Greg Forster, Ph.D. | March 12, 2014

What Failing Schools Really Cost Oklahoma

Greg Forster, Ph.D.

By the traditional measure, Oklahoma spends $8,630 per year on each student in public schools. That’s a huge amount of money, and the people of Oklahoma have a right to be upset at the substandard performance of its lavishly funded school system. However, even this spending figure doesn’t tell the whole story. It doesn’t account for all the students who never get the education the school system is paid to give them. If we look at spending per high school graduate instead of per student, at current spending levels the annual cost of Oklahoma public schools is not $8,630, but $10,483.

Suppose you buy your daughter ten piano lessons at $20 apiece, but you forget to take her to the first two lessons. You have to pay for all 10 lessons, but she only gets eight of them. Being a conscientious parent, you then buy your daughter another two lessons at $20 apiece so she can complete the 10-lesson course of instruction. And this time you remember to take her!

How much did you spend per lesson? Not $20, but $24. It’s pretty simple math: you spent a total of $240, and your daughter got 10 lessons. Yes, the immediate cost of each lesson at the time you paid for it was $20, but the total cost per lesson ended up being 20 percent higher than that because you didn’t do your job with the first two lessons.

The same logic can be applied to school spending. It does make sense for the school system to report its level of spending per current student, just as it makes sense for you to know that the immediate cost of each piano lesson is $20. But we can get a more comprehensive picture of how well the school system is serving its students and stewarding our resources if we also know the total cost for each student who actually gets the education the schools are supposed to deliver.

Oklahoma’s high school graduation rate is only 78.5 percent. According to calculations from the U.S. Department of Education, about 10,529 Oklahoma students who ought to have graduated from high school in 2010 dropped out instead. A state that spends so much has a right to expect a lot better than that from its schools.

The education of these dropouts is roughly analogous to the two missed piano lessons. The people of Oklahoma paid the schools to educate these students, but the students didn’t get the education Oklahoma paid for. So in addition to knowing how much Oklahoma schools spend on each student per year, it’s fair to ask how much they spend on each student they see through to graduation.

It makes sense to use high school graduation as a minimum standard of educational success. We can debate whether the schools do a good enough job educating the students they have, but not whether they’re educating the students they lose. Moreover, a broad range of critical life outcomes, from income levels to crime rates, is strongly associated with students graduating or dropping out. Getting a GED later in life does not reverse those trends very much on average. Some dropouts do turn their lives around, of course. But for most people, when schools fail to see students through to graduation, the impact of that failure will remain for life.

You might think this measure is unfair to schools, because students make their own decisions to drop out. I certainly wouldn’t deny dropouts’ personal responsibility for their own actions. And if someone said the schools would be a failure unless 100% of students graduate, I’d agree that would be unfair.

However, the evidence shows that dropout rates are strongly responsive to school quality. For example, a very modest school choice program in Washington, D.C. provided a huge bump in high school graduation rates—from 70 percent to 82 percent, according to a study using gold-standard random assignment methods. It appears that when schools serve students well, students tend to stay and graduate. Imagine that! Next thing you know, we’ll find out that when companies treat their employees well, employees are more likely to stay in their jobs and perform well. Who knows what crazy things we might discover next?

People are responsible for their own decisions, but they never make their decisions in a vacuum. When large numbers of people are making bad choices, they are each responsible for their own decisions, but it’s also a clear indication of a deeper problem. Good citizens have every right to ask what’s going wrong and what can be done about it.

If Oklahoma schools graduated 95 percent of their students (for real, not through phony “social promotion”), I’d say they were doing a great job of serving students in this area. If anyone complained about the other 5 percent, I’d say we should look somewhere else for an explanation, not at the schools. But with a graduation rate of 78.5 percent, I say public school leaders need to look at themselves in the mirror and ask what they’re being called to do about it.

We can help hold up that mirror by measuring school spending per high school graduate, in addition to spending per current student. Oklahoma’s spending by traditional standards is now $8,630 per student; that’s because in 2009-10 it spent just under $5.7 billion on 654,802 students. We could just as legitimately divide that spending figure by the 38,503 high school diplomas the state handed out that year. This tells us that at current spending levels, the total cost for each student the system nurtures from pre-kindergarten to graduation is $146,768. Divide that by fourteen for an annual spending rate of $10,483. Just as the cost per piano lesson went up 20 percent because of parental failure, the cost of providing each student in Oklahoma with a complete K-12 education goes up by 21 percent because of educational failure.

It’s important to understand this measure properly. This is not the amount Oklahoma historically spent on the 2010 graduating class over the previous fourteen years. It’s the amount Oklahoma will spend on every high school graduate if it maintains its current spending levels. That’s the right measurement to use; we want to know how much education costs under the state’s current policy and practice, not under policies and practices it used to have but now does not.

Like all measurements, this one has limitations. Presumably the student who drops out in 12th grade got at least some additional educational benefit compared to the student who drops out in 10th grade, and this measure doesn’t capture that. But when it comes to helping students have a good life, the difference in status between a graduate and a dropout is much more important than the incremental difference between a 12th grade dropout and a 10th grade dropout. At the most basic moral level, seeing through a tough task until it’s complete—even if it takes years—is one of the most important life lessons students need to absorb in school. And future employers are going to ask whether you graduated, not what year you dropped out.

The most important question is not whether Oklahoma taxpayers can afford to go on spending $10,483 per graduate every year, although that question matters. The most important question is whether Oklahoma can afford to go on failing 10,529 students in every high school class, year after year. Schools, like students, need to learn to see a tough task through until it’s complete. And if they tell us they’re having too much trouble learning, reforms like school choice could help them get up to speed.

Greg Forster (Ph.D., Yale University) is a senior fellow with the Friedman Foundation for Educational Choice. His research has appeared in the peer-reviewed publications Teachers College Record and Education Working Paper Archive, and his articles on education policy have appeared in the Washington Post, the Los Angeles Times, the Philadelphia Inquirer, the Chronicle of Higher Education, and numerous other publications.

Greg Forster, Ph.D.


Greg Forster (Ph.D., Yale University) is a Friedman Fellow with EdChoice. He has conducted numerous empirical studies on education issues, including school choice, accountability testing, graduation rates, student demographics, and special education. The author of nine books and the co-editor of six books, Dr. Forster has also written numerous articles in peer-reviewed academic journals, as well as in popular publications such as The Washington Post, The Wall Street Journal, and the Chronicle of Higher Education.

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