Are tax-funded student loans and grants financial “aid” or financial harm?  ”Harm,” political scientist Gary Wolfram would say. Tax-funded financial aid “results in increased tuition, leading to political pressure to further increase aid. This in turn leads to higher tuitions,” he writes.

Basic economics predicts that subsidizing the purchase of a product increases demand for it, and hence increases the price.  For example, in four-year public schools, a one dollar increase in student loans was associated with a 93-cent increase in average tuition students paid, writes Dr. Andrew Gillen in his study “Financial Aid in Theory and Practice.”

Dr. Gillen shows that since 1986, the federal government’s financial “aid” has nearly tripled. During this time per-student fees and tuition have almost doubled, Gillen shows. Student debt “has generally outpaced inflation” and family incomes, reports US News and World Report.

Educational opportunity hasn’t faired well, either.  In 1972, students in the top income quartile were six times more likely to earning a bachelor’s degree by age 24 than those in the bottom quartile. Today, upper income students are eight times more likely, notes economist Richard Vedder, author of Going Broke by Degree.

Politicians win points for being “pro education.” But politically-driven financial “aid” for college is truly harmful.  Low graduation rates show that “aid” distorts people’s career choices by encouraging them to attend college, even though learning valuable skills in an unsubsidized apprenticeship might be wiser. They drop out after realizing they’ve wasted time learning unmarketable skills. Then they must pay off debt, if they can find a job in today’s “stimulated” economy.

* * *
See also:
“Higher Education Subsidies” at DownsizingGovernment.org.
The Center for College Affordability and Productivity

No one would be talking about Tim Tebow’s football excellence had the Florida legislature acted differently when Tebow was nine years old. In 1996 the legislature allowed home-schooled students like Tebow to participate in local public school sports programs.

In high school, Pro Bowl line-backer Jason Taylor also benefited from such home-school friendly policies. But in college the NCAA revoked Taylor’s football scholarship for reasons related to his home schooling. In 1994 he successfully challenged the decision and regained the scholarship. After this case, reports ESPN, the NCAA streamlined eligibility requirements for home-schooled athletes.

In a 2007 ESPN interview, Taylor spoke out in support equal access for home-schooled athletes: “It’s important to let the kids know, and the people who are holding the kids back know, that there’s a lot of kids with a lot of potential.  … They just need a chance. … It’s a problem when you have sixteen states in our country that say it’s OK to play and the other 34 still have a problem with it. … Look, the parents are still paying tax dollars. If [the students] can’t play in the school system, then give the tax money back.”

The Tebow family has lent their name to TimTebowBIll.com, which advocates legislation “to allow homeschooled students equal access to sports and extracurricular activities” in Alabama. According to the site, Colorado is among 24 states that now allow equal access, while 15 have introduced legislation.

To paraphrase Mark Twain: Don’t let funding schools interfere with funding students’ education. Boulder Senator Rollie Heath was behind the defeated Proposition 103, the proposed tax increase for Colorado’s tax-funded schools. “I just don’t know how far in education cuts we’ll have to do before people realize what we’re doing,” he told the Daily Sentinel after the election.

Heath implies that increasing school funding improves students’ education. Where’s the evidence?  As I documented in a recent Denver Post op-ed, national standardized test scores for 17-year-olds have been essentially flat since the early ’70s, while real-dollar per-pupil spending has doubled since then.

Increased spending didn’t increase test scores, but it increased teacher employment. Since the early ’70s student-to-teacher ratios decreased by almost a third. Employment in K-12 schools doubled, though student enrollment increased by just 10%.

Prop. 103 was really a Democratic Party fundraiser. Hiring more teachers sends more tax revenue to teachers unions. The unions almost exclusively support Democrat politicians, who when elected push for higher school taxes, and hence more money for unions that supported their campaign. These politicians also oppose school choice, and hence protect tax-funded schools as a monopolistic cartel.

Don’t fret if you supported Prop. 103. You’re still free to donate more of your earnings to tax-funded schools. You just can’t force others to do so.  But if you really care about quality education, you should support efficient schools that provide quality education at low cost, rather than letting politicians determine where your money goes.

* * *
Update:  Oddly, the website for the Boulder Valley School District does not make it easy for people to donate to the district itself or specific schools. But the District has received more than $2 million in annual donations. I did find the following:

• a donation page for Summit Middle School (Boulder County)
• CrayonsToCalculators.org
• Education Foundation of St. Vrain Valley

For why this is good news, see my article in the Denver Post: Colorado Proposition 103: More tax dollars for school helps unions & Dem. party, but not students.  For a version with more Colorado data and contributions from education policy analyst Ben DeGrow, see: Proposition 103: More Tax Dollars for Schools Makes No Sense.

In terms of cost to taxpayers, see this Summit Daily op-ed by economists Barry W. Poulson and John D. Merrifield : Prop 103: What Is The Cost To Colorado Taxpayers?, based on this analysis.

Note that Prop 103′s supporters raised more than $600,000 to promote it, while the opposition raised around $25,000. That’s a ratio of 24:1. (This doesn’t count Compass Colorado’s contributions.)

Thanks to this People’s Press Collective post for the Denver Post declaration and link to the funding info.

Proposition 103, the tax hike brought to this fall’s ballot by Boulder Democrat Rollie Heath and the teachers’ unions, is really about taking more money out of the pockets of working families to enrich those unions. Throwing more tax dollars at government-run schools hardly would improve the quality of education.

Read the whole article: Prop. 103 would hurt working families, kill jobs.

Like many Coloradans, I received a robo-call supporting Proposition 103, in which the disembodied female supporter describes 103 as a “five-year time out from school cuts.” Nowhere does the robo-call mention the huge ($3 billion) tax hike that 103 actually represents.

Read the rest of his post: Colorado Prop 103 deception.

Ross posts a video where Kelly Maher plays a recording of the deceptive phone call:

Do you want government to throw even more of your tax dollars at Colorado teachers unions and their pet politicians, or do you actually want better education for children in Colorado?

Proposition 103 is about throwing money. Sponsored by Rep. Rollie Heath, D-Boulder, and endorsed by Colorado’s largest teachers union, the initiative would increase income tax rates by 8 percent and sales tax rates by 3.4 percent — both for five years.

But decades of increasing school funding has not increased student test scores. It has created jobs for teachers and revenue for their unions that almost exclusively support Democratic politicians. These politicians sustain tax-funded schools as a monopolistic cartel that squashes competition and limits choice for parents and taxpayers.

Read the rest of the article at the Denver Post: Proposition 103 is about more money for the teachers union.

Thanks to Ben Degrow for pointing me to data sources, and to Ari Armstrong for suggesting key revisions.

For some of the references in the article, see this post: Colorado Proposition 103: More tax dollars for schools does not improve kids’ education.

Consider per-pupil spending, as documented by the National Center for Education Statistics. It shows that, in constant dollars, per-pupil spending has doubled between 1973 and 2008.

[Graph source: Another Government Bailout, downsizinggovernment.org]

What has happened to standardized test scores during that time? NationsReportCard.gov has this data. This page shows results of the National Assessment of Educational Progress (NAEP) in math for 17-year-olds.  The finding? “At age 17, the average score in mathematics in 2008 was not significantly different from the scores in 2004 and 1973.”

How about reading? This page shows the “Trend in NAEP reading average scores for 17-year-old students.”  The conclusion is similar: “At age 17, the average reading score in 2008 was higher than in 2004 but not significantly different from that in 1971.”

The spending and test scores are no different in Colorado.

The NCES has a handy method to build a data table, from which I generated a spreadsheet of Colorado per-pupil spending for twenty years starting in 1988. Adjusting the figures for inflation using the Bureau of Labor Statistics calculator, I found that spending increased by 27% during this time.

Has this spending increase lead to improved education? One measure is the Colorado Student Assessment Program (CSAP). Last year the Denver Post reported:

Scores on Colorado’s annual academic assessment again came back flat, a trend that continues year after year in a state that is touted for pushing education reforms. … The announcement of no change in CSAP scores has become a yearly mantra …

Yet, Colorado per-pupil spending increased by more than 21% between 1997 and 2008 (inflation adjusted dollars).

Increased spending has been correlated with schools hiring more teachers and other employees. As I wrote in the Denver Post:

According to NCES data, student-teacher ratios have decreased from 21 in 1973 to 15 in 2008. Using NCES data, education policy analyst Andrew Coulson found that government school employment doubled since 1970, while enrollment increased by only 10%.

In the article I also comment on teachers union campaign contributions:

If standardized test scores don’t track with increased tax funding for schools, what does?  Teachers union contributions to political candidates who support the public school cartel. Inflation-adjusted teachers union contributions have almost doubled since 1990, according to OpenSecrets.org. In each year at least 94% of contributions are toward Democrat candidates.  Last year, the Colorado Education Association gave “1 dollar to Republicans for every 235 dollars given directly to Democrats,” reports IndependentTeachers.org.

State Senator Rollie Heath has put a major tax increase measure on the November 2011 ballot. The money would raise state income taxes and state sales taxes. Heath says that his tax increase will help the public schools, but nothing in his proposal requires that one penny of the new taxes actually be used for public schools. Get the facts from this flyer produced by Too Taxing for Colorado, the citizens organization leading the fight against the Heath tax increase.

Via Ari Armstrong.

President Obama praises the post-Sputnik “investment” in education. But subsequent PSAT math scores fell or stagnated for decades while school funding soared. Now he wants to “prepare 100,000 new teachers” in engineering, science, and math. Why? Since 1970, the number of teachers per student has increased by 50% and the cost of K-12 government schools has almost quadrupled. Meanwhile, national standardized test scores have not improved.

The president is no better with higher education.  He has increased tax-subsidies for higher education and says the United States should have the “highest proportion of college graduates in the world.”

But thanks to political meddling, there may be too many college students already.  ABC news just reported that “After four years, 36 percent of [college] students did not demonstrate significant improvement” in “key measures of critical thinking, complex reasoning and writing.” Economist Richard Vedder found that “30 percent of the working college graduates in the U.S. … have jobs that do not require a college degree.”

President Obama says “our free enterprise system … drives innovation.” Then instead of restricting parents’ school choice with monopolistic politically-controlled schools, he should promote free enterprise in education.

A version of this article was published in the Boulder Daily Camera on January 29, 2011.

Other responses to the state of the union:

• John Stossel his own address
• economist Don Boudreaux:
  

  My concern about the president’s cozying-up to business differs greatly from the concern that animates the political left. Contrary to popular presumption, being friendly to business is not the same as being pro-economic growth or pro-free-market.

• columnist David Harsanyi: “Obama says that ‘none of us can predict with certainty what the next big industry will be or where the new jobs will come from.’”  But then Obama goes and picks winners with your money.