U.S. Department of Education

Each January, Early Ed Watch predicts where we will see the most action, innovation and consternation in the year ahead. Here are the hot spots we see for 2013. Notable is the absence of the reauthorization of the Elementary and Secondary School Act, otherwise known as No Child Left Behind. Prognosticators don’t give the bill much chance of making progress this year, given stalemates between the two houses of Congress.

The Child Care Development Block Grant, on the other hand, could see some action on Capitol Hill.  Debates on how to evaluate teachers will likely continue to dominate, as they did in 2011 and 2012. And at least one topic has popped up consistently since 2010 when we started this exercise: Head Start reform via the new "re-competition” process.

Congress pulled the country back from the edge of the fiscal cliff late Tuesday night when the U.S. House of Representatives voted to pass an agreement urgently negotiated and passed by the Senate on New Year’s Day. But the possibility of sequestration, the across-the-board cuts to virtually all federal programs scheduled to occur on January 2, 2013, remains unresolved.

Congress pulled the country back from the edge of the fiscal cliff late Tuesday night when the U.S. House of Representatives voted to pass an agreement urgently negotiated and passed by the Senate on New Year’s Day. The agreement, set to become law this week, addresses some, but not all, of the policies that make up the fiscal cliff. It deals mainly with expiring tax policies, but only postpones for a few weeks the automatic spending cuts set to take effect on January 2 and does not increase the limit on the national debt. The pending law – titled the American Taxpayer Relief Act of 2012 – extends or makes permanent a number of tax benefits for education.

Few observers outside of Washington understand the extent to which Congress and the president make education policy through the tax code. Exemptions, credits, and deductions now account for over $30 billion a year in “spending” (in the form of forgone revenue) for education, mostly for postsecondary education. But a good portion of that spending was set to expire or had already expired at the end of 2012. With the passage of the American Taxpayer Relief Act of 2012, those policies are here to stay for a few more years, or in some cases permanently. (The table below lists the expiring policies and the pending extension.)

The largest of these tax expenditures related to education, the American Opportunity Tax Credit, was set to expire at the end of 2012 and revert to the less-generous Hope Credit. Instead, it has been extended for five years, through 2017, at a $67.3 billion 10-year cost to taxpayers. Other tax expenditures, including Coverdell education savings account benefits, employer-provided educational assistance, and the student loan interest deduction, were permanently extended. Those three combined will cost more than $21 billion over 10 years.

Two other education tax expenditures – the classroom expenses deduction for K-12 teachers and the deduction for qualified tuition and related expenses for postsecondary students and their families – were extended through 2013 after both deductions lapsed at the end of 2011. The short renewal Congress afforded to them this week means lawmakers have set themselves up for another fight over the deductions at the end of the 2013 calendar year.

Moreover, the deal Congress produced failed to answer other questions. Sequestration, the across-the-board cuts to virtually all programs scheduled to occur on January 2, 2013, for example, remains unresolved. Instead of either implementing the cuts this month or cancelling the threat of sequestration, the cuts have been delayed until March 1, 2013. That’s just a few weeks before the short-term continuing resolution, under which the federal government is currently operating at fiscal year 2012 funding levels, expires.

And according to the Treasury Department, the U.S. hit the debt ceiling – its borrowing limit – on Monday. Treasury Secretary Tim Geithner said the Department would engage a set of “extraordinary measures” to buy time, giving lawmakers until late February to act.

All this means the fiscal cliff agreement is really just a short respite on the way to the next fiscal cliff, scheduled to hit again in just a few months. Admittedly, the next agreement may be slightly easier to reach, given that it will occur under a new Congress with more Democrats in both houses (though leadership will still be split, with a Democratic Senate and a Republican House), and the biggest tax issues are now settled. But the circumstances haven’t changed, at least on the spending side. School districts are still at risk of losing significant federal funding (estimated at 8.2 percent per federal program, across the board). And Congress faces yet another knock-down, drag-out fight over spending levels and deficit cutting.

Rumors swirling around Washington, D.C. suggest President Obama and Speaker of the House John Boehner are close to reaching a deal to head off the expiration of current income tax rates and across-the-board spending cuts scheduled for January 2013. This is the dreaded “fiscal cliff.” But if they can’t reach a deal soon, the effects will be felt at public schools across the country – particularly at so-called “federally impacted” schools. Using data published annually by the National Association of Federally Impacted Schools (NAFIS), we calculated the anticipated effects of the across-the-board cut on those 1,238 school districts. (Click here to download our calculations.)

Before diving into those figures, let’s review how we got to the fiscal cliff. Under the Budget Control Act (BCA), which lawmakers passed in August 2011 as part of a bipartisan deal to increase the federal debt limit, a Congressional supercommittee was charged with developing policies that would reduce the budget deficit by more than $1 trillion over ten years. Predictably, they failed to reach an agreement on what those policies would be. So the BCA’s backup plan was triggered.

The first part of the backup plan reduced annual spending caps for appropriations funding for the next ten years. The caps effectively reset that portion of the federal budget about 2008 levels. And because of a timing quirk (fiscal year 2013 began in October, but the caps aren’t put in place until January 2, 2013), 2013 appropriations are to be reduced retroactively by across-the-board mid-year rescissions, known as sequestration. The Office of Management and Budget estimates that the sequesters will reduce funding by 8.2 percent per domestic discretionary program, compared to prior year funding.  (Pell Grants and school nutrition programs are exempt). For schools, this means an 8.2 percent cut to virtually every federal program (Race to the Top, Title I, special education grants) from which they receive funds. 

Another timing quirk will, however, delay the cuts until early 2014 for most schools. Big federal education programs like Title I grants to school districts for economically disadvantaged students ($14.5 billion in FY2012) and special education state grants ($11.6 billion in FY2012) are mostly funded a year ahead of time through advance appropriations, which means they were allocated their 2013 funds too early for the sequester to rescind them. So the sequester will apply mostly to funds they would use in 2014. That buys school districts extra time to plan for those cuts, or Congress additional time to cancel the cuts before they happen.

Still, some school districts will be harder hit than others because they receive a larger portion of their budgets from federal monies. Some of those districts receive most of their funding from the federal Impact Aid program, which helps districts that lose out on property taxes because of federally advantaged property or personnel within their borders (like military bases or Native American reservations).

The Impact Aid program, funded in fiscal year 2012 at $1.153 billion, will drop to about $1.065 billion post-sequester. At about 75 of the school districts, the cuts to Impact Aid will be more than $500 per pupil. A dozen school districts will receive at least $1 million less in Impact Aid than under the 2013 continuing resolution – and that leaves aside other federal dollars those districts receive, like Title I and special education money.

And the schools seeing these significant, mid-year cuts are among the neediest schools in the nation. Nearly 350 Impact Aid districts have a reported poverty rate of at least 30 percent, according to the Census Bureau. In 2010, 87 percent of the schools had at least 30 percent of their students enrolled in the free- and reduced-price lunch program, a proxy for measuring the concentration of low-income students. More than sixty percent of districts had over half of their students in the program.

The most severely affected school districts, though, are likely to be the twenty percent that received more than a quarter of their revenue from the federal government in 2009.  Eighty-six of those school districts were funded more than half by federal dollars.

The costs of an 8.2 percent cut to every federal program are far more concentrated in schools with significant amounts of federal money at stake. Meanwhile, those schools are some of the most vulnerable in the nation. We anticipate the “fiscal cliff” agreement between Congress and the President will include more spending cuts – but we hope they are targeted to protect the students who most need the extra boost. 

Click here to download these data for every Impact Aid recipient in the country. To view other federal funding, demographic, and achievement data for every school district in the U.S., visit the Federal Education Budget Project’s database.

Jacqueline Jones, our country’s first Deputy Assistant Secretary for Policy and Early Learning, left her post at the U.S. Department of Education earlier this month. Early Ed Watch had the opportunity to conduct an email interview with Jones. Below is the complete interview, edited for typographical errors only.

The Education Watch podcast this week covers a lot of ground that pertains to early education. We talk about a forthcoming Head Start brief, news from the U.S. Department of Education on Race to the Top (including five new winners of Early Learning Challenge grants) and new commentary in Ed Week on half-day kindergarten and the mismatch with the Common Core. 

Last week on Ed Money Watch, Clare McCann reported on the new, comparable, statewide high school graduation rates released by the U.S. Department of Education. The bottom line: graduation rates are lower than previously reported, and achievement gaps are a huge challenge for states. But even though the news is grim, the fact that the data exist is a major achievement. The more accurate rates are the result of years of negotiations and efforts by governors, state education agencies, the U.S. Department of Education, and advocacy groups. It’s been no secret that previous graduation rate numbers were inflated, and often flat-out wrong. Unfortunately, though, just as states gain better graduation rate data, many are failing to use them to their full potential.

Originally, graduation rates were a component of high school accountability under No Child Left Behind (NCLB), but schools could often make Adequate Yearly Progress (AYP) if they showed very little improvement. That changed in 2008 with the adoption of the 4-year adjusted cohort rate. By the 2011-2012 school year, not only would accountability judgments be made with accurate data, but states would also base high schools’ AYP determinations on “continuous and substantial” progress toward graduation rate targets for all students and for student subgroups.

So far, so good. But the 2008 Department of Education couldn’t travel in time to see that in the 2011-2012 school year, many states would be transitioning away from NCLB-style accountability and AYP altogether. With the recent addition of Pennsylvania, only four states will not apply for some sort of NCLB waiver (if you count Texas and California as submitting valid requests). In the era of federal education policy via waiver, many states have refined their accountability plans by adding individual student growth, college and career readiness, and other measures to provide a better picture of school achievement than determinations based mostly on proficiency rates.

But adding multiple measures to accountability schemes – and then condensing them into one overall grade or ranking – can introduce new problems. An aggregate grade may be simple to understand, but it also provides less information to parents and policymakers than the data for each component within the grade. And under some states’ waivers, performance on one indicator – like graduation rates – could be masked by above-average performance on another, like test scores. Finally, while many argue NCLB placed too much weight on tests, diluting the significance of existing data by adding more measures to the system sends a different signal (and perhaps a negative one) to educators and parents about what matters most.

Before, low graduation rates could trigger a school not to make AYP and, therefore, to be placed in improvement status. Now, college and career readiness factors (like SAT or ACT scores and AP exam performance) are often weighted equally with graduation rates. This may create incentives for high school administrators and educators to focus on improving college and career readiness at the expense of efforts to prevent dropouts. To be sure, college and career readiness is important. But students will never be college- and career-ready if they don’t graduate from high school. Schools must pursue both goals – higher graduation rates and higher readiness rates – at the same time, and accountability systems should reflect both.

Even more alarming, many states’ waivers are a step backward from the carefully-negotiated 2008 regulations. States are still required to report the 4-year adjusted cohort rates, but many are not using the new measure as intended for accountability in their waivers. In some cases, states are backing away from commitments to hold schools accountable for subgroup performance. Worse, others have modified the 4-year adjusted cohort rate for accountability purposes by giving schools credit for students graduating in five or six years, or with a GED. With mounting criticism from advocacy groups and key policymakers, the U.S. Department of Education recently sent states a “Dear Colleague” letter to clarify that the 2008 regulations are still in effect.

However, actions speak louder than words, and the Department has not required any state to modify its waiver plan if it undermines the intent of the 2008 regulations. They should – and there is already a model for how to do it. The Department successfully negotiated with Virginia to adopt new, more rigorous goals for minority and disadvantaged students after their initial performance targets sparked a public controversy. Without getting serious about graduation rate accountability, the 2008 regulations will remain half-baked. States will know how bad the problem is, but they won’t be creating a policy environment in which schools are motivated to fix it.

The U.S. Department of Education has released some preliminary results on the effectiveness of the School Improvement Grant (SIG) program, a $545 million annual program into which the Obama administration poured an additional $3 billion in 2009 stimulus funds to “turn around” failing schools.

This week, the U.S. Department of Education released the first comparable, statewide high school on-time graduation rates. The results from the 2010-2011 school year show more students failed to complete high school in four years than was previously thought, especially when examined by subgroup.

The Bush administration’s Department of Education mandated the new measure – the adjusted four-year cohort graduate rate – in 2008, so states reported data from their first cohort this year. This year’s rates, therefore, refer to students who were 9^th graders in 2008 and earned a high school diploma within four years, with adjustments for students who transferred in and transferred out to other high schools. Idaho, Kentucky, and Puerto Rico did not report 2011 graduation rates; they were granted extensions because their data systems are not yet sophisticated enough to accurately calculate the new graduation rate. Previously, states defined their own version of the graduation rate calculation, and many students slipped through the cracks, inflating the graduation rates.

As the data from the Department show, the now-comparable graduation rate calculation often yields far more concerning results than did previous reports. Overall, the District of Columbia had the lowest all-student graduation rate under the new formula at 59 percent, and no state topped an 88 percent graduation rate (Iowa). Alabama’s state-determined graduation rate in 2010 was 87.7 percent; its adjusted rate in 2011 was 72 percent, a nearly 16 percentage point drop for students. New Jersey’s rate fell by almost 12 points from nearly 95 percent in 2010 (using the state-defined rate) to 83 percent under the new calculation.  

In addition to providing comparable data, the 2008 regulation continued what No Child Left Behind (arguably) did best: disaggregating student performance data by subgroup. The new data also provide the first comparable graduation rates for racial and ethnic groups, as well as for special populations like English language learners and economically disadvantaged students. As with standardized test data, the new graduation rate reporting has also revealed large achievement gaps within states.

The disparities among ethnic groups are striking. In Ohio, for example, 80 percent of students overall graduated on time, compared to only 59 percent of African-American students – a 22 percentage point difference. And even in states with large Hispanic populations, like Colorado, those students had a graduation rate 14 points below the overall graduation rate of 60 percent for all students.

Moreover, other sub-populations had abysmally low graduation rates. Only a quarter of Arizona’s English language learners and only 29 percent of Louisiana’s special education students graduated on time. Low-income students were documented as graduating at lower rates in nearly every state in the country, with the exception of South Dakota. In Connecticut, the difference in graduation rates for low-income students was more than 20 percentage points.

Under the No Child Left Behind waivers issued by the U.S. Department of Education this year, states designed new accountability plans – and in some cases, that means a renewed focus on graduation rate definitions, as some states modify their graduation rate accountability requirements. But whether states choose to use a different graduation rate in their NCLB waivers or not, they will still be required to report the new adjusted cohort rate, both overall and disaggregated by subgroups, at the state, school district, and high school levels. Check back with Ed Money Watch next week for more detail on this topic.

The new graduation rate data aren’t perfect – multiple states didn’t even report this year, and we don’t have any prior-year data to evaluate trends yet – but they reflect a much more accurate take of how high school students fare. The figures states reported should serve as a warning to education stakeholders that states are not serving many of their students, and particularly some of the highest-needs students, well enough.

Release the kraken data! The U.S. Department of Education has finally revealed some of the results from its research on the effectiveness of the School Improvement Grant (SIG) program, or rather, the one-time, $3 billion infusion to the SIG program included in the 2009 American Recovery and Reinvestment Act (ARRA). The controversial program, which was re-tooled by the Obama administration, has supported intensive turnaround efforts – up to $2 million per school – in over 1,300 of the nation’s chronically low-performing schools.

The sliver of data released this week includes 2009-10 and 2010-11 test data from about 730 of the 831 highest priority SIG schools, those categorized into Tier I or Tier II.[1] Here are the highlights (H/T to RiShawn Biddle and PoliticsK-12):

• Two-thirds of schools showed gains in math, and two-thirds in reading in the first year of the SIG program (2010-11)
• 25 percent of schools saw double-digit gains in math, and 15 percent in reading
• 40 percent of schools saw single-digit gains in math, and 49 percent in reading
• 28 percent of schools saw a single-digit decrease in math, and 29 percent in reading
• 6 percent of schools saw a double-digit decrease in math, and 8 percent in reading
• 26 percent of schools had posted math improvements the year prior to entering SIG, but declined once they received SIG funding; this happened for 28 percent of schools in reading
• 28 percent of schools had posted math declines the year prior to entering SIG, but improved once they received SIG funding; this happened for 25 percent of schools in reading
• A larger proportion of elementary schools posted gains in the first year of the SIG program, compared to middle and high schools, and they were less likely to see declines
• Rural schools appear to fair as well as schools in suburban and urban areas

But can we say that “there’s dramatic change happening in these schools” as Secretary Duncan claimed? Not so fast. Clearly, the Department didn’t read Matt DiCarlo’s excellent run-down of when you can – and cannot – make policy claims based on test data.

First, the Department doesn’t clarify whether any of these increases or decreases in test scores are statistically significant. Given inherent measurement error in any assessment and the fact that it is unclear if the Department is using proficiency rates (less accurate) or actual test scores (more accurate) to calculate these gains and losses, statistical significance cannot be assumed.

Second, the Department doesn’t clarify whether they are using cross-sectional or longitudinal data. In other words, were the gains or declines based on individual student growth (i.e. a student taking the 3rd grade test in math improved when taking the 4th grade math test) or were they based on comparing this year’s crop of 3rd graders in math to last year’s 3rd graders? My money is on the latter, which limits how we can interpret the data as the results aren’t fully comparable from the pre-SIG year to year one of the turnaround program.

Third, the Department doesn’t explain whether or how the researchers took into account other non-school factors that could affect student achievement. Without at least addressing these issues, it is impossible to know whether changes in student performance were even attributable to changes in school leadership or culture (i.e. the SIG program) rather than conditions in the economy or students’ home lives. And the Department doesn’t explain how they controlled for other policies at the school-level that could influence test scores. As chronically low-performing schools, the SIG interventions are unlikely to be the only improvement strategy or program at work in these schools.

These are huge caveats to the SIG data, but that’s not to say that ED’s findings aren’t important. They are. But more details are sorely needed to really make an accurate assessment of the program.

To begin with, the Department of the Education must disaggregate the data into the four turnaround models. More significantly, changes in student proficiency rates on standardized tests are only one possible outcome of the SIG program – and perhaps not the most important outcome to track. The Department plans to release student and teacher attendance data, enrollment in advanced courses, and other “leading indicators” for the SIG schools next year, but what about data relating to school leadership, school culture, and parent involvement?

While more difficult to quantify, these areas are also essential components of school turnarounds. Secretary Duncan alluded to it in releasing these early results: “What’s clear already is that almost without exception, schools moving in the right direction have two things in common; a dynamic principal with a clear vision for establishing a culture of high expectations, and talented teachers who share that vision, with a relentless commitment to improving instruction.” However, the data attached to Duncan’s statement failed to mention the effect sof leadership or teaching in SIG schools.

Predictably, analysts – notably Bellwether’s Andy Smarick – have already interpreted the early results as a failure of the entire SIG effort. But without more convincing and complete data, it really is too early to make definitive judgments about the program. This nuanced, wait-and-see approach may not be as satisfying, but in an effort as important as improving our nation’s worst schools, it is the right approach to take.