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  • Closing schools: How much money does it save, and is it worth it?

    Closing schools: How much money does it save, and is it worth it?


    Protesters rally against school closures outside the Oakland Unified School District office in September 2019.

    Andrew Reed/EdSource

    It makes intuitive sense: Smaller districts with fewer kids need fewer schools. A district with 40,000 students operates many more school buildings than a district with 20,000, which in turn runs more than a district with 10,000. With widespread enrollment declines (for example, California’s school-age population is forecast to drop by 15% over the next decade), many districts are now grappling with whether to close one or more schools.

    What’s the forcing factor for school closure decisions? Money, of course.

    District revenues, for the most part, are tied to the number of students a district serves. Enrollment has fallen in many districts, but during the last three or four years, federal pandemic dollars more than made up for the reductions in funding associated with those declines. Many districts have had plenty of cash on hand to keep running a fleet of under-enrolled schools. But federal relief dollars will dry up this fall, and it’s increasingly unlikely that the state will fill the gaps. That’s prompting shrinking districts to grapple with whether they can still afford to operate all their schools.

    Mostly what a district saves when closing a school is in staffing costs. Closing three schools can save the costs of three principals, three librarians, three nurses, and so on, and even some teaching positions where students can fill empty seats elsewhere in the district.

    At Edunomics Lab, our rule of thumb is that when a district has under-enrolled schools, closing 1 of every 15 schools saves about 4% of a district’s budget, mostly in labor costs. There may also be nominal savings in facilities, but labor is far and away the largest portion (85-95%) of the budget, and savings there will be more consequential over the long term.

    But not every closure brings layoffs. Where are the savings if the district isn’t issuing pink slips?

    Typically, the savings come from downsizing the district’s overall staffing counts with attrition. Often, the district can move staff from the closing school to fill vacancies emerging in other schools as staff leave on their own (thus avoiding layoffs). When a principal retires in one school, the district may move a principal from the closing school over to fill that spot. The cost reduction comes from not rehiring to fill those vacancies. If the leaders choose instead to keep all schools open, then the district has little choice but to rehire to fill each departing principal, nurse, librarian and so on to keep the larger number of schools running.

    Maintaining under-enrolled schools drains funds from all the district’s schools, not just the under-enrolled ones. Each district operates on a fixed revenue pool. Spending on principals, librarians and nurses in one or more half-empty schools means spending less on something else. It’s like having a fixed amount of frosting while trying to cover too many cupcakes. In the end, all the cupcakes end up with less frosting. For schools, that means they’ll start to see cutbacks to music, electives, AP courses, athletics and other supports as the district uses its limited funds to prop up the under-enrolled campuses.

    Take the Los Angeles Unified School District, for example, where the district spends an average of about $23,000 per elementary student at each of its higher-poverty schools. As the graph below shows, a few of its tiniest schools are drawing down over $34,000 per student from LAUSD’s fixed pool of funds. The higher price tag means less cash available for all the other schools in the district. (This information is available for all districts here.)

    Of course, closure decisions shouldn’t focus on money alone. For instance, districts may consider whether there are other nearby schools for displaced students to attend. Also relevant is whether the school is effective in its core mission. In the graphic above, some of the higher-priced under-enrolled schools are below the average performance line for higher-poverty schools. Not only are these schools expensive, but it also matters if that money isn’t delivering value for students.

    It’s also important to remember that not every small school has an outsize price tag. If a small school is able to operate cost-efficiently (meaning it has the same per-pupil costs as other similar schools), then closing it won’t likely save much at all. For a small school to be cost-efficient, it probably isn’t staffed in the same way as other schools. Maybe the principal also teaches a class, or the counselor is also the Spanish teacher. Or maybe the school uses some online options for electives or it operates as a multi-age Montessori model, or something else. And if it is demonstrating higher results for kids (meaning it is in that upper left quadrant on the graph), there’s even more of a case to leave it alone. What’s relevant here is that the small school isn’t draining funds from other schools, and is providing good value for the dollar.

    School closure decisions are never easy for any community, regardless of what the numbers say. But it’s the leaders’ responsibility to be good stewards of funds and ensure all students are served well. Assessing which schools are most able to leverage their money to maximize student outcomes can help leaders bring transparency to that difficult process.

    •••

    Marguerite Roza is director of Edunomics Lab and research professor at Georgetown University.
    Aashish Dhammani is a research fellow at Edunomics Lab.

    (For more on per-pupil spending and outcomes by school in California districts, explore Edunomics’ interactive data here.)

    The opinions in this commentary are those of the authors. If you would like to submit a commentary, please review our guidelines and contact us.





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  • Teacher diversity is an investment in students worth making and keeping

    Teacher diversity is an investment in students worth making and keeping


    Participants in the Diversity in Leadership Institute’s Aspiring Principals of Color program.

    Courtesy: Adela Montes / Diversity in Leadership Institute

    Representation matters, especially in the classroom. Students can do better when they are instructed by a person who looks like them. As California is challenged by fiscal uncertainties, school districts are bracing themselves to establish their own budget priorities. Now more than ever, it is time for school districts to protect and realize their promises of establishing and maintaining teacher diversity that is reflective of the students and communities they serve.

    Two years ago, the Los Angeles Unified School Board demonstrated its commitment to Black students, educators and families by passing a resolution on Black student excellence through educator civersity, preparation and retention. The resolution demonstrates the district’s commitment to foster a more inclusive and equitable educational landscape.

    But resolutions are only as good as their implementation. Los Angeles Unified has taken some initial steps that can be built upon and expanded to serve as a model for other districts.

    In addition to prioritizing workforce diversity in the district’s Ready for the World strategic plan, one of the district’s key initiatives has been to create affinity spaces for Black male and female educators. These spaces provide a supportive environment for Black educators to connect, share experiences, and receive mentorship and support throughout their careers. This effort is a crucial step toward increasing the representation of Black educators in the teaching profession and fostering inclusivity.

    Another significant initiative has been the district’s targeted recruitment efforts at historically Black colleges and universities (HBCUs) to diversify the teaching pipeline. By partnering with institutions like Cal State Dominguez Hills, the district has secured funding for programs that support Black students pursuing careers in education. This effort is a vital step toward addressing the longstanding inequities faced by Black students and educators.

    Additionally, the district has established mentorship and support programs to incentivize students to pursue careers in education and facilitate a seamless transition into the profession. The Educators of Tomorrow program, for example, offers financial incentives to students pursuing teaching credentials and provides resources and support to facilitate their career transitions. Moreover, the district’s collaboration with nonprofits to expand the Black educator pipeline and the emphasis on mentorship opportunities within the district demonstrate a concerted effort to nurture talent and foster growth.

    These efforts are not limited to Los Angeles Unified. In the Bay Area, Emery Unified School District is seeing progress through targeted approaches to improving outcomes for Black students by shifting to equity-based grading, paying teachers to tutor outside of school hours and continuing its focus on recruiting Black educators, among other strategic approaches.

    And recognizing the need to invest more in school leadership, in July 2023, Gov. Gavin Newsom and the California State Legislature approved the Diverse Education Leaders Pipeline Initiative, a $10 million dollar grant program, to address the need for a more diverse and culturally responsive education leadership workforce.

    Administered by the California Commission on Teaching Credentialing, this initiative seeks to credential and train over 300 new administrators across the state over the next four years.  To recruit, support and retain educators, particularly those of color, we must have a pipeline of culturally responsive school leaders.

    These local and state initiatives must be celebrated, supported and replicated. But while we celebrate Los Angeles Unified’s efforts to date, we know more transparency and engagement with community stakeholders is vital for realizing the promise of the district’s 2021 resolution. We also know others cannot follow what they can’t see. Los Angeles Unified and districts across California must share their data and learning so that others can join in taking action too.

    Fiscal uncertainties can undermine progress and change if our leaders don’t uphold their commitments and maintain their courage. Districts have shown progress toward ensuring our schools reflect the students and communities they serve. Our state and district leaders can’t stop investing and prioritizing teacher diversity now.

    We can’t build a better tomorrow for California’s students and families of color without keeping and making the necessary investments of today.

    ●●●

    Laura McGowan-Robinson, Ed.D., is CEO of the Diversity in Leadership Institute, a nonprofit working to build a movement of racially diverse and culturally competent public education leaders.

    The opinions in this commentary are those of the author. If you would like to submit a commentary, please review our guidelines and contact us.





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  • College is one of life’s ‘biggest investments.’ A new report asks — is it worth it?

    College is one of life’s ‘biggest investments.’ A new report asks — is it worth it?


    Credit: Julie Leopo / EdSource

    A new report released by the College Futures Foundation finds that while a large majority of California college programs allow graduates to recoup the costs of their postsecondary education in five years or less, a handful leave recent graduates earning less than the typical Californian with only a high school education. 

    The report by researcher Michael Itzkowitz of the HEA Group finds programs that did not result in recent graduates earning more than people with a high school diploma were concentrated at private, for-profit colleges. The paper flags such programs as having no economic return on investment.  

    By contrast, all programs analyzed at the California State University and the University of California had a positive return on investment, measured as the difference between the median graduate’s earnings five years after graduation and the median earnings among Californians aged 25 to 34 with no college education. Less than 1% of programs at both university systems were expected to take more than 10 years to pay off.

    Eloy Ortiz Oakley
    Credit: College Futures Foundation

    Eloy Ortiz Oakley, the president and CEO of the College Futures Foundation and a former chancellor of California Community Colleges, said the report is a response to survey data highlighting increasing skepticism about the value of higher education amid its rising costs. 

    “Paying for a higher education is, in many ways, one of the biggest investments that a student or their family is going to make in their life, second probably only to a mortgage,” he said. “If you think about it, people get a lot more information about other investments that they’re going to make, or other indebtedness they’re getting into, than they do when they invest in an institution of higher education. So we want to make sure that there’s greater transparency and more information for the student and their families when they’re investing in higher education.”

    Oakley said the report is not a judgment on whether a particular academic program should be offered as a result of its economic payoff. Rather, he said the report aims to help Californians to think of a college or university’s value less in terms of its acceptance rate and more in terms of its potential for increasing graduates’ economic mobility.

    Defining ‘return on investment’ 

    The report, “California College Programs That Pay,” analyzes data from the U.S. Department of Education’s College Scorecard to understand the earnings of roughly 260,000 people who graduated from undergraduate certificate, associate and bachelor’s degree programs in California with support from a federal loan or grant.

    Looking at 2,695 programs across 324 institutions, Itzkowitz compared students’ out-of-pocket costs for a credential to the additional money they earn as a result of completing it.

    To judge how much a postsecondary program costs, the study uses colleges’ self-reported data on how much students are responsible for paying after deducting grants and scholarships. That figure includes not just tuition, but also fees, books, supplies and other living costs. This net cost is used to calculate a price-to-earnings premium, a measure of how many years it will take to recoup the cost of a credential. 

    The study makes a couple of simplifying assumptions to calculate that premium. 

    The first is that students will take one year to earn a certificate, two for an associate degree and four for a bachelor’s degree. Those assumptions are not true for many students in practice. For example, only about 36% of Cal State first-year students who started in 2019 completed their degrees in four years. In cases where finishing a program over an extended period of time would be more expensive, the study could underestimate students’ actual costs.

    A second assumption is that every program offered by a given institution cost the same, since cost breakdowns for given fields of study were not available. 

    Finally, the study universe is limited to students who graduated, not those who started a program but didn’t finish it. Previous research suggests students who start a college program but don’t receive a credential tend to earn less than graduates, Itzkowitz said, and are more likely to struggle to pay down debt.

    Report highlights

    Across all programs included in the study, Itzkowitz calculated that 88% prepared graduates to earn back the costs of their credential in five years or less. Median earnings five years after graduation were at least $10,000 more than those of a typical high school graduate for the vast majority of programs, too.

    But 12% of programs left graduates taking five years or longer to recover out-of-pocket costs and, of those, 112 were flagged as having no economic return on investment.

    The report also notes differences across education sectors. Itzkowitz found that 17% of programs offered by for-profit schools had no return on investment, compared with only 1.2% and 1.3% of majors and credentials at nonprofit and public institutions, respectively. 

    One way for-profit institutions differed from their nonprofit and public peers is that the for-profit institutions offered the most undergraduate certificates in the state — and a larger share of those programs resulted in no economic payoff. Two fields, cosmetology and somatic bodywork, stood out as having the most programs with no measured return on investment.

    Still, many programs showed returns even at a one-year time horizon. The report calculated that almost half of programs at public institutions allowed graduates to recoup the costs of their credential within a year. Among private, nonprofit institutions, 7% of programs positioned graduates to earn back their costs within that period. Thirteen percent of for-profit institutions met the same criteria.

    Oakley said that he hopes the report inspires more research into whether higher-earning programs are attracting students of color, where high-return programs are located regionally and how to replicate programs giving the best economic payoff.

    “There are a lot of programs within our public institutions that provide a good return on investment,” he said. “What surprises me is that when we ask those institutions why, they don’t necessarily know why.”

    Other approaches to measuring the value of college

    While the College Futures Foundation report focuses on graduates’ earnings in the five years after they graduate, other recent research has sought to project college-goers’ earnings over a longer time horizon.

    For example, a 2019 report from Georgetown University’s Center on Education and the Workforce ranked 4,500 colleges by calculating their projected returns 40 years after enrollment. That analysis estimates the net present value of a student’s potential future earnings — that is, it balances the costs of paying for a college education today against the potential for higher earnings over time.

    The Foundation for Research on Equal Opportunity in May released a study framing return on investment in terms of how much college increases a student’s lifetime earnings after subtracting the costs of college. Rather than compare college-goers to the median high school graduate, that study estimates what college-goers would have earned had they not pursued higher education. It also takes into account colleges’ actual completion rates, a step that acknowledges the risk to students that start a program but don’t finish it. 

    EdSource receives funding from several foundations, including the College Futures Foundation. EdSource maintains sole editorial control over the content of its coverage.





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  • We must do more to ensure college is worth it for all students

    We must do more to ensure college is worth it for all students


    Credit: People Images / iStock

    The national rhetoric regarding the value of attending a college or university has reached a fever pitch. Being “better off” goes well beyond politics and the price of milk and eggs or an understanding of how tariffs work. Let’s face it: Education provides opportunity, and making higher education work for everyone must be a priority if we are to be a thriving, civilized society. 

    Let’s start with the current disruptive notion that poses the discomfiting question: Is a college degree worth it?

    Many of us working in postsecondary education felt that question didn’t go far enough in looking for the opportunity to improve in new and better ways when the stakes are higher than ever.  

    So, we took that question on as a challenge and expanded it to ask: What is college worth, and how do we measure and improve its value, especially for low- and moderate-income learners? Answers to such questions should prove fruitful, especially given that a new Gallup survey reports Californians overwhelmingly value postsecondary degrees or credentials, particularly because of their career-related benefits. Yet, we know that many are hesitant to enroll in college or university because of the perceived unaffordability of earning a credential or degree.

    This led our organizations to explore what kind of return on investment higher education institutions — part of a stale, antiquated system that does not always deliver on its promise of economic mobility and equity — provide to their learners. The ensuing report produced more nuanced data to inform continuing conversations on the value of postsecondary education, which, frankly, helps learners and their families make decisions on where they want to make a higher education investment from a value and return-on-investment perspective.

    Our first step was to look at the value that California institutions offer their low- and moderate-income learners. We also wanted to know if certain college programs or credentials made a difference.

    After all, learners who choose a postsecondary education should end up better off for it, right? 

    The good news we found was, yes, most students were better off for the most part. The troubling news, though, was that for some students, it was not always, and sometimes, never. 

    We’ve also learned that sometimes a student’s college major can matter just as much for an economic return-on-investment — if not more — than the institution itself. Some programs provide a strong return, but some offer none whatsoever, even leaving some degree or credential graduates making less than a high school graduate.

    For example, we found that almost all programs (97%) offered at public institutions in California show their graduates being able to earn back the costs of obtaining a degree or credential within only five years. Essentially, these graduates earn enough of an “additional income” because of their college degree to make their college program worth it.

    And, also impressive, nearly half of public college programs (48%) allow this within one year’s time. Programs at private nonprofit colleges in California generally take students longer, as only 7% enable graduates to recoup their costs within 12 months. And worrisomely, for-profit colleges show their graduates struggling to recoup their college costs, and nearly a fifth of their programs (17%) show no economic return whatsoever.

    This work is not a denouncement of any specific program or desired area of study, but rather an opportunity for further research to understand why and how these institutions and college programs produce these outcomes and where there may be policy and practical implications.

    A simple example of such a practical change may be for institutions to provide a clearer picture to students before they enroll of how much a specific program will cost — and provide information on how much former students typically earn. Another may be more geared toward college administrators to ensure that they are equipping students with the right skills — and necessary credentials — to pursue and succeed in careers within the geographic region where the institution is located.   

    Institutional leaders and elected officials must lean into discussions that are happening right now about the value of a college education and how it ties to learners’ futures and where improvements can happen.

    While more questions must be answered — and more research will follow — one thing has become abundantly clear: Our higher education system can no longer be enabled by a “this is the way we do things” mentality in places where it is not working.

    Postsecondary attainment must be tied to value, economic mobility and equity, as this is essential to creating a higher education system that drives a robust, inclusive economy that works for all Californians. 

    •••

    Eloy Ortiz Oakley is president and CEO of College Futures Foundation, whose mission is based on a belief in the power of postsecondary opportunity.

    Michael Itzkowitz is founder and president of the HEA Group, a research and consulting agency focused on college access, value, and economic mobility.

    The opinions expressed in this commentary represent those of the authors. EdSource welcomes commentaries representing diverse points of view. If you would like to submit a commentary, please review our guidelines and contact us.

    EdSource receives funding from many foundations, including The College Futures Foundation. EdSource maintains sole editorial control over the content of its coverage. 





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