Race to the Top Funds and State Spending on Student Assessments

A recently released study by the Government Accountability Office (GAO) suggests that states have been spending increasingly more money – over $640 million in 2007-08 – on creating and implementing academic assessment tests associated with the No Child Left Behind Act (NCLB). While some federal funds have gone to support these efforts, states have provided most of the funds in the past. The findings from this report have particularly important implications now that Education Secretary Duncan has allocated $350 million of the $4.35 billion for Race to the Top grants for improving standards and assessments and 46 states have joined the effort to develop a common core of standards.

The GAO study found that while states spent anywhere from $500,000 to $83 million on state assessments in 2007-08, the majority of these funds went to outside vendors that developed, administered, scored, and reported the results of the tests. A much smaller fraction of the costs cover salaries for state employees that participate in assessment production. Additionally, it appears that test development, as opposed to scoring or administration, was the most costly part of the process. Due to the fixed nature of costs for test development, smaller states found it particularly difficult to cover these expenses.

The increasing cost of developing and scoring assessments has also led many states to implement simpler and more cost-effective multiple choice tests instead of open response tests. In fact, although five states have changed their assessments to include more open response items in both reading and math since 2002, 11 and 13 states have removed open items from their reading and math tests, respectively over the same time period. States also reported that they favor multiple choice tests because they allow for faster turnaround time for score reporting.

This reliance on multiple choice tests has forced states to limit the content and complexity of what they test. In fact, some states develop academic standards for testing separately from standards for instruction, which are often un-testable in a multiple choice system. As a result, state NCLB assessments tend to test and measure memorization of facts and basic skills rather than complex cognitive abilities.

All of these findings have important implications as the Department of Education moves forward with distributing Race to the Top grants. As mentioned above, Secretary Duncan has dedicated $350 million to improving assessments and standards contingent on each state’s participation in the NGA/CCSSO Common Core State Standards Initiative. These funds can be used to develop rigorous standards and assessments by which to measure student achievement against those standards. Once the common core standards are finalized and states begin to adopt them, it is expected that many of the states will collaborate to build one assessment system.

While state collaboration will by itself cut down on costs, an additional $350 million in federal funds will dramatically reduce the amount of state funds need to cover assessment costs. This is especially true given that the $350 million will account for more than half of what states spent in 2007-08.

However, the new assessments associated with the common standards are unlikely to be the simple, multiple choice tests currently employed. In fact, the Obama administration has stressed the value of open response testing which allows assessments to measure more complex tasks. Open response tests are particularly expensive to score because it must be done by hand. As a result, the increased cost associated with scoring these more complex tests may overcome any savings resulting from state collaboration.

States that receive Race to the Top (RttT) grants for assessments will surely benefit from the extra one-time funds, but they may be signing up for increased costs long after the RttT funds run out due to more complicated scoring needs. Hopefully, these new and improved standards and assessments will result in enough academic improvement to make up for the difference.