Private Sector Value in Elementary and Secondary Schooling

This post comes from Spend Matters' lead analyst Thomas Kase.

I recently found out that a good friend spends high five figures a year on his children's schooling -- and his two kids are barely into elementary school! I live in Georgia, ranked 48th out of 50 states in SAT scores, so my own two girls are also in private schools –-- although at far less spendy establishments.

So, what's the value for the money? Let's ignore all other benefits associated with private schools and simply define value as "getting into a brand name college." We all know that one important admissions KPI is SAT scores, and those are significantly higher at private high schools. In Georgia the state average is 1,431 for public high school students -- solidly below the nationwide average.

As background, SAT scores are designed with 1,500 as the average outcome, with a standard deviation of around 340. So if you scored over 1,840, you left 84% of your fellow test takers behind, and if you make it past 2,180, you're now in the top 2.5%. Atlanta's private high schools fall in the 1,700 to 1,800 range, with some of the more prestigious schools turning out average SAT scores above 2,000 -- so clearly the private schools produce better results on that scale.

Nationwide, in 2012, about 3.2 million students are expected to graduate from high school, a number that includes 2.9 million students from public high schools and 316,000 students from private high schools (source). To state this another way, 90 out of 100 high school graduates went to public schools.

How about the college results? The Wall Street Journal took a look at this in 2010 and found that despite the overwhelming surplus of public high school grads, about 51 percent of Georgetown University freshmen and 48 percent of freshmen at University of Pennsylvania were private school graduates.

Note the ratios above -- almost exactly 1:1 private:public distribution among their student bodies. If public and private high schools actually produced the same quality graduates, the admissions ratio should remain at 9:1. In other words, despite a much thinner stack of applications from private school grads, the thick acceptance envelopes are evenly distributed between the two piles.

No matter how you look at it, there is a massive college admissions edge by graduating from a private high school. Not that these facts are likely to sway anyone against school vouchers -- unfortunately. In the interim, I shell out for public schools (70% of local property taxes are gobbled up by this glutton) while paying for private schooling. To paraphrase the bumper stickers -- if you think the price of education is too high, imagine the cost of no education.

If not for the country in general, since all supply chains ultimately depend on the quality of their employees, we should be concerned that so much money goes toward supporting a system that under-performs the (somewhat) private education sector by such a staggeringly wide margin. Single-sourcing at its worst.

- Thomas Kase

Voices (2)

  1. Thomas Kase:

    @Dubious – I agree that reducing the question around quality of education to a single statistic is never going to be perfect.

    Note the results from admitted students at Georgetown and UPenn – I’d imagine that they draw applicants from the best schools (private or public) across the country, so the parity among admitted students show that you have a clear edge if you come from a private HS.

  2. Dubious:

    Comparing all public school SAT scores against private school SAT scores is apples & oranges. I think it’s safe to assume that those going to private schools (especially in the price ranges you state) are coming from stable, well to do, 2 parent households. If you were to compare test scores for public school students that come from the same demographic it would be a more legit comparison. The SAT scores for public schools in impoverished areas are most likely skuing the results.

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