Economies of scale are when a large operation can provide advantages by spreading fixed and overhead costs over a greater number of units sold, thereby reducing the per unit price. A simple concept, and one that proponents of national K-12 testing consortia made repeatedly.
One of Pioneer’s favorite expressions of this economies of scale euphoria that broke out in Washington, DC, occurred in the offices of the Thomas B. Fordham Institute in 2012 in response to a serious cost estimate Pioneer did on the Common Core (which was the first such cost estimate in the country). In that paper, the term “economies of scale” is found 13 times. Here is a quick sampling:
The Common Core also offers the possibility of new economies of scale, with promising products, services, and practices now part of a more-uniform national market…
Vendors may no longer focus disproportionately on a few large states, and niche providers can emerge as the market for their products broadens and new economies of scale become possible…
Such collaboration can both improve implementation and save money as states and districts achieve greater economies of scale…
From a cost perspective, the CCSS also afford states the opportunity to work together to develop assessment materials and procedures, taking advantage of economies of scale. The federal government has encouraged this collaboration by means of the two assessment consortia, SBAC and PARCC…
The US Department of Education believed in this economic principle when they awarded a $186 million grant to the Partnership for Assessment of Readiness for College and Careers (PARCC). To drive their point home, the USED required that PARCC and its one national competitor maintained a minimum of 15 member states (see PARCC’s Federal Application).
Just this week, with the departure of Ohio, the ever-shrinking PARCC test hit a new milestone. Originally boasting 26 participating states and DC, it now is in place (or in play) in a maximum of 7 states and DC.
Some of the remaining states are not solidly in the PARCC camp (e.g., Arkansas), and they have few students. Where PARCC once was slated to serve around 25 million (of the 31 million enrolled) public school students in the 26 original states, it now will be given to an unimpressive 5 million public school students (of the total 7.5 million enrolled in the remaining states).
That’s fewer students than in the state of California.
PARCC’s market is drying up, and Questor now lists Pearson as a “sell.” So their price point must have been affected, right? After all, we were talking about economies of scale, right?
Let’s go back to PARCC’s preliminary cost projections, which it included in its grant application in 2010. PARCC then forecast a price of $32.68 per student each year, just above the average state spending of $29.50 according to a 2012 Brookings Institution report. For a test that claims to drastically improve quality of assessment, a slight increase is palatable and makes sense.
The original cost estimate was vague and ranged from $17 on the low end, up to $50 per student on the high end. PARCC’s $32.68 estimate is conservative and doesn’t allow for teachers to score tests, has no human read behind for the year end assessment, and only applies to the electronic version of the exam. The cost for a state wishing to implement higher quality features would be closer to $50 per student.
The projected cost of the test was decreased to $29.50 per student on July 22, 2013, just as the number of member states had decreased to 19 plus Washington D.C. This estimate flies in the face of the principles of economies of scale.
On May 2, 2014, PARCC had even fewer states in its membership, and yet it released its most recent cost estimate of $23.97 per student.
With PARCC’s membership in July 2015 at a mere 7 states and DC, perhaps we will magically see it on sale at the local Dollar Store with the next estimate.
In reality, creating a test is an expensive business. According to Scott Marion, Associate Director of the National Center for the Improvement of Educational Assessment, a single multiple-choice question can cost over $1,000 to develop. Each open-ended question can cost as much as $3,000 to 5,000. Every year thousands of questions are required to administer multiple tests, at several times of the year, to nine different grade levels.
Since every state would be using the same tests, more states means the cost of developing the test would be spread out more thinly. So how can PARCC’s cost estimates fall by almost $10 per student while their membership is in free-fall?
When PARCC discusses its cost it often focuses on a state’s flexibility in choosing a scoring method as the main variable. Administrative and operational costs are also cited as important factors that are subject to change.
Only once does PARCC seem to acknowledge that the number of students is an important factor in this estimate, and it’s the final line of the press release with the most recent cost estimate. If PARCC truly understands this concept, then how can it in good conscience release a significantly lower cost estimate?
The fact that PARCC is still funded despite no longer meeting the first requirement for eligibility reflects poorly on the USED. The fact that Massachusetts continues to trust a consortium that can mismanage $186 million and has lost over three quarters of its members to test our school children when we have a higher quality alternative already in place is downright ludicrous.
It’s time to pull the burial shroud over this ill-considered effort called PARCC. Given the gobs of federal—and state—money poured into this effort, it really is time for the Education and the Workforce Committee to hold all those associated with PARCC accountable. $186 million in federal funding, an untenable test, and silence from national leadership?
And then there is the fact that Massachusetts is still holding hearings over a dead national test. Why are we wasting our time? The state’s resources would be far better used to create an MCAS 2.0. How much time and money has the Commonwealth wasted on PARCC, and how much more will be lost before state leaders come to their senses?
Scott Haller is a student at Northeastern University working at Pioneer Institute through the Co-op Program.