For education reformers, the 21st century looked intoxicating. In 2001 Congress passed the No Child Left Behind Act to give the millions of low-income and minority children deprived of the American Dream a better shot. Meanwhile, a welter of for-profit companies promised to deliver more effective education across the U.S.
Yet today revolutionary rhetoric is giving way to some harsh realities. Peter J. Stokes, executive vice-president at Eduventures Inc., a Boston market researcher, says any hopes that for-profits might save America's public schools have faded since industry leader Edison Schools went private in late 2003. "And 2005 will be a critical year for for-profit colleges," he warns. A number, including Career Education Corp. (CECO ), are under investigation by federal authorities for, in some cases, overly aggressive student recruiting. Still, Eduventures predicts that, barring major scandals, the $15.4 billion for-profit college market will grow 14%, because of demand for career-oriented courses.
For the $500 billion K-12 industry, President George W. Bush's reelection means that public schools will have to focus on the mandatory testing No Child uses to hold them accountable. Granted, there have been some gains -- but they aren't coming nearly fast enough to meet the goal of raising 100% of children to "proficiency" by 2014. Weak spots are already apparent. States including Texas and Colorado have simply made it easier for kids to pass. "The expectations are far too low for what students need," points out Ted Sanders, president of the Education Commission of the States. According to international test results released in mid-December, U.S. students continue to lag far behind those in many other countries, especially in math.
Money is another challenge. Although federal K-12 spending surged by more than a third during Bush's first term, the record federal deficit will prevent any substantial increases in 2005. As it is, that federal money upped national K-12 spending by less than 2%. The real burden to improve the schools will fall on the state and local governments that already provide more than 90% of the money and face their own growing budget pressures.
Higher education -- today's ticket to the middle class -- is also caught in a financial squeeze. Hard-pressed states are increasingly limiting aid to public colleges, passing the buck to college students who have to make up the difference. As a result, four-year public college tuition rose 10% last year, after a 14% hike in 2003. "But there has been no upward adjustment in the Pell Grant [the federal aid program] in three years," says American Council on Education president David Ward. Congress will take up the Higher Education Act, which authorizes financial aid, this year. But, predicts Ward, "there will be no new money."
That has led to a more stratified system. Less than one-quarter of well-qualified low-income students earn a BA within six years, vs. nearly two-thirds of higher-income students. And because a growing percentage of America's high school graduates are low-income or minority, the percentage of young adults going to college has leveled off in the U.S., even as it's rising in other countries. "We're on a collision course that could lead to a real decline in U.S. competitiveness," warns Patrick Callan, president of the National Center for Public Policy & Higher Education.
Reversing course will require much bolder action. First, the U.S. must find the money to ensure that low-income students get an adequate education and a real opportunity to attend college. But money alone won't be enough. "The only way we will ever get there is by also adopting fundamentally different approaches" to education, argues Sanders. That means paying teachers for performance, as the Teaching Commission headed by former IBM (IBM ) Chairman Louis V. Gerstner Jr. advocates. It also means making far better use of technology in schools, recruiting better math and science teachers, and insisting that colleges improve graduation rates. None of this will be easy. But a failure to act would be far more painful.
By William C. Symonds