US, Denver and Charter Schools

The US spends more than any other country on K12 education i.e., preschool to 12th grade and has one of the best education systems in the world. Both K12 and higher education remains one of the most contentious issues in America. Today America has a trillion-dollar student debt problem and to make matters worse K12 teachers in the US are usually burdened with education loans and mediocre pay. This article is a build-up to my paper while pursuing an education in the US and attempts to highlight the Denver success story, primarily through charter schools. Further additions include the present status of the charter school program in Denver.

 

 

# Charter Schools Vs Public Schools 

To make education more impactful, the US diversifies schools, based on the type of funding, governing & regulatory structure, and pedagogy. Schools which receive funding from local, state or federal government are under the umbrella of the public-school system although federal funding never exceeds 9% of traditional funding for public schools.

 

“Charter Schools help minority and low income students disproportionately even more”

Charter and Innovation schools are part of the public-school system except that they are much more autonomous compared to conventional public schools. Charter Schools are free for enrolled students but have an autonomous jurisdiction of private schools to customize curriculum, mandate their regulations for teacher recruitment and training, etc. Charter Schools have measured success in the US with states like New Orléans and Denver showing incredible results. This story is about Denver Public Schools.

 

# Denver Turnaround

 

Denver, an outlier, is a beacon for the US K12 education system considering its magnificent turnaround story. Part of the article is from one of my papers at public policy school. Denver is the capital of Colorado state, one of the most beautiful and majestic states in the US. Known for its breath-taking landscape consisting of wondrous mountains, pristine plateau, and fantastic people, Colorado is a must-visit place in the US. Denver Public Schools (DPS) also known as Denver County School District No. 1 in the public-school system in the city of Denver, Colorado, United States. ‘It’s committed to meeting the educational needs of every student with great schools in every neighborhood. DPS goal is to give every child in Denver with rigorous, enriching educational opportunities from preschool through high school graduation. DPS is composed of more than 200 schools, including traditional, magnet, charter and pathways schools, with a current total enrollment of more than 91,000 students. Of those, 56.1% of the school ‘district’s enrollment is Hispanic, 22.6% is Caucasian, and 13.8% is African American. Additionally, 69% of our students qualify for free and reduced lunch. DPS has about 92,000 students with a total of DPS graduates has grown from 2,655 in 2006 to 3,608 in 2014 under the leadership of Superintendent Tom Boasberg. The Denver Public Schools Board of Education had a budget of $911M for the year 2015-2016.

 

Today Denver is one of the best-performing systems of schools in the United States. Denver has received national recognition for its exceptional leadership development programs for teachers, school leaders, and principal supervisors; its school choice program (ranked number one nationally among major school districts by the Brookings Institution); its collaboration among district-run and charter schools; and its creation of promising new schools. The turnaround of Denver was due to the reasonable use of a portfolio of public schools like charter schools, innovation schools, and magnet schools to serve students with differential education needs and skill-sets.

 

The strategy to focus on the portfolio of educational institutes under the leadership of Michael Bennet and later under Tom Boasberg helped transform Denver from a below-average educational system of schools to one of the best-performing systems in the United States. The turnaround for Denver started in 2005 when 31000 out of 98000 seats were empty with many school buildings empty. Under the leadership of Bennet, pay for performance for teachers was implemented, more support from business and communities was encouraged. Bennet encouraged a portfolio strategy to revive the fledgling public school system through a collaborative model. The model, A+ Denver, works on a collaboration of civic leaders, chaired by two former mayors, to push for change and support the board when it promoted reform.

Further, FDPS implemented the School Performance Framework (SPF). The framework measures academic growth, test scores, enrolment rates as forms of evaluation parameters for schools and limited funding to a weighted student-based budgeting system to make schools accountable for ‘student’s performance through funding. A lot of emphases focus on closing non-performing schools with a renewed thrust on charter and innovation schools. Over the years Denver implemented a unified enrolment system based on a point grade system decided by a computer algorithm, and last year about 24,998 students participated in the school choice program. This remarkable feature is useful in the selection of students from across Denver to schools of their choice based on merits to remove favoritism. Denver also offers neighborhood schools opportunity; the school choice program has 11 enrollment zones giving an option to parents to schools although they might not be the vicinity. Few features include schools allocating 40% of seats to low-income students as well as offer free bus service. Left pic source: https://www.dpsk12.org/

“Eighty-three percent of students entering kindergarten got into their first choice school, as did 74 percent of                                                         students entering a sixth grade and 77 percent of students entering ninth grade.” Chalkbeat

The reforms had a startling effect on the public schools in Denver. In 2005-2006 11.1% dropped out of schools while this figure had reduced to 4.5% by 2014-2015 with 62% graduated on time including 72% who stayed at a high school who entered DPS high school and stayed for four years. Although only 48 percent of DPS graduates enrolled in college 1 in 7 low-income students registered in Denver compared to 1 in 20 nationally. DSST, one of the most successful charter networks reserves 40 percent of the seats for low-income students helping immensely in educating the unprivileged section of students.2

DPS focus on charter schools paid off with students showing measurable improvements in math, writing and comparatively less significant gain in reading. DPS also drafted a state-wise Innovation Schools Act to give innovation schools autonomy like charter schools apart from clear perspectives on performance, clear vision, and strategies. This helped Denver with a variety of schools serving all aspects of students. Increasing salaries and quality of teachers helped a lot in improving the holistic development of students while emphasizing needs of special students.

                                          “Denver is the highest scoring large district in 2015 & 2016 ECCI report.”

The proactive reforms transformed Denver as one of the best educational school systems in the United States with increased autonomy to schools to deliver superlative academic results. Denver featured at second place at 80 points next to New Orleans as the top-scoring county/city in the 2015 ECCI rankings. Denver topped in 2016 rankings for top district as well. Denver effectively transited to an advanced schooling system by increasing enrollment at alternative schools and easing enrollment application with flexibility to compare schools based on specific parameters.

City/County Letter Grade Score** Letter Grade Score
New Orleans, LA (Recovery District) A 81
Denver, CO A 80
New York, NY A- 73
Newark, NJ B+ 70
Washington, DC B+ 68
Houston ISD, TX B 66
Pinellas County, FL B 65
Boston, MA B 63
Baltimore, MD B 61
Tucson, AZ B 60

# Drawbacks and Policy Changes

One of the drawbacks of this system is to promote and focus on students who are excel academically for better ratings while debarring students who perform below average. The inflexible grade of measuring success has not gone well with parents, which prompted Denver school to revise its rigid criteria for measuring student success.

Another critical initiative would be to make quantitative oriented subjects cool with students early on in life. The US still lags in churning out Science, Technology, and Mathematics graduates compared to peers around the world. To address this issue, introduce more active and experimental learning during the formative years in life.

To make teachers pay across America market-driven inline with academic qualifications. The performance pay must be bench-marked across a mix of qualitative and quantitative parameters. The payments for loans for teachers can be subsidized with a fixed below market rate repayment spread out over a long term. Further, the loan must have provisions of removing part of principal  for those who pursue a career in education after a predetermined period.

Further, school systems must encourage specialized teaching and customized pedagogy for students who either under-perform academically or have a disability. This initiative would mitigate funding problems for charter schools, wherein funds focus on students’ performance merits.

 

 

 

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Clear Thinking About Share Repurchase

“A golden rule, companies must only repurchase its stock if the stock price is trading below its intrinsic value and there are no better investment opportunities available.”

As a follow up to my previous article, Clear Thinking about Share Repurchase by Mauboussin of Legg Mason is a great read on how and why stock repurchases replaced dividends as a major form of shareholder return in the US. Continue reading “Clear Thinking About Share Repurchase”

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True Grit: Tinkesh and Fitness

Recently uploaded a video of my interview with Tinkesh on Twitter. I met Tinkesh at a gym in Pune and got impressed by his calm demeanor and true grit. In spite of adversity, he followed his childhood dream to become a fitness trainer through sheer determination. Tinkesh was electrocuted when he was a kid and lost both his legs and one arm. Over the course of his life, people helped him in his endeavor. A nonprofit, Aditya Mehta Foundation, sponsored his prosthesis for both limbs and Tinkesh successfully ran 10K and 5K long distance runs with Maj D. P. Singh “the Blade Runner” from India. Tinkesh follows a strict diet and strength training regime to keep fit. I spoke with him at my house in Pune, India.

 

Continue reading “True Grit: Tinkesh and Fitness”

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Wrong Choice of Words; Queen: Under Pressure

In my earlier article on Jerome Powell and the FED, I wrote “when recession hits the US”. Wrong choice of words.  I meant if recession does hit the US in near future or in case of a prolonged global slowdown. EU has been a worry and if forecasts are to be believed, a growth of 1.5% at best and core inflation between 1 to 1.5% leaves real growth hovering close to zero.

Under Pressure is an epic song by one of the greatest rock bands of all time, Queen. Remember We Will Rock You. A song re-sung by so many bands and an ever green crowd favorite around the world.

And Freddie Mercury, not to be confused with the hideous Freddy from A Nightmare on Elm Street. Its nappy time in India and Freddy might just come in your dreams. Leave you with Under Pressure, one of my all-time favorites. To one of the greatest rock stars of all time, Freddie Mercury. Watch Bohemain Rashbody, the biographical movie on the rock band Queen. Rami Malek, well done.

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Man of the Year: Jerome Powell

2018, Man of the year, goes to the FED chairman Jerome Powell. Sorry, it’s not Bradley Cooper and in fact, I am yet to watch A Star is Born. In spite of unwanted criticism, Jerome Powell is a hero. When he got nominated as FED chief I was a bit skeptical. FED maybe is the only reserve bank which has a history of nominating chairman who does not have a Ph.D. Jerome following Alan Greenspan footsteps does not have one. At the same time, Mr. Powell outshines as a leader for his outstanding vision, tenacity, fortitude, and acumen in guiding the US economy through uncharted waters in 2018. He has been spot on increasing rates to not only stem inflation but also to give space for monetary flexibility once the recession hits the United States in near future. US today has one of the lowest unemployment rates thanks to sustained innovation and prolonged low rates and along with rising wage growth, fueling inflation in the US to 2%. Back it up with a 24% increase in earnings in 350 S&P 500 companies compared to the previous year beating analyst forecast of 20%, according to WSJ. All are telltale signs of an economy heating up due to low lending rates and increased consumer spending. Continuing real negative interest rates would have further fueled asset prices resulting in an imminent collapse fulfilling the doomsday prophecy. Continue reading “Man of the Year: Jerome Powell”

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Exchange Traded Funds: Rise of Passive Investing…Series Begins

This article has first posted here on July, 18 2017. The present article includes updates on how the ETF market size has increased over the years. The article has been elaborated with videos etc.

ETF also known as Exchange Traded Funds are on a meteoric rise globally. According to a report by PWC, ETF’s in the US is going to grow to $5.9T by 2021, a whopping 23% cumulative annual growth compared to $1.6T in Europe and $560B in Asia. ETF’s are passive investment products which track an index. Exchange Traded Funds are linked to different asset classes like equities and commodities. In the US, S&P 500 would be a broad equity index so an ETF linked to S&P 500 would replicate this index. Replication here means it would track the index. ETF would not outperform the underlying index i.e. S&P 500 but rather deliver similar returns. Let’s understand a few concepts here.

Alpha means outperforming the underlying index. Mutual funds form a collective pool of underlying assets benchmarked to various indices; aim to outperform the benchmark. Example, Equity mutual funds in the US, benchmark equity indices like NASDAQ, S&P 500. An investor pays a fund management fees to the fund house to deliver superior returns compared to the market. If S&P 500 delivers a return of 10% a year, an open-ended mutual fund linked to S&P 500 is expected to return a rate higher than 10%. Hypothetically if the fund returns a 15% return, the fund has an alpha of 5% i.e. the excess return compared to the benchmark index. There are many ways to measure superior return, usually, known as a risk-adjusted return. Risk-Adjusted Returns are the Sharpe Ratio, Treynor Ratio etc. You could refer tutorials to understand the ratios. One key measure to calculate risk-adjusted return is to understand a term known as Beta. Continue reading “Exchange Traded Funds: Rise of Passive Investing…Series Begins”

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Winning Strategies For Parents: Do you have one…

winning-strategies-for-parents-original-imaf6bbz59zcpyzkI have known Gayatri for sometime and when I came  to know about her new book, titled Winning Strategies For Parents, I knew I had to read it although I am a bachelor. To begin with, Winning Strategies For Parents , is a very detailed, insightful, comprehensive and hands on work on parenting your children until preschool.
Gayatri is brilliant in her research and her book, serves as a primer for parents in guiding them through the nuances of child’s development.  I learnt different preschool philosophies governing children and the role they play in transforming children over the years. Born and bred on Montessori pedagogy as a preschooler, the book gives an excellent overview of other philosophies esp. importance of music and art in Waldorf teachings while the emphasis on parental involvement in Reggio Emilia. Its heartening to know that many preschool philosophies encourage creativity and collaboration right from the preschool stage which leads to a more holistic development of an individual as compared to philosophies which encourage undue peer competition. The book is serious read and best be read over a period of few days to in-digest the plethora of qualitative information on child’s development.
Gayatri, artistically articulates journey of child’s development with key milestones, obstacles and proposes profound strategies to overcome bottlenecks for a win win relationship between children, parents and education system.”
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