Corinthian College Crisis

Posted on by Michael Highsmith

Everest College

At its peak Corinthian Colleges had over 100 colleges throughout the United States and Canada, including Everest College campuses in Earth City, Kansas City, and Springfield. Last month Corinthian Colleges, Inc., a large for-profit post-secondary education company, announced it would cease operations in all remaining U.S. locations effective April 27, 2015. The closure of Corinthian has left 16,000 students in quite the predicament. Many have taken on burdensome student loans, and now their school is closed.

In response, the Department of Education (DOE) announced a plan to wipe the debt slate clean for all students that attended these schools, a move that potentially could cost taxpayers $3.6 billion. Secretary of Education Arne Duncan defended the plan saying, “You’d have to be made of stone not to feel for these students.”

While I agree wholeheartedly that it is more than a minor inconvenience to have your school close, this is the wrong course of action. Indeed, this plan is wrongheaded and will simply encourage more of the behavior that created this crisis in the first place.

First, there is no need to forgive loans for courses students have already completed. They did not spend their time at Corinthian schools in vain. These students are still eligible to transfer their credits to other schools and continue their educations. Countless universities have made it clear that they want to help and are willing to open their arms to students who take the initiative to transfer credits and continue their pathway toward a better life. Long Beach City College President Eloy Oakley summed it up perfectly back in April: “They have options and no matter what, at the end of the day, we want them to finish their education, stay in the community and become economic assets to the community.”

Unfortunately, one of the catches of the DOE’s plan is that closed-school debt relief is only available to students who have not transferred their credits to another university. This bailout encourages students to throw away the years they have dedicated to attaining a degree and bettering themselves.

Second, this is potentially the largest debt relief program the government has ever offered students, and it sets a bad precedent. Taxpayers should not be held accountable for the billions of dollars students borrow in full knowledge of the consequences. Most of these students never would have attended a Corinthian College if it were not for the government’s subsidization of college loans. This bailout essentially means students bear no risk when making college selections; they can easily obtain college loans, and the government will forgive them if things go badly.

The students of the now-defunct Corinthian Colleges certainly got a raw deal, but that is no reason to enact measures that will encourage the same type of behavior in the future.

Combating the Summer Slide-A Community Effort

Posted on by Brittany Wagner

parachute

When I asked students at Confluence Academy, a charter school in Saint Louis City, the age-old question, “What are you doing this summer?” most responded with, “Chillin’.”

On the makeshift survey I had passed out to students on the last day of school, they scribbled answers such as “nothing” or “hanging out” in the blank spaces. Where I had asked, “How many hours do you plan to read this summer?” most didn’t bother, not even to write a zero. One student read the question out loud and laughed to herself. Another crinkled the paper into a ball.

“We’re in the neighborhood. We’re seeing them out unsupervised, not really having a whole lot to do,” said Beyond School Director Erin Malone.

Beyond School is one division of Mission: St. Louis, a local nonprofit in the Grove neighborhood. The organization provides fourth to eighth graders with year-round expanded learning opportunities, one of which is an eight-week summer program created to combat summer learning loss. Summer learning loss, or the “summer slide,” occurs when students from low-income communities experience little to no learning outside the academic year.

One study showed that more than half of the achievement gap between low-income and high-income students can be explained by unequal access to summer learning opportunities. Partnering with Adams Elementary, Beyond School provides low-income students with math and reading instruction, as well as access to activities such as cross-fit, improv, and musical lessons. In the fall, Beyond School will begin a new partnership with the charter school South City Prep.

While Mission: St. Louis does not charge Adams Elementary and South City Prep for its services, the partnerships serve as an example of how organizations in the public and private sector can work together to fulfill educational needs in a low-income community.

Rising seventh-grader Christian is one of 22 students currently benefiting from the summer program. I had the opportunity to listen to her read If I Grow Up, a story about the challenges a young man faces as he grows up in the projects.

“The first year I tested our students, every single one of them was behind,” said Malone, a former teacher and reading specialist. “The kids literally just need to read. They need to read books they can understand and that they can have conversations about. That’s kind of just what we do.”

On average, students gain about five months in reading proficiency during their time in the program. This means the student will advance more than 60 percent of a school year within eight weeks. Compared to no gain or sliding backward, this is quite an accomplishment.

College students, retired community members, and even off-duty teachers volunteer as tutors. “It’s a community mentality. It’s not their kids, but our kids,” said Malone, who hopes to eventually expand the program into other schools.

“If you really want to eradicate poverty, this is one of the ways,” she said.

What Should a Charter School Application Look Like?

Posted on by Brittany Wagner

In 2012, the Missouri Board of Education closed six Imagine charter schools. The Imagine network is one of the largest in the country, and at one point, it provided schooling for one-third of the charter school students in Saint Louis.

Closing these underperforming schools may not have been a bad thing, but it certainly put a bad taste in the mouths of those already fearful of the independent nature of charters. For some, Imagine’s failure justifies a long and arduous charter school application process.

While it’s true that some elements of charter school applications may keep out those who have no business educating children, a new study found that other requirements may simply create unnecessary barriers. In “The Paperwork Pile-Up: Measuring the Burden of Charter School Applications,” AEI’s Mike McShane (who will be joining the Show-Me Institute policy team in August), Jenn Hatfield, and Elizabeth English analyzed the sometimes-overwhelming elements of the charter school application process.

Paperwork-Pileup-final-1After coding requirements in applications from 40 charter authorizers, they found that authorizers could cut down the average application by at least one-third without interfering with their ability to ensure quality.

Charter school authorizers need to refocus their efforts on the regulations that are most likely to ensure quality schooling and do away with extraneous requirements that have piled up over time. Charter school applications can and should be streamlined to help authorizers focus on what they can do well and save applicants hundreds of hours of work.

In Missouri, both school districts and colleges can sponsor charters. Applicants must submit their application materials to the Department of Elementary and Secondary Education (DESE) by Oct. 1 prior to the fall opening of the school year. DESE provides a 40-page model application for sponsors based on statutory references. The application has a minimum of 23 educational, organizational, and business requirements.

“The Paperwork Pile-Up” lists common requirements for charter school applications, dividing them into three categories—green, yellow, and red. Here are a few examples from the DESE model application and statute requirements.

Green: Requirements are both appropriate and manageable.

  • Present a compelling 1-2 sentence mission statement that defines the purpose of the school.
  • Present proper documentation that the entity proposing to hold the charter is a Missouri nonprofit corporation.

Yellow: Requirements may be appropriate but onerous, or inappropriate but manageable.

  • Annual calendar for the first year of operation.
  • Include a sample lesson for a single core subject (of your choice), from two different grade levels that illustrate strategies for implementation of the curriculum consistent with the mission and education philosophy.

Red: Requirements are both inappropriate and onerous.

  • Present a thorough, realistic, and cost-effective transportation plan; and provide specific evidence of third-party readiness and terms for providing transportation services consistent with the school’s budget assumptions. Third party must collect required information (include in application).
  • A description of the charter school’s grievance procedure for parents or guardians. R.S. 160.405.1.(13)

Some burdensome requirements like those listed in the red category come from charter school authorizers, while others are codified into law. Both the Missouri Legislature and individual sponsors should review current requirements, focus on the necessary safeguards of quality, and eliminate regulations that make it impossible for Missouri charters to innovate and experiment.

To read more about cutting the red tape to unburden the charter school application process, click here.

 

Recognizing the Need to Cut Corporate Income Taxes

Posted on by Michael Rathbone

In this past session, the Missouri Legislature addressed several important policy areas. At the Show-Me Institute’s latest Policy Breakfast, Senators Bob Onder and Joseph Keaveny discussed items that the legislature approved, such as one bill that would limit traffic fines as a source of revenue for municipalities. However, the senators also discussed items that the legislature did not pass, including improvements to government transparency and funding for the Missouri Department of Transportation (MoDOT).

I was particularly pleased to hear (and not just because I was mentioned by name) Sen. Onder’s desire to rein in the state’s overly generous economic development tax credit system. Sen. Onder is right that we can completely eliminate the corporate income tax if we scaled back on the issuance of economic development tax credits in this state. Just last year, Missouri issued close to $370 million in economic development tax credits while it collected only $337 million in corporate income tax revenue.

Considering that these economic development tax credits have been found in some cases to be seriously flawed and in many cases return just cents on the dollar to taxpayers, it makes sense to cut back on issuing them and instead zero-out one of the most economically damaging taxes a state can impose. I am glad there is at least some desire to reform our tax credit system in Missouri, and I hope the legislature can address this problem next session.

Saint Louis City Hall Getting Serious About Reducing Regulation

Posted on by Joseph Miller

Tomorrow, two Saint Louis aldermen will propose a bill that will slash the city’s business regulations. The Post-Dispatch has reported that the bill will cut more than 300 pages from the city’s business code, reduce archaic categorization, and move the city’s regulatory strategy from one of preemptive control to post-hoc nuisance mitigation. These types of changes are long overdue and could go a long way toward making Saint Louis an easier place to do business.

When entrepreneurs are asked what Saint Louis can do to make itself more competitive, they often point out that navigating city regulations and obtaining business licenses is time consuming and expensive. Too often, start-ups with little capital don’t know what they need to do to start a business and ultimately face regulatory “surprises.” Making regulations understandable and affordable for entrepreneurs can make Saint Louis a place where more businesses set up and survive.

How outdated is Saint Louis’ existing code? As an example, let’s look at the city’s public petition requirements for new business licenses. In Saint Louis, attempting to set up certain types of stores, regardless of zoning, requires the majority consent of local property owners. These “petition requirements” exist to protect neighborhoods from businesses that might be nuisances. These types of businesses include: arcades, billiards and pool rooms, tattoo parlors, bed and breakfasts, pawnshops, museums, junk shops, auction places, shows, theaters, dance halls, exhibitions, used goods stores, retail liquor stores, and (my personal favorite) intelligence offices.

The first thing to point out is that this list of nuisance-creating establishments looks like it was written by the Music Man. Pool halls, arcades, and used goods stores do not seem like businesses that should require majority community approval. As for intelligence offices, that’s not referring to the National Geospatial Intelligence Agency; it’s actually an antiquated way of referring to head hunting offices or temp agencies. It’s not good for business when the city’s code is so outdated that it not only solves problems that no longer exist, but is simply difficult to understand.

Aside from being written for a different time, the very principle of petition requirements harms business formation. City zoning and nuisance ordinances already make it difficult to keep a truly community-damaging operation open. But instead of taking a hands-off approach and solving problems when they crop up, city regulations are attempts to preemptively control start-ups. In doing so, they make the city a less attractive place to set up shop.

Some city leaders finally appear ready to take a more market-friendly regulatory approach. That’s good news for Saint Louis.

Is There Accountability for Virtual Schools in the Transfer Bill?

Posted on by Brittany Wagner

In Virtual Schools Offer Students Another Option, But Questions Persist, Post-Dispatch legislative reporter Alex Stuckey discussed the virtual schools provision in the school transfer bill.

EducationHouse Bill 42 (HB 42) has sat on the governor’s desk since late May and would allow, among other reforms, students in unaccredited and provisionally accredited districts in Saint Louis and Jackson County a chance to receive a virtual or online education instead of transferring to a higher-performing brick-and-mortar school.

In addition to portraying the school transfer law as “largely unpopular” (a 2014 poll showed that 60 percent of Missourians favor the program), Stuckey didn’t present a full picture of the virtual school issue.

Take Representative Bill Burns’ comment cut from his speech during the legislative session, as quoted in the Post-Dispatch:

“This is a special interest bill,” Burns said. “This virtual education, why does it have to be a private company? Why couldn’t the school system be in charge of virtual education?”

Other education officials and lawmakers alike questioned the measure’s wording, fearing it lacked the teeth to hold for-profit virtual education programs accountable for a students’ performance, given that the district wouldn’t have the means of regulating which company is used.

These comments suggest that school districts, not taxpayers, should hold schools accountable. Isn’t school choice the best form of accountability, because parents have the ability to pick a school that fits their child’s needs? The idea that school districts should regulate a private company assumes that school districts know what’s best for kids, not parents. And, do we really want failing school districts regulating anything?

HB 42 may not be perfect, but components like the virtual schools provision may give more kids a chance to escape an antiquated system where zip code, not choice, determines educational outcomes.

 

Private Airport Screening a Viable Option for U.S. Airports

Posted on by Joseph Miller

In a recent St. Louis Business Journal article concerning the woeful performance of the TSA, the author claimed that privatization cannot be an answer to security screening in U.S. airports, like Lambert-St. Louis International. According to the author, “It doesn’t work. It never has.”

This statement is simply not true. In fact, Kansas City International Airport (MCI) has contracted for private screening through the Screening Partnership Program (SPP) for more than a decade. Under that program, the TSA sets standards for screening and selects a qualified vendor. Even compensation must match TSA standards. Kansas City is not an anomaly. In total, 21 airports, including San Francisco International Airport, use private screening.

Screening Partnership Program Map of Airports

The main reason airports opt for private screening is price. According to a report by the House Transportation & Infrastructure Committee, an airport like LAX (which uses TSA) could cut security costs by more than 40 percent if it moved to private screening. That more airports do not use private screening is largely the fault of the TSA itself, which the Government Accountability Office has consistently criticized for dragging its feet on improving and expanding SPP.

From a security standpoint, multiple studies show that private screeners do as good, or better, jobs than TSA screeners. And while we are now learning this is no high hurdle, at least a private company can lose its contract for bad performance; the same cannot be said of the TSA.

As an airport screening agency, the TSA is failing the flying public. In Saint Louis and elsewhere, perhaps it is time airport screening was privately bid out and the TSA receded to a regulatory role.

Will O’Fallon Use a Competitive Bidding Process?

Posted on by John Wright

According to the Post-Dispatch,

Construction unions are pressing the City Council to adopt a “project labor agreement” mandating union labor and other rules for the $28 million police headquarters-court facility approved by voters in April. In return, unions agree not to call strikes on the project.

While a project labor agreement that forces the city to use union labor rather than the best available bid is a bad idea in its own right, the fact that construction unions appear to be threatening a disruption in order to get exclusive access to this project is beyond the pale.

Where to begin?

Shouldn’t public works projects be awarded based on contractor qualifications and bid amounts? Doesn’t this combination get taxpayers the best value for their dollar? On the other hand, when a city adopts a constraint on a public works project that favors a certain kind of contractor for reasons other than value, isn’t that a bad sign?

I would say so. An agreement that awards contracts exclusively to unionized labor seems to be less about getting taxpayers the best deal and more about appeasing a politically active special interest group. If unionized businesses offer taxpayers in O’Fallon a better deal than non-union shops, they will win public contracts through the strength of their bids. Special treatment is unnecessary.

I don’t think anyone wants to see a slowdown on a $28 million public works project like this, but special treatment for unions trying to exercise political muscle should be non-negotiable, especially if they’re threatening to punish the city if they don’t get their way. O’Fallon should do the right thing for its taxpayers: Take bids from all parties and assess them on their merits.

$3 Million in Taxpayer Money Spent On Stadium; Still No One Has Voted

Posted on by Joseph Miller

This week, the Post-Dispatch reported that $3 million in taxpayer dollars has already been spent on a riverfront stadium project designed to keep the Rams in Saint Louis. This is up from about $1 million spent a little over a month ago. That money, which is supposed to go toward maintaining the Edward Jones Dome, is instead being spent on all aspects of the new stadium project. That includes engineering, financing, and railroad track removal. It also includes the legal fees of the attorneys suing to overturn a city ordinance that requires a public vote on funding a new stadium.

These tactics do not represent sound policymaking, but rather an attempt (by just a handful of leaders) to make an end run around deliberative processes that should precede public spending of this magnitude. Despite overwhelming economic evidence to the contrary, these leaders apparently believe that the stadium is a necessity and seem to have no qualms about spending money as quickly as possible and presenting the public with a fait accompli.

Imagine that the city ordinance is not overturned, or the Rams decide to leave regardless of the stadium plan. At that point the city and state will have spent millions designing a stadium, preparing to move tracks, and litigating with citizens. Residents will then have to choose between two options: Follow through on a new stadium (or some other grand vision) or throw all that “investment” away. Missourians should not be forced to make such a choice.

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