Betsy DeVoss, billionaire by birth and a not-worker, not-educator, not-administrator and not-businessperson, had just squeaked by to become head of the Department of Education when Republicans offered up a bill to eliminate the Department. To justify this, they invoked the usual incantations of transferring curriculum and spending decisions to the states. Said the bill’s author, Representative Thomas Massie, of the educational backwater that is Kentucky, “Unelected bureaucrats in Washington, D.C. should not be in charge of our children’s intellectual and moral development. States and local communities are best positioned to shape curricula that meet the needs of their students. Schools should be accountable. Parents have the right to choose the most appropriate educational opportunity for their children, including home school, public school, or private school.”
My disagreement with Rep. Massie and his GOP colleagues is pretty basic – none of what they say is actually true. Parents already have the right to choose public, private or home education, and state and local school authorities already choose curriculum and education and graduation requirements.
So what does the Department of Education actually do? It manages over $1 trillion in assets, 92% of which are student loan receivables. In other words, the DOE is largely a lending institution. It also provides $148 billion in student aid from preschools to trade, postsecondary and veteran education, funds special education and inclusion for students with disabilities, and provides block grants to states for disadvantaged districts and school maintenance. Oh, and the DOE spends roughly 1% of its budget on research, college accreditation and teacher education grants. It directly reduces the cost of education for 32 million students. It does all this with a headcount of 4300 and administrative overhead of less than 3%. For reference, the vaunted JP MorganChase’s admin expense ratio is 56%.
Let’s play a “what if” game assuming all of these activities fell to the states and play the scenario out. Graduating high school seniors and college students are in limbo for years as states try to develop the capability to service student loans. Then states would have to gain voter approval to issue tens of billions in bonds to finance student loans, including hiring staff. Since 10-year municipal bonds are running at nearly 5% interest while equivalent Treasury notes are at 2.15%, the cost of student loans just more than doubled. That’s for states with actual borrowing capacity. Meanwhile, every state has to decide what to about the $3 billion education budget shortfall caused by discontinued federal grants. Do you want your property taxes to triple or close 1/3 of your schools?
No, really, those are your choices. Or you could call your elected representatives to tell them to quit believing we’re stupid, cut the crap and keep the Department of Education.