01/21/2011 05:36 pm ET | Updated May 25, 2011

'Return On Educational Investment': Research Says More Efficient Spending Needed

U.S. based think tank Center for American Progress recently released a report evaluating the correlation between education spending and student performance in U.S. schools.

The report, "Return on Educational Investment," used data from over 9,000 school districts across the country to assess productivity and efficiency. Data comparing student math and reading test results were compared to district spending.

According to the center's CEO and president John Podesta, the results are "striking." Education Week reports that the study concluded that there are gaping productivity gaps between districts and there is little proof that higher spending will equal greater student performance.

More than a million students across the country attend schools in districts labeled "highly inefficient."

The goals of the report were focused on evaluation and policy recommendations for lawmakers and school administrators.

Researchers wrote,

"Our aims for this project, then, are threefold. First, we hope to kick-start a national conversation about educational productivity. Second, we want to identify districts that generate higher-than-average achievement per dollar spent, demonstrate how productivity varies widely within states, and encourage efforts to study highly productive districts. Third -- and most important -- we want to encourage states and districts to embrace approaches that make it easier to create and sustain educational efficiencies.

According to the study, U.S. expenditure per student, adjusted for inflation, has nearly tripled over the past four decades. Despite increased funding, overall student performance and achievement has remained the same. As the U.S. struggles to compete with increasing global education performance competition, efficiency in spending is a rising concern.

Cost-effective education policies, which take into consideration student performance while striving for more efficient spending, are a growing trend in education reform. Adjusting for increasing budget cuts in all levels, school administrators are considering new options to boost student performance.

In the face of budget pressures, more schools are increasing class size, making parents and administrators nervous about how larger class sizes will effect student performance.

Former D.C. Schools Chancellor Michelle Rhee believes increasing class sizes is not the issue. Determining teacher quality is the key, she says. Quality teachers can successfully handle bigger classes.

NPR reports,

"The way that I think would make sense is to identify the most highly effective teachers in a particular district, and think about assigning a few more students to each of their classrooms," Rhee says.

Not everyone agrees that effective teaching is enough to counter the effects of bigger class sizes.

According to NPR,

Randi Weingarten, head of the American Federation of Teachers, says that "if somebody says they want to raise class size, they're doing it because they want to cut the budget, not because it's actually going to help children." Many teachers say its common sense: larger classes mean students get less one-one-one attention, and the teacher has more work. And Weingarten says, plenty of parents agree.

While the report finds little connection between spending and performance in most districts, it acknowledges socioeconomic disparities. Poor students are 12 percent more likely to be in school in the least-productive and lowest-spending districts and minorities students are twice as likely to attend inefficient schools.

The report says,

To be sure, our nation's system of financing schools is unfair. Low-income and minority students are far more likely to attend schools that don't receive their fair share of federal, state, and local dollars.

To apply the lessons from the report, Podesta believes efficiency must be combined with fairness. Proper evaluation of spending and alternative solutions, such as increasing class sizes and teacher quality, should be considered.

To increase U.S. schools return on educational investments, the report states "transforming our schools will demand both real resources and real reform."

See how your district ranks in education productive on the report's interactive map.

Read the full report on