Monday, April 07, 2008

Charlie, your five minutes are up!



More than a year ago, Secretary of Education Margaret Spellings created a National Commission to study higher education. In politics most commissions are like Roman circuses - offered up when the political class wants to make some hay but has no idea how to solve the issues that people are concerned about. I served on one such commission in 1997 - we worked for 90 days (the limit of the congressional mandate) and came up with a complex but pretty credible report which did not say what the politicians wanted us to say.

The chair, a friend of the Secretary, ran the group like he was a king and the rest of the members were vassals. And he came to the job with some pre-established notions, based on his service with the Texas Board of Regents. His career in Texas also included a stint at developing an "accountability" model for K-12 which, according to his bio, became the basis for the federal statute No Child Left Behind. (Based on the results of NCLB, I am not sure I would claim that as a win - but that is another story) The success of the Texas model are arguably mixed. No Child Left Behind has been (rightly) criticized as a) federalizing education (not a constitutional function) and b) setting a series of standards which may not measure anything but the test results. One research study from Texas argued that "NO statistical study, or any other type of study purporting “adequacy,” should be interpreted as a final answer to the question of how much or in what way taxpayer money should be spent on public education." (In essence, reinforcing the notion that Hayek offered six decades ago that merely counting something may not tell you what you want to know.)

Miller's notion was that a) higher education is not performing to the level it should (graduation rates are lower than they should be, costs are not well understood or controlled, the relationship between what goes on in higher education and the world of work may be a bit attenuated) and b) therefore the best way to solve the problem is to federalize higher education. While many critics have written a lot about what Mr. Miller discovered, few would argue that the second conclusion has any relationship to the first. Indeed, if the performance of the federal intervention into K-12 is any indicator, the opposite conclusion should be considered.

So this week Miller shot his mouth off again by criticizing the College Board about their claim that a college education is worth $1 million over a lifetime. Admittedly the $1 million number is soft research. Inarguably the value of a college education over a high school diploma has paid handsomely in the last generation. (There are reasons why that may not be as true in the future - although surprisingly Miller's letter does not address those issues.) In his letter Miller comments "While the statistical analysis in this report is done by first-rate academicians and the sources of data are sound, there are serious questions about the assumptions used. " He then goes on to suggest that the present value of a college education is $280,000 rather than $1 million over a lifetime. He bases his conclusions on the two additional years that many students take to go to college (six years instead of four). He then goes on to question some other theories including the issue of whether the cost of the high number of dropouts from higher education actually provides a nominal discount to the lifetime earnings concept.

I am pretty sure (based on who the letter copies) that Mr. Miller did not write the letter. I am also not a big fan of economic impact studies. Individual cases tend to change individual results. For example, a student who attends prestigious private or public institution can be expected to have a higher lifetime earnings stream than one who attends a non-prestigious university. It could also be assumed that a student who attends the first is more likely to graduate in four years than the student who attends the second. Any fair analysis would address the net present value created by encouraging more students to go to their limits - with a percentage of people failing. Those are real interesting questions about the range of opportunity we offer but also could raise some issues of the relationship of costs to benefits to society. If Mr. Miller were serious about this question, rather than trying to make his political point, he might think a bit more carefully about how all of the factors fit together. But at least for him, those kinds of nuances are unimportant, making the political point is more important than trying to think about the issues.

Thankfully, Mr. Miller will soon fade into the veil of obscurity. The issues about costs and values should be something that those of us interested in higher education should continue to try to address. But Mr. Miller's absurd bottom line, to federalize education, is an idea that like its author, should quickly fade away.

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