The Economics of a K12 Education

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Sonlight offers K12 curriculum as well as Economics. I wish more people would study economics. It seems like we often miss the bigger picture. Take the popular K12 movement as an example. After reading about K12's lackluster performance, I dug more. The New York Times ran a piece about the high costs and low benefits of K12's publicly funded school option. The K12 companies can rake in more than $210,000 from a single class after paying the teacher a measly $45,000.

"How unjust!" The comments abound. "Those slimy for-profit educators are gaming the system!"

But read on. K12 takes upwards of $6,000 of tax payer money per pupil. But that's only 60% of the cost of a traditional public school. Your local school charges tax payers $10,000 a kid. If you accept the report by the CATO Institute, this cost could be much higher. Compared to that, homeschooling is super cost effective!

How did prices get so high? How could a for-profit company get away charging such outrageous sums?

Because the money is coming from taxes. It's "free" money. And, comparatively, the government is "saving" oodles of cash. Not once did I see a single mention of how much tax money we spend on public education. Not once did a person scratch their head and say, "If this is so absurd, where's the money for government schools going? Because it's not going to teachers there either."

Dollars

Imagine if, instead of shelling out ridiculous sums of money, the government had financial accountability for what it spends. No wonder entities like K12 burn through cash... they don't have to earn it! The problem here isn't the for-profit nature of K12. The problem is that, economically, the money doesn't flow properly. There's little incentive to spend less when the money is taken instead of earned through excellent service and exceptional products.

What economic principles do you see glossed over or often forgotten?

 ~Luke Holzmann
Filmmaker, Writer, Empty Nester

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3 Comments

  1. If a man won't work, he will not eat.
    :-)

  2. Pingback: Choosing Your Investments | Sonlight Blog