School Ratings–from Standard & Poor’s

Published April 1, 2001

Money is important, but what’s even more important is spending money efficiently on education programs that prepare students for lives and jobs in the new economy, according to Standard & Poor’s chief economist David A. Wyss.

“The important thing to keep in mind is that more education means more income for people and that educated populations can adjust to a changing economy better than poorly educated ones,” he added, speaking to a national assembly of state lawmakers in Savannah, Georgia, on February 17.

Standard & Poor’s is becoming increasingly interested in K-12 schools because it is pioneering a School Evaluation Service to provide administrators and policy makers with a diagnostic tool for better-informed decision-making. The service focuses on measuring the return on resources from an analysis of financial input and academic output, measured against a range of demographic and other data.

The essential components of S&P’s school evaluation are:

  • Student Results: What are the academic outcomes? e.g., test scores, attendance, and graduation rates.
  • Learning Environment: What is the scholastic context of this return? e.g., class and school sizes, staffing levels, technology, safety.
  • Expenditure: Where is the money spent?
  • Return on Resources: What is the comparative return? e.g., are student outcomes improving as spending increases?
  • Finances, Taxes, Debt: What is the financial context of this return?
  • Demographics: What is the socioeconomic context of this return?

Michigan and Pennsylvania already have signed $10 million contracts to assess each of their hundreds of school districts annually for at least the next four years.

For more information . . .

Further details of Standard & Poor’s School Evaluation Service are available from the S&P Web site at, or by calling toll-free 877/776-6512, or by sending an e-mail to [email protected].