Why Johnny Can't Fail

New test standards leave states plenty of wiggle room

For decades, U.S. schoolkids have chewed nervously on their No. 2 pencils as they sweated over multiple-choice exams. Now, testing fever is about to spike. States are beginning to put into practice the No Child Left Behind Act, the sweeping education law George Bush signed last January. The decisions each state makes about how to proceed with the bill's mandates will determine whether it improves the education children receive--or actually lowers educational standards.

The scramble to meet the law's ambitious goals is already under way. States are required to test the math and English proficiency of every child in grades three through eight, which must begin no later than 2005. Each year thereafter, schools must show progress on their test scores, including those of poor and minority students. Those that fail to improve will be subject to escalating penalties, ranging from being forced to bus their students to better schools to having their administrations tossed out. The idea: Use testing to shine a light on what students are learning and to prod schools to do better.

The concept is simple, the execution anything but. Because each state--not Washington--gets to decide what proficiency means, it can in effect decide just how many schools are "failing." States also get to choose which testing system to use. If they follow the advice of most education experts, state officials will devote lots of time and money to designing high-quality tests that reflect the classroom curriculum and well-studied proficiency standards. A handful, such as Maryland and Massachusetts, are doing just that (table).

But at a time of budget crises from Albany to Sacramento, many education departments are under pressure to take a quicker, less costly approach. With education budgets already under the knife, there are few extra funds to improve classroom--and test score--performance.

Facing an aggressive timeline, state educators are setting standards that won't cause too many students to fail on the upcoming tests. Connecticut, for example, recently set its benchmarks so that 80% of students will pass its tests under the new federal guidelines. Louisiana and Colorado are following suit, while Wyoming set its proficiency goals so low that not a single school in the state is failing. Such moves prompted Education Secretary Rod Paige to fire off a blistering letter to the nation's school commissioners in late October, saying: "Some states have lowered the bar of expectations to hide the low performance of their schools. This is not worthy of a great country."

Yet even as Paige exhorts the states to bolder action, he isn't saying how they should pay for it. The new law provides just $490 million a year in added funding to help states cope with the extra testing costs. Some state officials say that won't cover the expense of creating higher-quality exams, but with the GOP now firmly in control of Congress, Senate Democrats aren't likely to prevail in their attempts to find more money. States also question the idea of flunking a majority of schools. "If we put a large number of our schools in the `needs improvement' category, we will lose the ability to identify [those] in greatest need of help," says Jack McCoy, head of testing at New Mexico's education department.

While the new law doesn't explicitly prohibit a race to the bottom, it does hold out the stigma of shame for states that go that way. Because every school must publish its test scores, parents will have a much better idea if their school lags behind others in the state. In addition, states must give the National Assessment of Educational Progress (NAEP) exam to a random sample of students every three years. So it will be obvious if many kids in a state fail the national exam but sail through on the state one. "There is nothing we can do to prohibit [states from setting low standards], but we can make things very public," says Federal Assistant Secretary of Education Susan B. Newman.

No question, it's a challenge to retool an entire testing regime. The first step is defining what students should know in each grade, as most states already have done. Next, states will need custom-designed tests, as well as the curriculums, to reflect these standards. It can take years to develop such exams, which can run up to $68 a student. By contrast, cheaper, off-the-shelf tests offer only a broad evaluation of what students should know at their grade level. Some experts also say they're more likely to prompt teaching to the test, since such exams aren't closely aligned with curriculums.

The new law doesn't allow states to simply buy ready-made tests without some tinkering to make them reflect classroom work. But some states, given the financial and time pressure, are inclined to do the bare minimum. West Virginia, for example, spends less than $2 a student on exams, according to the Education Commission of the States. "Given the current economic climate, there's a concern that states will have to fall back on the commercial publishers" that design the ready-made tests, says Margaret Goertz, co-director of the Consortium for Policy Research in Education at the University of Pennsylvania. (Most major test companies, including Houghton-Mifflin Co. and McGraw-Hill Companies, parent of BusinessWeek, offer both custom-designed and generic exams.)

Even with all the leeway they have, states won't be able to dodge some reforms. For example, they now must break out test results by race and income status. If any subgroup fails the state "proficiency" standards, the entire school will fail. Since poor and minority kids traditionally score lowest on tests, even middle-class schools may fail if they can't bring those kids along. Many educators think the embarrassment alone may goad schools to focus more on these groups. "For too long, these kids were forgotten," says David P. Driscoll, commissioner of education in Massachusetts, which already disaggregates scores.

One big loophole in the new law: Its penalties only apply to the 58% of public schools that receive Title I federal funds for poor students, leaving little leverage over the other 42% of schools. And even with the 58%, experts doubt the Bush Administration actually will impose penalties such as removing a school administration, for example. After all, education in America remains locally funded and controlled, and Washington, which only pays for 7% of all schooling costs, isn't looking to control more of it. "There's a political problem with how far the federal government can push" the new sanctions, says John F. Jennings, director of the Center on Education Policy in Washington, D.C.

Overall, there's broad agreement that the new law has the right goals. But it remains to be seen whether the act will spur states to pursue them with vigor--or simply game the system to avoid the stigma of failure.

By Alexandra Starr in Washington

    Before it's here, it's on the Bloomberg Terminal.