More than a third of Michigan students leave high school without possessing basic skills in reading, writing, and arithmetic. This forces post-secondary schools and employers to teach these individuals basic skills.

Providing post-secondary remedial education is just one expense society must shoulder to make up for the failure of students to learn these minimal competencies. Other costs—the cost of coping with those who never acquire these skills—include everything from lost productivity to more expensive criminal justice and social welfare systems.

This study calculates the financial costs incurred by Michigan business and institutions of higher learning when students leave high school without learning basic skills. Using five different strategies for determining this cost, we conservatively estimate that the Michigan economy suffers a total annual loss of between $311 million and $1.15 billion. The best estimate, the answer from averaging the results from all five calculation strategies, is $601 million per year. Extrapolating to the entire United States, the lack of basic skills costs a total of approximately $16.6 billion each year. In addition to these monetary costs, the human costs are incalculable.


Until more long-range solutions can have an impact, there seems to be no way to avoid spending more on remedial (or as it is now called, developmental) education in post-secondary schools. And while this study does not investigate the full range of possible policy responses to the situation, a number of options do seem fairly obvious.

First, public school districts and private schools should consider requiring students to pass a rigorous exam before receiving a high school diploma. While no one would be so naïve as to claim this as a foolproof solution, it would certainly bolster the integrity of a diploma and place pressure on schools to improve their quality.

Second, public school districts and private schools should offer to hold themselves accountable in some realistic way for at least some of the cost of addressing the lack of basic skills among their graduates. Such a "money-back guarantee" would provide incentives to schools to ensure that their graduates possess basic skills.

Third, parents should be able to choose alternative schools for their children without financial penalty when a public school district fails to provide an adequate education. Students in higher education use public funds or tax credits to pay for tuition at a wide range of community colleges, public universities, private colleges, and vocational schools. By most accounts, this range of choice has given rise to a level of quality among American institutions of higher education unsurpassed in the world. Giving students similar choices in grades K-12 would increase the opportunity for children to learn basic skills earlier in their lives.

The study closes with commentaries from three remedial education experts. Dr. Thomas F. Bertonneau, a Central Michigan University instructor, goes beyond dollars and cents to address the personal, human cost students face when their schools fail them. Dr. David W. Breneman, dean of the Curry School of Education at the University of Virginia, compares his research of remedial education's costs with the author's and endorses efforts to improve K-12 education. Dr. Herbert J. Walberg, professor of education and psychology at the University of Illinois at Chicago, comments on other possible social costs of remediation not considered in the body of the study.