Welcome to the Profit of Education website. Continuing the conversation begun in the book Profit of Education, we discuss the latest economic evidence on education reform.

How do you pay teachers $125,000 a year without busting the budget?

Monday I reported that The Equity Project’s plan to pay teachers $125,000 a year has produced remarkable student gains. Today I’ll combine information from Mathematica’s report with other data to give you an idea how TEP manages high salaries without busting the budget.

First thing–comparable teacher salaries in New York outside TEP are around $75,000. (Salaries are high in New York. Of course, New York is an expensive place to live.) So TEP teachers earn roughly two-thirds more than their counterparts.

Here are the cost-saving biggies:

  1. TEP classes are 15 percent larger than classes in typical middle schools in New York, about 31 students versus 27. This means TEP hires fewer teachers per student.
  2. Teachers work longer hours than elsewhere. TEP teachers take care of most of the administrative duties in the school. The assistant principal is a teacher wearing a second hat. Other teachers wear second hats as specialists in math or language or special ed coordinator. Attendance, lunch, and parent involvement are all handled by teachers. Handling extended-day activities is part of regular teaching duties.
  3. While TEP contributes to insurance coverage and a retirement plan, benefits are a notably lower fraction of compensation than would be seen in most schools. TEP benefits cost in the range of 8 to 13 of salary. In the typical school, benefits are 35 percent of salaries. (More like 42 percent in New York state.)

TEP uses a few other tweaks. Teachers aren’t paid extra for professional development activities (most of which are done in-house). Educational consultants aren’t hired. Teachers who mentor other teachers also teach full loads.

TEP does not fund raise to support operating expenses, although they do have a capital campaign in hopes of getting a building to get themselves out of portable classrooms. Contributions and private grants amount to $75 per student.

In sum, TEP has produced a financially scalable model.

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