Education, Mobility, and Opportunity Hoarding”, Center on Children and Families at Brookings, November 2013.

May 22, 2014

‘we do not know how to teach character’

by Grace

We don’t know how to teach character, and we should be wary of grading students on their character.

Teaching students “grit” and other character traits seems to be all the rage in K-12 education.  New York and other states actually mandate character education in public schools, with sometimes clumsy attempts to weave this instruction into academic content courses.  Education professor Jeffrey Aaron Snyder sees problems with these efforts, a primary one being that “we do not know how to teach character”

There may be an increasingly cogent “science of character,” as Levin says in the introductory video to his online class, but there is no science of teaching character. “Do we even know for sure that you can teach it?” Duckworth asks about grit in the same online video. Her answer: “No, we don’t.” We may discover that the most “desirable” character traits are largely inherited; stubbornly resistant to educational interventions; or both. We already know that grit is strongly correlated with “conscientiousness,” one of the Big Five personality traits that psychologists view as stable and hereditary. A recent report emphasizes that simply “knowing that noncognitive factors matter is not the same as knowing how to develop them in students.” The report concludes that “clear, actionable strategies for classroom practice” are few and far between. Consider the fact that the world’s “grittiest” students, including Chinese students who log some of the longest hours on their homework, have never been exposed to a formal curriculum that teaches perseverance.

How do you grade a student’s character?

Character education becomes an even more problematic issue when a significant component of grading is based on character.  It’s bad enough that there’s “no science of teaching character”, but it gets worse when teachers are giving grades on a such traits as a student’s effort, enthusiasm, curiosity, or gratitude.  Thanks, but no thanks.  Please stick to academic outputs when grading my child in school.

May 21, 2014

Apply now for the New York State STEM full-tuition scholarship

by Grace

The deadline to apply for the newly introduced New York State STEM scholarship is August 14.

The NYS STEM Incentive Program provides a full SUNY or CUNY tuition scholarship for the top 10 percent of students in each New York State high school if they pursue a STEM degree in an associates or bachelor degree program and agree to work in a STEM field in New York State for 5 years after graduation.

The dual goals of the program include helping students pursue STEM careers and promoting the state’s economy.

Innovative programs like the STEM Incentive Awards will help students compete in academic fields essential to the future of our state and nation,” said CUNY Interim Chancellor William P. Kelly.

“Through this program, New York State is helping to foster a connection between a student’s interest in STEM and their ability to successfully pursue a STEM career,” said Elsa Magee, Acting President of New York State Higher Education Services Corporation (HESC), the state agency that will administer the program. “These awards will encourage more of our most talented students to pursue their love of science, technology, engineering and math in New York State, which benefits our State economy directly and the global economy, generally.”

Failing to fulfill the program requirements can result in significant penalties.  For example, if a recipient does not complete the STEM degree or does not follow through after graduation on the requirement to work “full-time for five years in the fields of science, technology, engineering, or math in New York State, while maintaining residency within the State”, he must pay back the award.

The full list of approved occupations includes farmers, computer programmers, web developers, actuaries, cartographers, engineers, and secondary and postsecondary science teachers.

There does seem to be some flexibility in the choice of occupations.


Related:  “Free tuition at New York state universities for top STEM students?” (Cost of College)


 Sarah Darville, “State launches STEM scholarship for SUNY, CUNY-bound grads”, Chalkbeat New York, May 6, 2014.

May 20, 2014

On ‘average’, it’s still worth going to college

by Grace

Earning a four-year college degree remains a worthwhile investment for the average student. Data from U.S. workers show that the benefits of college in terms of higher earnings far outweigh the costs of a degree, measured as tuition plus wages lost while attending school. The average college graduate paying annual tuition of about $20,000 can recoup the costs of schooling by age 40. After that, the difference between earnings continues such that the average college graduate earns over $800,000 more than the average high school graduate by retirement age.

Beware of basing personal decisions on the “average” case.

Not everyone is “average”.  Therefore, the ROI for a college degree must be based on personal circumstances, which can vary substantially.  For instance, some college graduates take on enormous debt that should be figured into the college premium.

The college premium is also highly dependent on field of study and on characteristics of the student.

Most reports that claim to measure the value of a college degree do not control for a vital factor — the student.  They fail to account for what Bryan Caplan calls the “ability bias“.  This bias favors personal traits like intelligence, work ethic, and conformity — traits typically valued by selective schools as well as by employers seeking candidates for high-income jobs.

Take one example.

On average, a hard-working computer science MIT graduate with a 130 IQ will bump up the average earnings for college graduates while a lackadaisical ethnic studies major with a 100 IQ who graduated from a directional state college will  lover them. But even if neither attended college, the MIT-wannabee would still probably out-earn the second individual.

So, when it is reported “that on average the value of college is high and not declining over time” …

College Earnings Premium by Graduation Decades

Don’t forget to consider the other important factors, like college majors, costs, and individual ability, that lie hidden beneath the results.


Mary C. Daly and Leila Bengali, “Is It Still Worth Going to College?”, Federal Reserve Bank of San Francisco Economic Letter, May 5, 2014.

May 19, 2014

Democrats want to lower interest rate for refinancing student loans

by Grace

Democratic Senator Elizabeth Warren is leading the charge to allow refinancing of student loan debt at a lower interest rate.

Democrats said their measure would let holders of both federal and private undergraduate loans – some with rates of 9 percent or higher – to refinance at 3.86 percent.

Drafted in coordination with the White House, the bill is part of Senate Democrats’ 2014 legislative agenda aimed at giving all Americans “a fair shot” and rallying the party’s liberal base in advance of the November elections.

But like earlier rejected measures to raise the minimum wage and renew expired long-term jobless benefits for millions of Americans, it faces Republican opposition that could kill it.

“This bill would be hugely expensive,” said Republican Senator Jeff Flake of Arizona. “I don’t think it will be seriously considered.”

Democrats are sending a message to the middle class and attempting to bolster voter turnout.

The effort is part of of a broader messaging battle meant to portray Republicans as out of touch with the middle class. It goes part and parcel with the Democratic push to raise the minimum wage.

It also comes as Democrats seek ways to bolster turnout among their core supporters for the midterm elections, when an older and whiter electorate generally shows up to vote.

Let the rich pay for it.

The bill would cover the costs of those refinancings by enacting the “Buffett Rule,” a Democratic policy prescription that would ensure the wealthy pay some minimum amount of tax.

The costs are unknown, but taxes would be raised as much as needed.

Lawmakers still do not know how much the refinancing plan would actually cost, but they say they will adjust the terms of the Buffett Rule to fully cover the expenses of letting people refinance down to lower rates.

‘It’s the economy, stupid.’

They also argued that letting borrowers refinance at lower rates would be good for the overall economy. For example, freeing up funds that would have gone to pay higher interest could enable younger people to save money to buy a house or a car.

A study from the New York Fed released Tuesday found that 25-year-olds have an average of $21,000 in student loan debt. And young Americans with student loan debt are taking on mortgages at the lowest rate in a decade, and lag behind their peers who do not have college loans.

Schumer said student loan debt, which has grown in recent years to more than $1 trillion and is now the largest type of consumer debt, is “one of the major reasons our housing market is down in the dumps.”

“The whole economy has been weighted down by the huge debt burden on 40 million Americans aged 22 to 42 or so,” he said.

Related:  Federal student loan programs create perverse incentives (Cost of College)


Thomas Ferraro, “U.S. Senate Democrats offer student debt refinance bill”, Reuters, May 14, 2014.

Peter Schroeder, “Dems ready student loan push”, The Hill, May 14, 2014.

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