The New Marketplace: Executive Summary

This report looks at how two major initiatives of New York City Schools Chancellor Joel Klein have affected students who are most at risk of dropping out of school: the creation of 200 new small high schools and the expansion of high school choice.

Klein, who, before becoming chancellor, was best known for his antitrust work against Microsoft as a Justice Department prosecutor, has long maintained that competition is a fundamental tool for improving the school system. In his seven years as chancellor, he has sought to break up the monopoly of large, zoned high schools that served students from the city's working-class and low-income neighborhoods and replace them with a marketplace of small schools with a wide array of themes ranging from civil rights to environmental research, hospitality and tourism, and medical science. He expanded the city's already extensive system of school choice, forced schools to compete against one another for students and tested the idea that the best schools would flourish while the worst would eventually close. Since 2002, he has ordered 21 large high schools closed for poor performance and promised to close more in coming years.

The Center for New York City Affairs' 18-month investigation by a team of 10 reporters, researchers and editors found that these reforms did, in fact, expand opportunities for many high school students, including the most vulnerable. Yet some of the early small-school gains are starting to erode, and the core policies of school choice and large-school closings have had a harmful impact on thousands of students, including many who continue to attend large high schools.

“The Bloomberg administration and Chancellor Klein have significantly expanded the high school options available to students. But their efforts to create a more equitable system have not given students equal access to high-quality schools.”

Among the administration's successes are these: A substantial number of students who might otherwise have dropped out of large, dysfunctional high schools have instead remained in school thanks to the more personalized settings of the new small schools. Graduation and attendance rates at the new schools are both significantly higher than at the large schools they replaced and have contributed to an overall increase in the citywide graduation rate since 2002.

While some critics have suggested that the small schools "creamed" the large schools' best students, especially in their early years, the center found that the small schools, on average, now enroll roughly the same proportion of students who could be described as at-risk of dropping out as the system as a whole. These include overage students, English-language learners, special education students, and students from very low-income families.

Yet the small high schools are no panacea. Attendance rates, while better than they were at the large schools, have declined each year at a majority of the new small schools opened since 2002. Of 158 new schools for which data are available, 127 saw their average daily attendance decline while just 15 had attendance rates that were increasing, according to the center's analysis of Department of Education (DOE) data. (See "Handle With Care")

Graduation-rate trends also point to a significant challenge. Of 30 Bloomberg-era small schools that have graduated at least two classes, nearly half had graduation rates that declined sharply among students in the second four-year cohort.

Teacher turnover is higher in the small schools than in the system overall, the center's analysis shows. (See "Help Wanted") Several new schools lost nearly half their teachers in a one-year period. Principal turnover has also been high: Fifty-six of 124 principals—nearly half—hired to open new schools between 2002 and 2004 have departed.

Another giant obstacle looms in plain view. A large proportion (39 percent) of the four-year graduates of small high schools in 2007 received only a "local" diploma, which in most cases represents the bare minimum of requirements set by the state. (Some small schools use more rigorous performance assessments such as detailed research papers, but these also qualify students for only a local diploma). The state is phasing out the local diploma, and the class of 2012 (this fall's 10th graders) will have to pass all five state Regents exams with a 65 or better in order to graduate.

The new schools—and the system as a whole—face an enormous challenge meeting those new standards. (See "The Challenge of the Regents Diploma") In fact, citywide—in scores of small and large schools alike—graduation rates could crater if students fail to rise to the Regents standards over the next three years.

City officials say they intend to step up efforts to increase achievement levels for all students. But to succeed, this will require a powerful new focus on students attending large high schools. Here's why: The combined enrollment of the small high schools opened during the Klein years was about 58,000—or about one-fifth of the city's 297,000 high school students in 2007-08. Another 168,000 students attend large high schools. (The remainder are in midsize schools or in small schools created before Klein's tenure.) In other words, despite the creation of nearly 200 new small high schools during the Bloomberg administration, the a substantial majority of New York City high school students still attend large high schools. (See "A Case of Collateral Damage")

Moreover, the center's analysis found that the gains for students at the small schools came at the expense of other students, some of whom were even needier than those who attended the new small schools. As the lowest achieving large schools were closed, thousands of students, particularly new immigrants and children receiving special education services, were diverted to the remaining large schools. In many cases, these schools were ill equipped to serve a large influx of challenging students. The graduation and attendance rates at these remaining large schools declined; in some cases, barely-functioning schools became failing schools and were subsequently closed. Any gains of the small school movement must be weighed against this collateral damage.

The center's analysis of 34 large high schools in Brooklyn, Manhattan and the Bronx (defined as those with more than 1,400 students in school year 2007-08) found that 26 saw their enrollments jump significantly as other high schools were closed. In several cases, enrollment increases were greater than 20 percent. Of these 26 schools, 19 saw their attendance decline and 15 saw their graduation rates decline between the fall of 2002 and the spring of 2007. Fourteen saw both attendance and graduation rates decline.

Our examination of the effects of high school choice found similar costs and benefits. New York City has long had the largest system of school choice in the country, and Klein sought to expand it further. He eliminated zoned neighborhood high schools in large swaths of the Bronx, Manhattan and Brooklyn and required all eighth graders to fill out applications to high schools. He instituted a "matching system" similar to one used to match medical residents to hospitals, and this new system decreased the number of students who were rejected by all their high school choices from 31,000 in 2002 to 7,445 in 2009.

But there is a price. The highly centralized, computerized matching system—designed to spur competition and bring equity to an inequitable system—has failed many of the very students Klein had hoped to help. The center conducted interviews with 165 parents, principals, teachers, guidance counselors and other school officials, and identified serious flaws in both the design and execution of the high school admissions process. (See "Winners and Losers")

Adult guidance—a parent, counselor, or another adult to help a child navigate the high school admissions process—is a cornerstone of school choice, yet many students lack adequate support in choosing and ranking their schools, and guidance counselors are underequipped to support them. Adult advocacy gives advantages to some students over others who must make life-shaping decisions largely on their own. Its absence undermines equity.

Special needs students and children of immigrants, who together make up a large proportion of children at risk of dropping out, have a particularly difficult time getting the information they need to make an informed choice. For example, the DOE doesn't have an up-to-date list of special education services offered at each school. As a result, students may be assigned to schools that don't offer the services to which they are entitled, DOE officials acknowledge.

Many middle-school guidance counselors, charged with helping students fill out their high school applications, are overwhelmed by huge caseloads and the sheer complexity of giving meaningful advice about 400 different high schools. The weakness in school guidance is particularly an issue for students who don't have savvy English-speaking parents to help them navigate high school admissions.

The center's analysis made use of extensive, rich data that are collected and maintained by the DOE, as well as hundreds of interviews and extensive observation and reporting inside city schools. From this wealth of information, it is obvious the city's high schools have undergone an epochal change during the current administration.

While the most dramatic changes are in the areas of new small schools and the school choice system, there are a number of other successful models for high school education reform that have occupied quiet but substantial corners of the city's school system in recent years. Klein points to Hillcrest High School in Queens, led by a veteran principal. Hillcrest has been reorganized into "small learning communities" while remaining one large school. If organized well, schools-within-a-school such as these can combine the intimacy of a small school with the benefits of a large school, Klein says.

In this report, we also profile Harry S. Truman High School in the Bronx, which initially suffered declines in graduation rates after a surge in enrollment but which is now on the rebound, thanks to effective and creative leadership. We also look at some promising midsize schools, which may offer big-school advantages like Advanced Placement courses and sports teams along with the close personal relationships that are the hallmark of small schools. (See "Best of Both Worlds?")

The Bloomberg administration and Chancellor Klein have significantly expanded the high school options available to students. But their efforts to create a more equitable system have not given students equal access to high-quality schools. Much more needs to be done if the goal of preparing all high school students for success in college or the workforce is to be realized.