If an investment yields stagnant or negative returns despite increased funding, the rational thing to do is back off. This logic rarely applies in government, but we're in a unique moment. The U.S. Department of Education -- which has long exemplified the sunk-cost fallacy with past investments motivating continued spending -- faces possible closure as the Trump administration pushes to devolve education back to the states.
First, let's be clear: The department traditionally funds only 8% to 10% of K-12 education, and new Secretary of Education Linda McMahon seems rightly concerned that not enough of that money goes toward actual instruction. The Trump administration first moved to cut half of the department's bureaucratic jobs and may now attempt to eliminate it altogether. Officials also pledge to maintain the "services, programs and benefits on which Americans rely" while key funding is brought "closer to states, localities, and more importantly, students."
Doing more with less may be possible. Here's why.
An investor would notice that since its 1979 establishment, the Education Department's budget has ballooned from $14 billion to around $100 billion. That's more than its spending from 1980 to 1985. Similar increases have occurred at the state and local levels, which provide over 90% of K-12 funding. In 1980, total per-pupil spending (from local, state, and federal sources) was around $9,000 in today's dollars. Today that figure is $17,277, with $2,400 coming from federal funding.
The biggest question, of course, is what the investment is delivering. The department was originally created to raise educational standards, promote equity and improve national competitiveness. After all that time and money, have we seen much progress? Not really.
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International rankings show a mediocre performance compared to other countries that spend much less than we do per student. Fairly recent data from the Programme for International Student Assessment placed the United States at 16th in science, ninth in reading, and 34th in mathematics -- trailing nations that spend less but operate with decentralized, market-driven education systems. This is a sharp decline compared to the 1970s, when America was among the top performers.
At home, things aren't any better. The Education Department's defenders argue that federal involvement is necessary to close educational gaps, but data suggests otherwise. Functional illiteracy rates, for example, have not changed much since 1979 and remain as high as 20% by some measures. Since the late 1970s, eighth-grade reading and math scores have remained virtually unchanged, showing no meaningful progress. High school seniors' math scores have barely improved. Gains have been made in third-grade math, but these disappear by middle school.
Worse, lower-performing students have suffered the most. In 2024, 40% of fourth graders and 33% of eighth graders scored below the National Center for Education Statistics' basic reading level -- an alarming failure for a system meant to ensure foundational literacy. The department hasn't just failed to close gaps; it's seen them widen.
Pandemic-era school closures further cemented its ineffectiveness. Under Education Department guidance, public schools remained shuttered far longer than necessary, prioritizing teachers' unions over students. The consequences were disastrous, particularly for low-income and minority students. Studies show that the average student lost over half a year of learning in math and a quarter of a year in reading. These gaps haven't closed, leaving the most vulnerable students even further behind.
Despite these failures, the department continued to grow as policymakers refused to acknowledge that more money isn't the answer. And while it foots a relatively small share of the K-12 bill, it wields disproportionate influence through mandates and regulations.
Complying diverts state and local resources away from actual teaching. For instance, the No Child Left Behind Act and Every Student Succeeds Act entrenched a rigid, test-driven education model that discourages innovation and forces teachers to spend too much time worrying about bureaucratic mandates.
A look at the education workforce illustrates the trend. In 1960, teachers comprised 64.8% of public education employees. By 1980, that share had fallen to 52.4%, and by 2022, it hit an all-time low of 47.5%. More education dollars are funding more bureaucrats, underscoring a failure of top-down governance. By and large, these expensive administrators and compliance officers are not improving student outcomes.
A system that prioritizes paperwork and consultants over classroom instruction is destined, even designed, to fail. You wouldn't know any of this by listening to the fearmongering among those opposed to scaling down a department which has served children poorly for four decades. It's time for a new approach that empowers states and local communities to focus on teaching instead of one-size-fits-all mandates.
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