Economic research typically finds huge payoffs to investments in education. For example, a recent CEA report estimated that a $1.00 investment in early childhood education produces roughly $8.60 in social benefits. And as of 2011, the college wage premium – the difference in median earnings between individuals with a bachelor’s degree and those with a high-school diploma – was around 65 percent. Unfortunately, these benefits remain unevenly distributed, in part due to substantial disparities in educational access and attainment.
Technology offers one of the most promising tools for expanding access to high-quality education, and this week marks the two-year anniversary of President Obama’s ConnectED initiative to deliver personalized, digital learning to American K-12 schools. While only two years old, ConnectED is already overachieving, and is well on its way to meet the President’s goal of connecting 99 percent of students to high-speed broadband and wireless Internet in their classrooms and libraries by 2018.
Education researchers have long believed that technology holds the potential to profoundly impact the classroom experience, from allowing students to interact with course content in new and personalized ways to helping teachers understand what lessons and techniques are most effective. By making the ever-expanding collection of educational resources available on the Internet accessible to teachers and students, technologically-equipped schools can enhance learning. And studies show that the quality of education from kindergarten through high school is a key determinant of successfully completing a college degree.
In the last eighteen months, the Federal Communications Commission (FCC) has taken a number of important steps towards realizing the President’s ConnectED goal by passing a pair of E-Rate Modernization Orders. The E-Rate program provides support to schools and libraries throughout the country to ensure that these public facilities have access to fast, affordable Internet. The FCC Orders raise the overall cap on E-Rate funding and allocate more resources to closing the “Wi-Fi gap” so that every student can access a school’s high-speed connection in their own classroom. In total, that will mean over $8 billion in available funding during a five-year window to help meet the President’s goal.
Crucially, the FCC Orders also make data on pricing of E-Rate-supported services more transparent so that schools and libraries can understand whether they are getting a good deal, and thus maximize the effectiveness of their spending.
An initial look at the newly available pricing data for 2015 E-Rate applications suggests that there are some large opportunities for savings through smart procurement. For example, in a sample of 879 contracts for a 1 Gigabit-per-second fiber-optic Internet connection, monthly prices ranged from $600 at the 10th percentile to $7,000 at the 90th percentile. And the price dispersion is even more dramatic when looking across technologies. The median monthly cost for those still using copper phone lines is $200 per megabit-per-second, compared to less than $1.50 for a fiber-optic wide-area network.
While much of this price variation reflects the cost of serving different types of institutions, it also reflects some schools’ lack of knowledge about what constitutes a good deal in the rapidly evolving market for broadband access. To demonstrate the role of price transparency in closing this knowledge gap, the non-profit organization Education Superhighway worked with a group of 15 mainly rural school districts in Virginia to share information on technology, service, and pricing. After looking at the data from their peers, five of the 15 school districts decided to seek a better deal, and were able to increase their available bandwidth by 500 percent for a 15 percent increase in expenditures. Ongoing efforts to improve the collection and sharing of E-Rate data are critical to scaling this type of intervention and applying it to communities around the country.
Ultimately, as ConnectED passes the two-year mark, we can look forward to putting more digital learning opportunities into the hands of more children, and to doing so cost-effectively. As the number of online classrooms increases, so does the size of the opportunity to develop and deploy tools that have a meaningful impact on student outcomes, with the ultimate goal of unlocking the tremendous economic benefits of increasing educational access and attainment for all of America’s school children.
Jason Furman is Chairman of the Council of Economic Advisers. Jeff Zients is Director of the National Economic Council.