As school districts across the country run deficits and lament budget cuts, they continue to spend huge amounts on practices that fail to improve student achievement, such as paying teachers more if they obtain a master’s degree.
With federal COVID relief funding about to dry up and public-school enrollment cratering, district finances are in freefall. Los Angeles Unified School District is looking at a deficit of $94.5 million, while the Chicago Public Schools is facing a mountainous $734 million deficit.
“Research shows that, on average, teachers with master’s degrees are no more effective than those without.”
Yet, as the red ink piles up, a new report by the National Council on Teacher Quality has found that 90 percent of large school districts pay teachers more for master’s degrees, “despite the evidence that master’s degree premiums are bad policy for almost everyone.”
NCTQ researchers examined 148 teacher contracts and policies in large school districts and found that “a staggering 135 districts pay teachers with master’s degrees more than their equally experienced colleagues with bachelor’s degrees.”
It is true that effective teachers have a significant impact on student outcomes. As the Institute of Education Sciences has noted, “Effective teachers improve student outcomes, both academic and behavioral.”
School districts have assumed that obtaining a master’s degree is a valid proxy for teacher effectiveness. It is not.
According to the NCTQ report, “Research shows that, on average, teachers with master’s degrees are no more effective than those without, and even when a practicing teacher earns a master’s degree, their effectiveness doesn’t improve.”
Worse, the cost of increasing pay for teachers with a master’s degree is significant.
The NCTQ calculated that in the districts it studied that paid a master’s degree premium to teachers, “the average premium in 2025 for novice teachers is $3,581.”
However, “It is more than twice that for veteran teachers, as the average premium for teachers with 25 years of experience is $9,315.” The report emphasized, though, “Just as master’s degrees do not make teachers more effective from the outset, master’s degrees do not improve teachers’ effectiveness over time.”
The figures in individual districts are eye popping. Take, for example, the Santa Ana Unified School District in Southern California.
NCTQ found that new teachers in Santa Ana with a master’s degree earn $1,954 more than their peers with only a bachelor’s degree. However, “teachers with 25 years of experience see a staggering $62,342 more in a single year.”
This gross disparity exists because pay for teachers with a bachelor’s degree is capped, regardless of years of experience, “while teachers with master’s degrees receive pay raises as they gain experience.”
The total cost of paying for Santa Ana teachers with master’s degrees is huge. NCTQ estimates, “Santa Ana may spend upwards of $38 million on master’s degree premiums, or about $993 per pupil.”
And what do students get for all that extra spending? Not better achievement results, that is for sure.
In 2023-24, seven out of 10 Santa Ana students taking the state English exam failed to meet grade-level standards, while eight out of 10 students taking the state math exam failed to score at grade level.
For districts like Santa Ana, instead of spending tax dollars on practices that fail to raise student achievement, the report recommends that these “funds could be redirected in ways that are more likely to improve student and teacher outcomes, like rewarding high-performing teachers.”
Indeed, “Research finds that performance pay may improve overall teacher quality, particularly in urban areas.”
For instance, according to Stanford and University of Virginia researchers, “a robust system of performance evaluation [for teachers]” can “generate meaningful gains in student outcomes, particularly in the most disadvantaged students.”
Thus, when school officials complain about funding gaps and beg for more support, the public should ask if their tax dollars are going to programs and practices that do not give real bang for the buck. Taxpayers should not be forced to subsidize failure.
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Lance Izumi is senior director of the Center for Education at the Pacific Research Institute. He is the author of the 2024 PRI book The Great Classroom Collapse: Teachers, Students, and Parents Expose the Collapse of Learning in America’s Schools.