POTUS Photo Op
President Obama introduces an E-Rate upgrade program, ConnectED. The goal? To bring high-speed Internet access to every school in the U.S. in the next five years.
It may not be his biggest promise, but President Obama has set out to outfit virtually every school in the country with high-speed Internet access in the next five years. The program, ConnectED, calls for the FCC to upgrade its E-Rate program to bring schools Internet speeds of 1 gigabit per second.
Deftly pointing out that this program needs no approval from Congress, Obama told a crowd of students at North Carolina’s Mooresville Graded School District, “We can and we will get started right away.” Obama was visiting the district to trumpet its success in providing nearly every student with a laptop.
About 80 percent of schools, with an enrollment of more than 40 million students, do not have sufficient Internet connectivity to promote learning in the digital age, according to EducationSuperHighway.org, a nonprofit group that advocates for broadband service for schools. The program’s cost may add $5 a year to telephone bills.
The president’s goal will be reached by raising E-Rate’s cap for a three-year period to about $8 billion, according to Jon Bernstein of the Bernstein Strategy Group, a lobbyist representing CoSN and ISTE. Besides increases to account for inflation, the fund’s $2.38 billion budget has remained flat since its start in 1997. “The cap was set well before there were mobile wireless devices, iPhones, and iPads,” Bernstein says.
A factor behind this new initiative is the Common Core online assessments, which begin in the 2014–15 school year. The Department of Education has put $350 million into the PARCC and Smarter Balanced consortia to develop the assessments, but many districts and schools may not be technologically equipped to administer them. If the FCC approves the plan, it’s not clear when the new funds would be available.
—Back to School 2013—
Know How:Participant Exit Strategies
Sharing all options somehow
When a plan participant separates from an employer, the Department of Labor (DOL) requires the plan sponsor, within 90 to 180 days, to provide a notice describing the participant’s benefits and how to obtain them. The particular information given to a participant varies depending on the circumstances of the separation and the participant’s age, but generally the notice must explain the participant’s right to keep his funds in the employer’s plan and what the results would be of withdrawing them.
In regard to supplying information about what a participant should do when he leaves employment, plan sponsors have a fiduciary responsibility to provide education about the options. But sponsors must ensure the information given does not cross the line to become investment advice under the Employee Retirement Income Security Act (ERISA).
If sponsors worry about inadvertently offering advice, this is understandable. However, according to a March Government Accountability Office (GAO) study, to take an overcautious approach to distribution education may be to fail the participants. In addition to being subject to inefficient rollover processes and the marketing of individual retirement accounts (IRAs), 401(k) plan participants separating from their employers may find it difficult to understand and compare distribution options, the GAO found. The information many receive is not tailored enough to their own circumstances, and it leaves them confused about what to do next. Labor regulations do not ensure that 401(k) plans provide complete and timely information to participants on all of their distribution options, the report concluded.
Therefore, the GAO recommended in its report that the DOL “ensure that participants receive complete and timely information, including enhanced disclosures, about the distribution options for their 401(k) plan savings when separating from an employer.”
This month’s “Know How” participant guide speaks to the various options participants may encounter when separating from an employer. Providing this information in an unbiased way, but at the same time encouraging participants to move forward with their retirement preparedness and decide what to do with their account balance—even if just to leave it in the retirement plan—will keep your participants on track for saving.
—Judy Faust Hartnett
What to do with your 401(k) when you leave your job
If you lose your job, leave it for another or retire, the transition can be fraught with stress. One task that is sometimes forgotten or ignored is deciding how to preserve your 401(k).
There are generally four choices to preserve the savings you have accumulated:
- Leave your account in your employer’s plan;
- Roll over your account into an individual retirement account (IRA);
- Roll over your account into your new employer’s plan; and
- Buy an annuity.
Each has its advantages and disadvantages. The tough part is determining which choice is best for you. Your decision in these matters is very individual. However, one thing is certain: Cashing out your account balance will have penalty fees and tax implications and could delay your readiness for retirement.
Once you leave an employer’s plan, the first thing to recognize is that there is no going back. You can leave your account with your former employer’s plan only if your account balance is greater than $5,000 and, in some cases, if you are no more than age 62, or retirement age. If your balance is less, or if you so choose, your plan sponsor can roll over your account to a new employer’s plan or to an IRA. With this option, there are no tax implications or penalties. If, instead, you receive a check, 20% of your account balance will be withheld for income taxes. If within 60 days you do not deposit the money into a retirement account, it will be considered a withdrawal and you will have to pay income tax. You will also have to pay a 10% withdrawal penalty if you are younger than age 55.
1) Leave your 401(k) in your employer’s plan.
- You can remain in the investments you previously selected;
- You will not incur any early withdrawal taxes or penalties;
- It will generally have lower fees than an IRA;
- There is no paperwork required to maintain your account;
- You can still roll over to another plan or IRA later; and
- If you leave employment during the year you turn 55 or after that, you can take penalty-free withdrawals from your 401(k).
- Your investment options are limited to what is offered in that plan, and you may lose some control as the employer can change investment offerings;
- The plan may not allow it if you have less than $5,000; and
- You cannot add to your account.
2) Roll over your 401(k) into an IRA.
- You will be free to choose from a wide selection of administrators and funds; and
- You can postpone taxes and avoid the 10% early withdrawal penalty.
- You have to select administrator and investment options;
- IRAs generally have higher fees than an employer-sponsored plan; and
- You usually have to complete some paperwork.
3) Roll over your 401(k) into your new employer’s 401(k) plan.
- You are present. You work for the company and can be more aware of the plan;
- The plan may have additional features or lower costs than your former 401(k);
- Having all of your 401(k)s in one place simplifies your retirement saving and can be very convenient;
- You will not have any taxes or penalties incurred; and
- This plan, generally, will have lower fees than an IRA.
- Not all plans accept rollovers. Others may have a waiting period;
- The plan may have fewer features or higher costs than your former 401(k);
- You cannot roll over company stock; and
- You are limited to the investment options in the plan.
4) Buy an annuity.
- It converts savings into a regular stream of income;
- You will avoid the 10% early withdrawal penalty; and
- You pay taxes only on the amount received.
- You need to find and select an annuity; and
- This option can have high fees.
— Judy Faust Hartnett
Know How:Avoiding 401(k) Loans
Participants may not know the potential consequences
In PLANSPONSOR’s 2012 Defined Contribution (DC) Survey, 14.4% of plan sponsors reported that their plan participants had outstanding loans. As many individuals struggle to pay their bills in the face of flat wages and high expenses, some are looking to their retirement savings for help. If they fail to repay such loans according to federal law and the requirements of their respective plans, however, they could face fees and taxes higher than the interest rate on a high-interest credit card. Participants in these plans may be unaware of these consequences.
In March, legislation was proposed to modify the rules relating to loans made from a qualified employer plan. Sponsored by Senators Bill Nelson, D-Florida, and Mike Enzi, R-Wyoming, this is the second attempt to pass a version of the Shrinking Emergency Account Losses (SEAL) Act.
If passed, this bill will allow employees to continue to contribute to their company plan during the six months following a hardship withdrawal and to receive any company matching contributions. Employees who leave their jobs will have until the time they file their federal taxes to repay their account balance, rather than the 60 days they have under current law. The intention of the proposed law is to give participants the ability to use their own retirement savings to bail themselves out.
But taking money from a 401(k)—even temporarily—runs counter to the premise of tax-deferred savings. Every day a participant’s money is not in the plan, the investable balance is reduced and the participant falls farther behind in saving for retirement. Educating participants about the consequences of borrowing or withdrawing funds is as important as encouraging them to participate in retirement savings plans.
With policymakers now considering cuts to Social Security and Medicare to reduce the federal deficit, it is essential that participants protect their retirement plan savings.
This month’s Know How explains why borrowing from a 401(k) is risky business—and offers a few alternatives.
—Judy Faust Hartnett
Are 401(k) loans robbing Peter to pay Paul?
According to the 2012 PLANSPONSOR Defined Contribution (DC) Survey, 82.5% of 401(k) plans offer participants loans. Data show that one in four U.S. workers takes advantage of this option to pay current expenses. However, drawing on your 401(k) and not repaying the loan per the agreed-upon time can put you at greater risk of descending into poverty upon retirement. Predicting what Social Security benefits await you at retirement—and the age at which you will be able to retire with full benefits—is unclear as Congress goes back and forth on this issue. But your own retirement account is within your control.
Why Tap Your 401(k)?
Borrowing from your 401(k) is much easier than getting a bank loan, and it initially appears to be more cost-effective than overextending credit cards. With a 401(k) loan, repayment can be relatively seamless with payroll deductions, and you are paying yourself—not a bank—back with interest.
Do 401(k) Loans Work?
If your plan has a loan option—it is not required to—you may borrow up to half your vested account balance or $50,000, whichever is less. A minimum loan may be specified in your plan, and some plans have processing fees. Interest rates vary, but it is typically the rate that commercial banks charge or prime rate plus 1%. Loans must be paid back within five years, except for principal-residence loans, which need to be repaid within 15 years.
Are 401(k) Loans Too Good to Be True?
They can be. Money borrowed no longer earns interest; therefore, achieving your retirement goals may take longer. Although you pay yourself back with interest, that interest rate is usually lower than the average return you would earn in a diversified portfolio of investments within the retirement plan.
A loan is repaid with after-tax dollars, and retirement withdrawals will be taxed again. If you default on the loan, you will be taxed on the unpaid principal as a deemed distribution, plus need to pay an early distribution excise tax of 10% if you are younger than age 59 1/2. If a loan is outstanding during a job change, the terms of the repayment plan are void, and the loan will need to be repaid in 60 days. Money in a 401(k) plan, on the other hand, is safe from creditors.
Federal legislation has been proposed to lengthen this period but not to change the large penalties and taxes that may be assessed if the loan is not repaid on time. —JFH
Kentucky has long been a pioneer in education reform. In 1990, the state equalized funding and dramatically altered the curriculum and governance of schools. More recently, it adopted a progressive bill calling for new academic standards and a new testing system, both of which were implemented in the 2011–12 school year. These lined up quickly with the Common Core standards, putting Kentucky first in line to give tests that matched the standards.
Kentucky is also part of the Partnership for Assessment of Readiness for College and Careers (PARCC), a consortium of 23 states developing a Core-aligned assessment system, which will be ready for states to administer in the 2014–15 school year.
The first Kentucky results from 2011–12 are seen as a predictor of things to come, so when they were released on November 2, education stakeholders nationwide scrutinized them. The first reaction was a collective “uh-oh.” Elementary and middle school students scoring “proficient” in reading or math dropped by about one-third.
Expecting a backlash from educators, parents, and the media, the Kentucky DOE provided data and analysis up front, says DOE spokesperson Lisa Gross. “We’d predicted a drop in rates of up to 40 points in the gap data. The drop was not as steep, landing in the 20-to-30-point range. It still shows that there’s a lot of work needed in that area.”
Chris Minnich, executive director of the Council of Chief State School Officers, doesn’t think the results will cause states to second-guess their decision to adopt the Common Core. “I think there’s general acceptance that having national standards is the right thing to do.”
There was a less-publicized kernel of good news: a 9 percent increase in college/career readiness, and in the end, that’s the primary focus of the state’s educators.
“Kentucky has done a nice job of providing support for parents, teachers, and schools,” says Minnich. “We’ve got to make sure the right information gets into the right people’s hands, and have some of these hard conversations. Seeing lower passing rates are going to make schools feel like they haven’t gotten the job done, but they are accurately aligned with expectations for college and career success.”
Dips in the Road Ahead?
Anticipating inevitable rough patches can make for a smoother Core transition.
Scholastic Administrator, Late Fall 2012
With the shift to Common Core in full swing, analysts warn that state and district education leaders should be prepared for “implementation dips” that accompany systemic change.
All schools encounter “a dip in performance and confidence” as they move forward with innovation that requires new skills and understandings, wrote education reformer Michael Fullan in Leading in a Culture of Change, his widely read 2001 book.
Such temporary setbacks should be expected with CCSS, says Kathleen Porter-Magee, senior director of the High Quality Standards Program at the Fordham Institute, a conservative education think tank. “It would be foolish to pretend you can completely protect a school or district from some kind of an implementation dip,” she says. “It’s inevitable, but with a lot of hard work, strategic planning, and good messaging, you can minimize it.”
School leaders will need to reassure parents as well as teachers who feel threatened by Common Core changes, Porter-Magee explains. “Parents will say, ‘Last year my child was proficient, and this year [she is] below basic. What happened?’ Schools will need to thoughtfully align curriculum and instruction, and not just teach test-prep strategies” to temporarily offset a performance dip, she says. “We need to be on a long-term path to teaching kids.”
Another area of concern to teachers—coincidental with the implementation of CCSS—is the increasing focus on merit pay, which has taken hold in 42 states, according to the National Center on Performance Incentives at Vanderbilt University. With the pay of so many based in part on standardized test scores, teachers worry that they will be judged harshly if their students don’t measure up under the new standards.
Eric Lerum, of Students First, Michelle Rhee’s education advocacy organization, says this may not be a concern. “District leaders can account for fluctuations in scores, because what they are looking at is where students start and where they end. They should be able to translate what those scores are from one system to another.”
Porter-Magee adds, “The phasing in of new teacher evaluation systems and the Common Core can be done in concert. Many plans ask teachers to be part of the goal-setting process. If everybody is knowledgeable, Common Core doesn’t have to hold teachers accountable unfairly.”
From the Editor (published in District Administration magazine)
School Superintendents: How Different Do Your Schools Look This Year From Last Year?
What changes have you accomplished that will make this school year different from last? In an era of having to doing more with less, what progress have you made?
Forty-eight states and the District of Columbia have adopted the Common Core State Standards. Will there be more of an emphasis on critical-thinking skills and deeper understanding of concepts in your schools?
Thirty-two states and the District of Columbia have been granted waivers from important parts of the No Child Left Behind law. With this freedom from a focus on math and reading testing, and greater control over student achievement, will you be focusing more on science, civics, music and art?
Billions of federal dollars have gone out to schools in the form of competitive grants, at a time when states have far less money to support education. Tied to these dollars are teacher evaluations and the expansion of publicly funded charter schools. Have you moved forward even if your personal views go against these mandates?
A recent study found that one in three young adults with autism had no postsecondary education or employment in the years after graduating from high school. Is your special education staff well versed in transition planning?
Experts and top district leaders say that tying curriculum to technology will unlock a greater return on investment. But without a specific plan in place, even the greatest, latest tools won’t buy you success. Are you getting the best ROI on your technology purchases?
Last but not least, has safety gone the way of arts, music and civics? Have you and your staff devoted time to review, revise and articulate crisis-response plans?
You can find solutions to many of these issues in what I am calling our “print is not dead” issue—all 100 pages. Of course, all the content in the issue, plus much more, is available at DistrictAdministration.com.
Under the Radar
There was a time when it seemed a day didn’t go by without reading about Michelle Rhee, the former chancellor of the District of Columbia Public Schools. Rhee, known for her passion for raising student achievement—and for her aggressive style—became a symbol for the new school reform movement.
While Rhee has moved on to continue the effort founding the Students First movement in 2010, her former deputy chancellor, Kaya Henderson, has been heading up the district, first as interim chancellor and now as chancellor. Though she doesn’t have the name recognition of Rhee, we feature her this month in “Her Own Brand of Education Reform,” as she, like Rhee, is a tough advocate for reform but with a different leadership style—one that is collegiate and inclusive.
Like Henderson, the curricular subject of geography has been flying under the radar. In the mid-1990s, the National Geographic Society had led an effort to reemphasize the topic that included a 50-state alliance to promote geography in schools and even the creation of national standards. All of this was undone by NCLB and its focus on accountability.
It’s obvious now. U.S. high school seniors scored an average of 282 on a 500-point scale on the geography part of the 2010 National Assessment for Education Progress, the same score as in 2001.
The tide now is turning, thankfully, and geographical knowledge is being appreciated in the new global economy, as described in this month’s feature “Geography Ed for a Flat World.” The newly revised national standards will be released later this year.
Contact me with information about what’s under the radar in your school district at email@example.com or @judyfhartnett on Twitter, and enjoy your time off this summer!
District Administration’s Forward-Thinking Columnists
I have a monthly email communication with Elliot Soloway, a University of Michigan professor and the chair of ISTE’s Special Interest Group on Mobile Learning, who writes our Going Mobile column with Cathie Norris. Somewhere within the email thread, Soloway is sure to write words such as these: “Someone has to tell the emperor he’s naked.”
Soloway is one of seven very passionate education experts who contribute on a regular basis to DA magazine. I am proud to have their opinions appear within these pages. When asked about this passion Soloway and Norris say, “We truly believe that education is on the cusp of a transformation. Why? In the past, technology has been ignored; it can no longer be ignored. The ubiquitous, mobile technologies provide the opening, finally, to change pedagogy in America. We believe—and we are acting on that belief.”
Online Edge columnist Will Richardson is the co-founder of Powerful Learning Practice, a professional development program, as well as an author, educator and highly acclaimed education blogger. Richardson’s January 2012 column, “Are You an Old School or a Bold School?” went viral on Twitter. Richardson says, “My columns come from my experiences as a parent and my discussions with educators around the world both face to face and in the online learning networks that I am a part of.”
Rob Mancabelli’s column is our newest. Mancabelli is a speaker, writer and educator who “focuses on the key actions educators can take to promote and sustain change.” His method? “I choose the topics that people find the most challenging, often where the answers are counterintuitive and rarely implemented.” Check out his New Directions column in this issue: “The Three New Pillars of 21st-Century Learning.”
Christopher Griffin, who writes Student Counsel, is the director of guidance for the Katonah-Lewisboro (N.Y.) School District and has his doctorate in educational leadership, policy and foundations. In the September 2011 column, “Back to School After Experiencing Failure,” his description of what school looks like for those in the cycle of failure got me in the heart, as his columns often do. Griffin says, “The role of the counselor can be so critical in both the social-emotional and academic development of our students. If we want our students to be college and career ready, then we need skilled professionals who understand their stories and accompany them on their journey through adolescence.” In this issue, Griffin’s topic is bullies.
Like Christopher Griffin, Eamonn O’Donovan is a current K12 school administrator. In the past five years, he has moved from principal to director of special education to assistant superintendent of human resources. According to O’Donovan, his column’s intention “is to help school leaders reflect upon their own practice, best practices, and the art of leadership. I choose my articles based on problems or issues I see working administrators face every day.” Technology solutions for busy administrators is his topic this issue, and I am sure you will relate to the scenarios he writes about and gain from his solutions.
In his Crisis Response column, Scott Poland shares with administrators key points in current trends and key principles for crisis prevention and intervention in schools. He also provides essential information about the mental health of students. Preventing teen motor vehicle accidents is his topic this month. Scott is a school psychologist, professor and the co-director of the suicide and violence prevention office.
DA is all about offering solutions, and our seven columnists add immensely to the mix of content we offer. Comment on their articles at DistrictAdministration.com, and share them with your colleagues.
See the Future, Change the Present
We at DA keep our ears to the ground and our noses to the grindstone always looking for new stuff to keep you, our readers, well informed. Much of what we’re hearing these days points toward the growing use of predictive analysis—looking at student data and seeing where kids are going, rather than looking at where they’ve been, as is used with data-driven decision making. Sophisticated modeling software is beginning to move from the corporate world and higher education admissions to K12, and the potential is huge.
The larger promise of predictive analysis is that when correctly applied and interpreted, it will enable educators to identify more clearly what students need and to customize instruction appropriately. This has implications not simply for individual student performance, but in how educators perceive teaching, learning and assessment. By offering information in real time, predictive analysis can support quick change and raise student high school graduation and college completion rates. But there is one danger, and that is simply reducing learning to a set of numbers and optimizing across the numbers. Managing Editor Angela Pascopella explores this topic in “A Crystal Ball for Student Learning.”
Also this issue, we include the first in a series of profiles of education reformers. “Models for Education Reform” begins with a focus on Robert J. Marzano, the co-founder and CEO of Marzano Research Laboratory in Englewood, Colorado. His model is built on three critical commitments that school administrators must make to their students.
The Launch of District CIO
Recent readership studies show that DA magazine plays an essential role in informing high-level school administrators about a wide array of topical issues. In each issue, we cover current trends and pressing issues in K12 education, along with emerging technologies, leadership issues and management strategies. We have worked closely with the ed tech industry and education trailblazers to deliver in-depth and unbiased coverage of cutting edge technology that you need to be informed about in order to continually improve student achievement and administrative effi ciencies.
As technology has come to play a larger role in school districts, superintendents, business officials, curriculum directors and other senior district leaders are increasingly informing and influencing strategic decisions in how best to use technology across the district in both academic applications and district operations. Because of that, in this issue, we’re launching the first section of a topic we’ve covered for years, but not through formal identification: District CIO. In the pages of our magazine, on a monthly basis, District CIO will cover issues of special interest to all senior district-level executives from a CIO perspective. In early 2012, we’ll extend District CIO online, with a resource center on DistrictAdministration.com, enewsletters, and a series of distinguished lecture Web seminars.
In District CIO this month, among other topics, we offer input from industry experts and district leaders about the realities and challenges of cloud computing, including its impact on student computing. Given the advent of cloud computing, student-owned mobile devices and the software-as-a-service model, we ask, how much computing power and hardware do students really need today? And thank you for keeping your suggestions coming. Your feedback continues to be an essential source of content.
The Competitive Advantage
Welcome to our Annual Salary Survey section, an 11-year-old tradition! The article that accompanies the 10 charts comparing school administrators’ salaries, written by Associate Editor Marion Herbert, defends the salary levels of superintendents, comparing them to corporate CEOs’ salaries, and addresses recent proposals by some governors to cap superintendents’ salaries. I had an opportunity recently to speak with William Mayes, president of the Association of State Executives (ASE), about this topic, saying it’s “quite often a two-edged sword.” You can read more about what he had to say in this month’s Conversations interview.
We asked Contributing Writer Ron Schachter to write about the topic of academic rigor in schools today. One of the major goals of the creators of the Common Core State Standards, having been inspired by the performance of students in high-performing countries, was to increase rigor. President Obama talks about college readiness as a main priority for the reauthorization of NCLB. But in order for students to be successful in this global economy, they need to be inspired and motivated by teachers and administrators who are willing to raise the bar for all students. One such administrator is recently retired Superintendent Jerry Weast, who went beyond state and federal standards to bring a new culture of expectations to the Montgomery County (Md.) School District after analyzing National Student Clearinghouse data from 34,000 graduates and overhauling the district. His efforts made a difference, as 86 percent of ninth-graders graduated last year, versus 60 percent in 2003.
And then there are the tougher stories to tell. Anthony (Tony) Smith has been leading the Oakland (Calif.) Unified School District since July 2009 when the district was released from state control due to serious financial problems. The school board recently approved a five-year strategic plan, articulating a full-service community school district with an emphasis on caring for the whole child. Indeed, it is sorely needed, as the crime rate is horrific in the district, with 13 students murdered last year.
Student Counsel columnist Chris Griffin ends this issue with a reminder of how scary and hopeless going back to school can be for a student who struggles academically. Hopefully, new initiatives will effect positive changes for these students and keep them in school. Best wishes for a productive school year.
Technology Done Right
I like the name of Maine’s 2002 pioneering one-to-one program, the Maine Learning Technology Initiative (MLTI). It has the word “learning” in it, and that’s exactly what it takes from many players to implement the approximately 3,000 one-to-one programs across the nation and to make them successful. Anita Givens, associate commissioner of the Texas Education Agency, comments on her state’s movement, “We learned that the complete package of content, technology, professional development and support was critical.” Our technology focus this issue begins with “Lessons Learned from One-to-One” written by Susan McLester. Have these much sought after and talked about programs made a difference, or not?
One of the big lessons learned is that technology must enable learning, and not the reverse. Until recently, in many districts the tech folks and the curriculum folks were not on the same page. “Technology leaders used to be the wires-and-boxes people. They handled the technical side of the house,” says Alice Owen, executive director of technology in the Irving (Texas) Independent School District. But as budgets have been crunched and student achievement is in the forefront, all investments need to align with student learning, creating partnerships with both sides of the aisle. In “The Changing Role of the CTO,” written by Alan Dessoff, we learn how this is working for administrators.
As many of our expert sources say, there is a huge spectrum of district programs. Some are innovative, allowing students to learn using the technology to which they relate and on the topics that interest them most, and others are using computers as add-ons or word processors. And there exists an entire group of teachers who are not as easily adaptable to these programs. Cathie Norris and Elliot Soloway write about this in “When the Baby-Boomers Meet the Mobile Generation.”
Each year we have readers nominate products that have made a positive difference in their school districts, including hardware, software, books and materials, Web sites, and facilities products. At the end of the year, we announce the winners of our Readers’ Choice Top 100 Products. I invite you to go to districtadministration.com to nominate a product that you think deserves the attention of your colleagues in the district and across the nation. The deadline is Monday, September 12th.