Category Archives: education

Overwrought

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A letter-writer in The Wall Street Journal‘s Letters section offered this regarding the secondary education compact President Donald Trump (R) has on offer for, so far, a few of the more major colleges and universities.

The White House’s new compact is central planning in academic dress: dictating who colleges admit, what they charge and what professors may say….
…
Higher education has always thrived on independence and competition, not government loyalty oaths.

There is no central planning here, neither is there any White House diktat regarding admissions, charges, or speech. There is no requirement for any of the institutions to accept the deal.

Higher education still can thrive on independence and competition—and it will regain that independence when it stops being dependent on Federal government funding. Were these institutions (and the rest of them not yet offered) to decline Trump’s offer, all that would happen is that they would not gain preferential access to the Federal teat.

That would be the first step toward true educational independence.

Short-Sighted and Narrow-Viewed

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The good editors at The Wall Street Journal opined on the leaked-to-the-press Compact for Academic Excellence in Higher Education. They’ve missed on a couple of their points.

Where the compact goes too far is with its demand that schools freeze tuition for five years….

The editors noted that Mitch Daniels succeeded in this for more than just five years, and they insist that the matter should be left to the schools. The editors missed the simple fact that the matter is still left to the schools: they still can set their own tuition rates; they don’t have to sign the Compact, which is an entirely voluntary thing. They’ll still have access to Federal funding, too; they just won’t get preferential treatment.

…cap the enrollment of international students at 15%.

The editors worried about where that threshold came from, since they couldn’t understand it. The short answer, and the long answer, is Who cares? It’s a cutoff point easily achievable that leaves predictable room for (qualified) American students. As this graph shows, there are plenty of schools that would create that room were they to similarly cap their international enrollment:

The only serious question here is whether international enrollment should be capped at all, not quibbling over limits.

The editors’ rationalization for their beefs are that

Limiting tuition and international students at the same time could leave schools with a budget shortfall.

This would be just silly if the editors hadn’t tacitly accepted the Left’s penchant for spending as sacrosanct. The schools always can reallocate their spending, and they always can reduce their spending to fit the revenues coming in. There’s nothing in the proposed Compact to prevent that exercise in fiscal responsibility.

And this:

Well-intentioned but hard to implement is the compact’s effort to combat grade inflation. The compact demands that schools “commit to grade integrity and the use of defensible standards for whether students are achieving their goals.” Good luck trying to figure that out. Will a fleet of auditors investigate if slackers really deserved an A- in Econ 101?

What, then, is the editors’ solution? Just roll over and give up on solving a difficult problem? Their silence on this speaks volumes. It also demonstrates that their comfort zone is up on the porch, whence they can yap in complete safety.

Mamdani’s Procrustean Education Bed

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The Progressive-Democratic Party’s proudly Socialist candidate for New City Mayor Zohran Mamdani has announced that he wants to truncate children under the age of 5 years to shorten them to fit his short Education bed.

Zohran Mamdani said late last week he wants to end the gifted and talented program for kindergartners in New York’s public schools. News reports say he’d allow this accelerated instruction only beginning in grade 3, with a campaign spokesman arguing 5-year-olds shouldn’t be “subjected” to a policy that “unfairly separates them right at the beginning of their public school education.”

The only equality that socialists will allow is the equality of outcome, which guarantees equality at the lowest level. They cannot tolerate equality of opportunity, an equality that acknowledges all Americans’ right to achieve their full potential in life, an equality that respects all Americans, including those whose full potential might be less than that of others.

Socialism, instead, demonstrates its contempt for Americans by saying none of us can compete on our own, so government must eliminate competition.

Wrong Answer

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This time it’s Jason Riley, of The Wall Street Journal, who’s missing the street for the potholes. He wrote in his Tuesday op-ed,

The latest results from the National Assessment of Education Progress were released earlier this month, and they weren’t pretty. High-school seniors recorded the worst reading scores since 1992, and math scores were the lowest since the current test began two decades ago. Elementary-school students have also lost ground. Just 31% of eighth-graders scored at or above the proficient level on the science assessment.

And,

The ramifications extend far beyond our borders. The Program for International Student Assessment exam is a global assessment of 15-year-old pupils. In 2018 only 8% of US test-takers scored in the top tier in mathematics, compared with 15% in Canada, 18% in Japan, and 29% in Hong Kong. Today’s students will populate tomorrow’s labor force, and employers who rely on workers with math, science, and engineering backgrounds have been complaining for decades that too many Americans are uninterested or ill-prepared to fill these jobs.

 

But then he wrote,

Which brings us back to Mr Trump, who wants to make it harder for US companies to hire foreign nationals. On Friday the president announced that he was imposing a new $100,000 fee on applicants for H-1B visas, designated for skilled migrants who disproportionately specialize in science, technology and math occupations.

It’s true enough that we benefit from suitably skilled foreigners who enter our nation legally—those immigrants and Riley’s “migrants.” But the problem, which seems to have blown right by him, even as he wrote it, is identified by those employers…complaining for decades that too many Americans are uninterested or ill-prepared to fill these jobs.

The answer to the problem is not making it easy for qualified immigrants to enter our nation legally, even as that helps at the margins. The answer is to fix our education system. That must begin with eliminating, root and branch, the rent- and fee-seeking teachers unions who collect massive dues and lobby (too successfully) for government money while they work just as assiduously to block local, State, and Federal efforts to improve the public school systems those unions hold in thrall. An early move in this beginning step would be to recognize that teachers and their unions who work for public schools are public servants and public service unions just as are the civil servants and their unions working for any other arm of government, and bar them from striking, just as many civil servant unions are barred.

Our education system would be further improved by getting those unions and their hip-pocket politicians at the various levels of government out of the way of voucher and charter schools and home schooling, accepting that competition works toward product improvement in education as well as it does in industry.

At that point, the cherry on top would be to have local, State, and Federal funding not go directly to the schools, but instead follow the student to the school or home to which he transfers, or with which he stays after having transferred, for use then by the school or parent receiving the student.

What is their Value, Really?

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What is their Value, Really?

In a Sunday Wall Street Journal article on universities’ penchant for investing their endowments in private equity (as opposed to instruments bought and sold on public exchanges, these are bought and sold in private deals between the university and one or another private (i.e., not traded on an exchange) entity, or rarely a private deal to which a publicly traded entity might also agree.

A few exceptionally talented, or lucky, endowment managers seemingly did very well in this environment. Yale’s late David Swensen got an annualized return of 13% over the course of his management.

But how valuable are those investments, really? The WSJ‘s subheadline reads

Universities and other institutions have built up large private-equity holdings, but they are now lagging behind the S&P 500 and aren’t easy to shed

And this:

And much of what those funds earned for their investors in that time was on paper; endowments and other institutions were getting less and less cash that they could put to work in the booming stock market.

And this [emphasis added]:

…making it hard for managers to get the prices they want for the companies in their portfolios. Meanwhile, institutions have struggled to find investments that hedge against stocks and private equity without further eroding returns—and the problem has gotten worse with the stock market’s latest rally.

The value of any investment is what someone is willing to pay to get it. The initial value of those private equity investments in these endowments is what the endowment managers paid to get the private entity or a piece of it. Now they’re moving to sell some/most/all of these privately held pieces, but there are few to no buyers at those initial prices or anywhere near those prices.

This is Yale’s continued position:

Yale said in a statement that it remains committed to its private-markets strategy. “We trust that sophisticated investors, especially our partners who know us best, understand this,” the school said.

That sounds like the typical arrogance of Know Betters.

What is, in the end, the true value of those privately held pieces? It’s still whatever a buyer is willing to pay for them. And that calls into question two things: an accurate valuation of those entities and the wisdom of relying so heavily on non-publicly traded entities for endowment investments.

Former Yale endowment private-equity manager Tim Sullivan:

One of the reasons we hire these guys is because they know when’s the right time to sell an asset[.]

The problem here is that a potential buyer won’t necessarily agree that it’s the right time to buy that asset.

It’s tough to grow, or even just to maintain the value of, an endowment based on phantom valuations of its holdings.