75 percent of America's school districts expect to cut teaching jobs in the 2010-11 year

School districts have used federal economic-stimulus money to help ameliorate the effects of the economic recession and keep their teaching staffs employed, even as their overall budgets decreased. But the looming end of that funding means 75 percent of the nation’s school districts expect to cut teaching jobs in the 2010-11 school year, according to a report published today by the Center on Education Policy.

The Washington-based center took at look at how school districts have spent money from the American Recovery and Reinvestment Act, the economic-stimulus law passed by Congress last year. The law is sending about $100 billion to education over two years.

“Education was buffered to a degree [by the stimulus], but even being buffered, school districts were reporting they had to lay off teachers and cut back on spending for textbooks and professional development,” Jack Jennings, CEP's president, said in an interview.

The report is the second installment in a three-year research project the nonprofit research and policy group is conducting on the impact of the stimulus law. The first, released in December, found states were struggling to improve teaching quality and low-performing schools, and that their capacity to implement significant education reform was a serious problem. ("Stimulus Aid’s State-Level Impact Seen Mixed," December 3, 2009.)

The latest report finds districts used much of the funding from the State Fiscal Stabilization Fund and the supplemental boost to Title I and Individuals with Disabilities Education Act to pay for having and creating teacher and administrator jobs in the past school year.

Even with the billions in economic-stimulus dollars flowing to states and school districts, the districts reported their budgets in the 2009-10 school year were lower than in 2008-09. Districts are worried about the upcoming “funding cliff” when the stimulus funds run out; 60 percent reported when surveyed this spring that their districts had spent or expected to have spent all of the funds received by the end of the 2009-10 school year.

And the stimulus wasn’t enough to stop layoffs—45 percent of school districts reported cutting teaching jobs in the 2009-10 school year.

“The stimulus money certainly was a blessing to school districts because, without it, the situation would have been worse,” said Daniel A. Domenech, executive director of the Arlington, Va.-based American Association of School Administrators, whose group has released several reports on the stimulus’ effect on education.

However, he said, “We are not over the recession. There is still no turnaround in real estate taxes or in state sales and income taxes. There is still a shortage of money to support schools at the state and local level.” “That financial cliff is very much a reality.”

Focus on Reform

While districts spent the majority of the money on saving jobs, they also spent some of the money on making educational improvements favored by the Obama administration that were embedded in the economic-stimulus law.

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Graduate tax and private colleges at heart of new British higher education blueprint

Private universities will flourish and struggling institutions will be allowed to fail, if the coalition has its way with the future of higher education

Vince Cable Vince Cable warned that the Labour government's target of extending higher education to 50% of the population is likely to be scrapped. Photograph: Handout/Getty Images

The government signalled the biggest shakeup of Britain's universities in a generation today, with a blueprint for higher education in which the highest-earning graduates would pay extra taxes to fund degrees, private universities would flourish and struggling institutions would be allowed to fail.

Vince Cable, the cabinet minister responsible for higher education, also raised the prospect of quotas to ensure state school pupils were guaranteed places at Britain's best universities, breaking the private school stranglehold on Oxbridge.

Comparing the existing system of tuition fees to a "poll tax" that graduates paid regardless of their income, the skills secretary argued it was fairer for people to pay according to their earning power.

He said: "It surely can't be right that a teacher or care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer or surgeon or City analyst whose graduate premium is so much bigger."

Graduates earned on average £100,000 more than non-graduates in their life-time, Cable said, and there are significant premiums for degrees such as medicine.

Cable said he had asked Lord Browne, the businessman conducting a review of student finance, to look at a variable graduate tax tied to earnings. Low earners may end up paying less than they currently do for their degrees while those with high incomes pay more. A spokesman for the inquiry said Browne was not unhappy about the apparent pre-empting of his report.

The graduate tax would replace the current system, under which the government lends money to students to cover the cost of their degree courses and graduates pay this back once they start earning more than £15,000.

Phasing out tuition fees is a crucial part of Liberal Democrat education policy. Any moves by the coalition to raise fees – or even keep the status quo – could prove divisive. Lib Dem MPs will be allowed to abstain from any vote on fees under the coalition agreement.

Cable warned that the Labour government's target of extending higher education to 50% of the population was likely to be scrapped, questioning whether it was sensible or affordable. Figures from the university admissions service, Ucas, underlined the pressure on university places: universities have received more than 660,000 applications and a record 170,000 students are thought likely to be denied a place this autumn.

Cable told an audience of vice- chancellors at South Bank University in London: "What we have is an urgent problem. Universities are going to have to ask how they can do more for less. There will probably be less public funding per student … quite possibly fewer students coming straight from school to do three-year degrees." Universities had to be prepared for a period of contraction. "Britain is a poorer country than two years ago and future spending had to be adjusted accordingly."

He stunned the vice-chancellors by announcing that struggling universities would be left to go bankrupt. But he said students would still be protected. "It would be similar to banks," he said. "They can fail, but their depositors are still protected."

The government wants to increase the number of private companies offering higher education that is not subsidised by the state. This increased competition would mean some publicly funded universities could struggle to recruit enough students and be forced to close. Experts said at least 20 universities could close in the next few years if this were allowed to happen. At least five universities are known to be on an "at risk" list because they are heavily indebted.

Cable's proposals mark a departure from the current regime and the biggest change to universities since the early 1990s, when at least 40 polytechnics became universities and higher education was expanded.

He suggested that universities reserve places for pupils "from each of a wide range of schools" to ensure the brightest children from the most disadvantaged backgrounds were not denied the chance of going on to higher education. But he did not want to repeat Gordon Brown's mistake of "trying to dictate Oxbridge admissions". In 2000 Brown, who was chancellor at the time, labelled Oxford's decision to reject Laura Spence, a state school pupil, "an absolute scandal".

The Russell Group of leading research universities said Cable's graduate tax would not work. Wendy Piatt, its director general, said: "It would lead to many years before revenue from the tax became available so until then there would be a requirement for a very major upfront investment in universities by government – a very costly solution."

Million+, a lobby group for former polytechnics, questioned whether graduates paying more for their degrees squared with the government's commitment to social mobility.

However, students welcomed a graduate tax. The National Union of Students argued for a tax in its submission to Browne. Aaron Porter, NUS president, said: "The fair solution is to abolish tuition fees and ensure that graduate contributions are based on actual earnings in the real world."

The shadow universities minister, David Lammy, said: "This a PR exercise from a man whose party have just completed the biggest U-turn in their history."

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Up to a quarter of a million British students could miss out on university places

Almost a quarter of a million students will miss out on a university place after worries about the economy helped to produce a sharp rise in applications. More than 660,000 people applied for a university place this autumn, up almost 12 per cent on last year’s record-breaking figures.

There were 68,000 more applications this year compared with 2009 after growing numbers opted for education instead of trying to find a job. There was also a significant increase in applications from would-be mature students and those who missed out on places last year.

Applications from foreign candidates were also up by 15 per cent, with 100,000 overseas students seeking places, the Universities and Colleges Admissions Service said.

School leavers who would traditionally take the places could be disappointed and the University and College Union, the main lecturers’ union, warned of a “lost generation” who would miss out on higher education.

The number of places for British and European Union students is capped and vice-chancellors face fines if they exceed their limits, which will be set later this year.

Last year, 373,793 British and European students were awarded places on undergraduate courses at English universities when 592,312 had applied for places. This year 660,953 have applied, including 54,254 from outside the EU, meaning around 225,000 students, a record number, will miss out.

So far the Coalition has promised that just 8,000 extra full-time and 2,000 part-time undergraduate places will be available, mostly on maths and science courses. The overall budget for higher education is being cut by £200 million and David Willetts, the universities minister, admitted there was not the “capacity to meet such a surge in demand”.

Sally Hunt, the general secretary of the University and College Union, said: “Today’s figures make frightening reading.

“Other countries are increasing the number of graduates to compete in a high-skill knowledge economy, yet our government seems intent on doing the opposite. “It is not scaremongering to talk about a lost generation of learners. “It is disgraceful that thousands of applicants will be denied the chance to fulfil their potential at university. The decision not to fund student places properly and to make savage cuts to higher education will come back and haunt this country and will lead to a huge skills deficit.”

The rise in applications occurred despite warnings that the number of places available during clearing, where candidates are matched to spare places, could be cut by half.

Applications from older people were up more than 20 per cent on the previous year, continuing a recent growth in those wanting to become mature students.

There were around 90,000 applications from people aged 25 and over. There was also a 24 per cent rise in those who had applied in previous years, after an unprecedented squeeze on places last year.

Some subjects leading to public sector jobs proved particularly popular, despite imminent cuts in state spending. Nursing was the biggest area of growth, with a 62 per cent increase in applications, followed by design studies (34 per cent) and social work (27 per cent).

Some rejected candidates will seek places through clearing, but university chiefs have warned that the places available through that method could be half the 22,000 offered last year.

“Funding restrictions from government mean that universities will not be able to take on extra students to meet this demand,” Nicola Dandridge, the chief executive of Universities UK, said. “It is quite likely, therefore, that more qualified applicants will fail to secure places this year. Applicants may have to be more flexible in their choices.”

Prof Les Ebdon, the chairman of the university think tank million+ and vice-chancellor of the University of Bedfordshire, said: “It will be a tragic waste of talent if highly qualified students miss out on a university place in 2010. Instead of fining universities if they recruit more students than they have been allocated, the Government should now fund additional university places in 2010 if they want to be serious about their commitment to social mobility.”

The Department for Business, which oversees higher education, accepted that some candidates will miss out. A spokesman said: “The Government recognises the important role graduates play in our economy and society, which is why, in these tough times, we provided funding for a further 10,000 students to begin their studies this year. But university is not always the right option for young people.

“Demand from employers for skilled workers is rising so we are investing in further education and we are funding 50,000 new high-quality apprenticeships.”

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