Study claims charter schools more cost effective, provide better return on investment

story by Ryan Saylor

A study released July 22 by the University of Arkansas this week said research showed that charter schools provide a greater return on investment and are more cost effective than traditional public schools. The head of Arkansas' largest education trade group said the study only tells part of the story.

The study was released by the university on Tuesday and was said to have included research of schools in 28 states.

"The national report, titled 'The Productivity of Public Charter Schools,' found that charter schools deliver on average an additional 17 points in math and 16 points in reading on the National Assessment of Educational Progress exam taken by students for every $1,000 invested," the university reported on its website. "These differences amount to charter schools being 40 percent more cost-effective in math and 41 percent more cost-effective in reading, compared to traditional public schools."

One of the university's education professors said there were two primary reasons for claiming that charter schools were more cost effective than public schools.

“Across all states, we found charter schools to be more cost-effective than their traditional public school counterparts for one of two reasons: they either generate higher student achievement at a lower cost or they generate equal to slightly lower student achievement at a much lower cost,” said Patrick Wolf, Distinguished Professor and holder of the Twenty-First Century Chair in School Choice at the University of Arkansas. “Now that we know how well schools are using the public funds they receive, it would be fascinating to see what charters could accomplish if they had close to equitable funding.”

But Tom Dooher, executive director of the Arkansas Education Association, said Friday (July 25) that the study was flawed for several reasons.

"First, I think the readers need to know who funded the project — the Walton Family Foundation. They are pro-charter school advocates. So there is a bias going into that," he said.

Dooher also said the study only reviewed math and reading test scores and did not look at the "whole child."

"We know that a child is much more than a test score," he said, adding that public schools are tasked with providing a full curriculum and set of extra-curricular activities, such as arts, athletics, band and more, which contribute to some of the increased costs that may have been included in the study.

Dooher said limited extra-curricular activities coupled with the fact that charter schools are not necessarily under a mandate to accept and educate all children within district boundaries play into why the study is not an "apples to apples" comparison.

Even though he said the study was not a fair comparison, the university said the study compared "two similar students, one attending a charter school and the other attending a traditional public school. ROI (return on investment) calculations then factor in dollars invested in a school, academic achievement and projected lifetime earnings – to see which school type 'pays off' over time in terms of the economic benefits from increased learning."

“This study is path breaking and is likely to spearhead a new and important policy debate,” said Eric Hanushek, Senior Fellow at the Hoover Institution at Stanford University, who reviewed the report’s methodology and key findings. “Until the 2008 recession, schools largely acted as if they were immune from considering finances and returns on expenditures, but we now know that this is no longer possible. This timely study invites a more rational discussion of policy choices, not just with respect to charter schools, but also in a wider context.”

But Dooher said a larger study needs to be conducted over the long-term before any policy discussions take place. He said that Art Rolnick, former director of research and public affairs at the Federal Reserve Bank of Minneapolis, conducted a study that showed a real emphasis should be placed on early childhood education in order to increase return on investment and cost effectiveness in education.

"He did a 16- to 20-year study and started with children in early childhood. He found that when you educate the whole child, you get a 16% better return rate on that child," Dooher said, adding that overall welfare costs and incarceration rates proved to be lower, as well.

"You can't take a one year snapshot of one test that looks at a child's reading and math score. You need to look at the career of a child. If you want the answer on the return on investment, you need to look at the career of a child."

Dooher said charter schools have not been in existence long enough for a study of significance to yet exist and added that until charters take on any and all students just as public schools must do by law, any studies would continue to be fundamentally flawed.

"Look, it makes for a good headline and it makes charter schools feel good about what they're doing, but it does nothing to tell us how well they're doing," he said. "I think what we need to make sure is that the public has an understanding of what do they want schools to produce? And once we have that understanding and ask that question, then we can understand what we want our kids to look like when they graduate. Once we have that, we can study to see if we're getting what we want. But to say are we doing that cost effectively is not an apples to apples comparison."