Academic and behavioral outcomes among traditional public school students improve as their schools face greater competition from school choice, an analysis of Florida’s tax credit scholarship program shows.

As New Hampshire’s Education Freedom Accounts program takes off this fall, this research from Florida’s much older scholarship program shows how the competition created by school choice benefits students who remain in traditional public schools, not just students who take the scholarships.

“We find evidence that as public schools are more exposed to private school choice, their students experience increasing benefits as the program scales up,” the authors write. “In particular, higher levels of private school choice exposure are associated with lower rates of suspensions and absences, and with higher standardized test scores in reading and in math.”

Specifically, “a doubling in the number of students participating in the voucher program increases test scores by 3 to 7 percent of a standard deviation and reduces behavioral problems by 6 to 9 percent” for students who remain in traditional public schools.

And the effects are strongest for lower-income students.

The authors found that “public school students who are most positively affected come from comparatively lower socioeconomic background….”

They found smaller, but statistically significant, gains for higher-income students “who are very unlikely to be targeted by vouchers themselves, suggesting that benefits may come partially through generalized school improvements rather than through improvements targeted solely at voucher-eligible students.”

The study, titled “Effects of Scaling Up Private School Choice Programs on Public School Students,” was conducted by professors David Figlio of Northwestern University, Cassandra Hart of the University of California at Davis, and Krzysztof Karbownik of Emory University.

Previous studies have shown similar benefits for traditional public school students from the creation of school choice programs, but those typically focused on the first few years of the choice program. The authors wanted to see whether those findings would hold as choice programs expanded over many years.

The authors examined student achievement in Florida for the first 16 years of the tax credit scholarship, which began in the 2002-03 school year. The Florida Tax Credit Scholarship Program “provides dollar-for-dollar tax credits to corporations that contribute to nonprofit Scholarship Funding Organizations.”

At the start of the program, students with a household income below 185 percent of the federal poverty line ($33,485 for a family of four) were eligible for up to $3,500 in scholarships. Now the scholarships are an average of $6,815 per student and families that earn up to 260 percent of the FPL ($68,900 for a family of four) are eligible.

Figlio, Hart, and Karbownik looked specifically at Florida-born students between grades 3 and 8 because of consistently available standardized test scores.

The authors summarized their results in an essay for Education Next, where they listed the following findings:

• “As the scholarship program scaled up, academic and behavioral outcomes improved for students attending traditional public schools.”
• “Students attending schools with more competitive pressure made larger gains as program enrollment grew statewide than did students at schools with less market competition.”
• As the number of students using scholarships increases, test scores for public school students increased in reading and math. The number of students being suspended declines and “the proportion of days that students were absent falls.”
• “Reading and math scores at schools in markets with more competitive pressure increase by about 14.5 percent of a standard deviation by 2014, as compared to schools facing less competition.”
• Schools that later faced greater competition from school choice programs started with lower outcomes than other public schools. The competition from school choice programs raised student outcomes in those schools, narrowing the achievement gap between the lower-performing and higher-performing schools.
• Positive impacts were greater for lower income students, but also affected more affluent students.

More students using scholarships to attend private schools would increase competition for public schools and result in higher academic and behavioral outcomes and positive behavioral outcomes for non-scholarship students, the authors conclude.

For more information on New Hampshire’s Tax Credit Scholarship and Education Freedom Account programs, visit Children’s Scholarship Fund New Hampshire, which administers the programs.

To read our study on the new Education Freedom Account program, go here.

Previous studies that have also found improved public school outcomes after the introduction of school choice programs can be found here, here, here, here, here, here, here, here, and here.

A college degree is a major investment in a better economic future, high school students are constantly told. But that isn’t always true. More than a quarter of college majors produce a negative return on investment, according to a study by Preston Cooper at the Foundation for Research on Economic Opportunity. 

A lot of studies have shown that STEM and business degrees pay better over a career than degrees such as psychology and education. (Here’s one Georgetown University did a few years ago.) 

Cooper’s study adds real value to the debate by ranking degrees based on the financial return on the student’s investment, not just lifetime earnings. Many studies simply point out that earning a degree leads to X average lifetime earnings. But getting the degree is costly, and that includes opportunity costs (foregone earnings while in school and in a career that didn’t require a college degree). Those costs have to be subtracted from the future earnings to get an accurate understanding of a degree’s value. 

Cooper also creates a searchable database that lets students compare nearly 30,000 degree programs at 1,775 colleges and universities. There’s a real difference in value not just among degrees, but among the same degree at different institutions, and this study explores that in detail. 

“The analysis reveals that a student’s choice of program is perhaps the most important financial decision he or she will ever make,” Cooper writes. “Most bachelor’s degree programs in engineering, computer science, economics, and nursing increase lifetime earnings by $500,000 or more, even after subtracting the costs of college. But most programs in fields such as art, music, philosophy, religion, and psychology leave students financially worse off than if they had never gone to college at all.”

Among the findings: 

• For students who graduate on time, the median bachelor’s degree has a net ROI of $306,000. But some degrees are worth millions of dollars, while others have no net financial value at all.
• After accounting for the risk of dropping out, ROI for the median bachelor’s degree drops to $129,000. Over a quarter of programs have negative ROI.
• College rankings like the U.S. News and World Report emphasize choice of institution. But from a financial perspective, choice of major is the more important consideration. Major alone explains nearly half the variation in ROI. Students will have a much greater chance of financial success if they study engineering, computer science, nursing, or economics, rather than art, music, religion, psychology, or education.
• Thirty-seven percent of programs do not deliver a financial return when adjusting for spending and completion. Another 32% have a lifetime ROI below $250,000.
• Assuming students graduate in four years, 16% of college degrees have a negative return on investment. But many students take five or six years to graduate. Adjusting for actual completion times, 28% of degrees are found to have a negative return.
• Programs at the most expensive schools (those with net tuition above $12,700) have a median completion-adjusted ROI of $198,000, compared to $129,000 for all programs. On average, the higher payoff from more expensive schools is enough to make the heftier tuition bill worth it.
• Though elite colleges dominate the list of top programs in the country, attending an elite school is no golden ticket. Over 100 programs at colleges with an acceptance rate below 20% have negative ROI. Several U.S. News juggernauts such as Harvard, Penn, and Chicago all offer at least one program that leaves its students financially worse off.
• At Harvard University, students who major in ethnic and gender studies can expect an ROI of negative $47,000. The film and photographic arts program at the University of Pennsylvania has an ROI of negative $140,000. Seventeen different programs at New York University have negative ROI, with the worst among them (music) leaving students over $500,000 in the hole.

Another blow to the argument for “free college” 

The study’s findings can be added to the list of reasons why “free college” for all is a bad idea. 

First, most degrees pay for themselves many times over, so there’s no need for the government to subsidize them. 

One might argue that the government should subsidize degrees such as psychology and education that produce a low or even negative financial return because they are valuable to society as a whole. 

But that assumes that the content of those programs is inherently valuable, when it might be the case that the programs struggle to produce larger returns because they are poor programs. 

The study finds that some education and psychology degrees produce large returns, though the median program produces poor returns. That suggests that some programs are of much higher quality than others. Subsidizing all degrees in a particular field would provide taxpayer support for mediocre and poor programs, preventing market incentives from improving those programs.

A better option would be to provide prospective students with data on long-term earnings for various programs. Over time, that would lead to improvements in the lower-performing programs, whereas government subsidies would provide those programs with steady cashflows regardless of their performance. 

A quick look at UNH

How does the University of New Hampshire stack up? Here’s a look at two majors, Animal Sciences and Business Administration. UNH generally ranks well on longer-term earnings vs. other public universities in the region. 

The median earnings for an Animal Sciences major at age 45 are $64,076 at UNH, $54,423 at the University of Connecticut, $53,112 at the University of Rhode Island, $54,643 at the University of Vermont, $61,251 at the University of Maine, and $55,160 at UMass-Amherst. (But they’re $88,314 at Auburn University.)

The median earnings for a Business Administration major at age 45 are $101,903 at UNH, $124,785 at Boston University, $88,364 at Granite State College, $74,587 at Keene State College, $77,070 at New England College, $112,671 at New England College of Business and Finance, $100,237 at New England Institute of Technology, $131,372 at Northeastern University, $74,488 at Plymouth State University, $97,549 at Southern New Hampshire University, $85,514 at Suffolk University, $101,943 at the University of Connecticut, $72,660 at the University of Maine, $78,154 at the University of Hartford, $108,619 at UMass-Amherst, $73,692 at the University of New England, $95,622 at the University of Rhode Island, and $92,148 at the University of Vermont.

Below are the earnings at ages 25, 35, and 45 for all UNH majors covered in the study. 

You can search the database here (about halfway down the page).