Liam O’Neill
Mrs. Straub
AP Economics
18 May 2018
The Subtle Economics Of AP Classes
It is sunday may 20th, and the awful stress of AP testing is over, and i’m sure you all can agree that it is great to finally feel as though the school year is almost over. Although it may feel as though only thing AP classes do is bring unneeded stress into our lives, Ap classes have a real impact on our economy in a way that none of us even think about.
Long before I took my AP test, I thought long and hard about the opportunity cost that comes with it. I looked at the tradeoffs that come with taking and not taking the test. The primary thing I thought about was whether or not the test would truly benefit me, especially for $90 (AP data). For many, $90 is a lot of money, especially for the students that have to pay the fees themselves. And $90 is just for one class, it is an additional $90 for every test meaning that some students will need to spend $400 to take tests. Although Paying $90 to take a test might at first sound like one of the dumbest decisions a person could ever make, it’s much more than just a test. Not only does the AP score you receive demonstrate your performance on your AP Exam, but it also measures of your achievement in your college-level AP course. This score will be used by colleges and universities to determine if they will grant you credit for what you've already learned, scoring a 3 (4 for some colleges and even 5 for others) will result in you being qualified to skip the equivalent course once you get to college. This reason alone is a significant incentive to take the AP test as $90 and passing the test can turn into a potential $2400 in savings. To break that down on how big of a potential impact that is, of the 841 students at Pewaukee 53% participate in AP testing with a 83% pass rate on the various AP tests meaning that around 371 kids are successful on passing an AP test each year at Pewaukee (rankings). When you take that into consideration, that is a total of $887,894 in potential savings on college tuition for students at Pewaukee High School.
Everybody knows what it is like to feel broke, but for college students they rarely know the feeling of not being broke. High school students work for hours in attempt to save up enough money for college, taking AP classes results in less money that is needed to be saved as the cost of college tuition decreases significantly. Less money that is needed to be paid off in loans also means that college students have to worry significantly less about debt and interest rates. This is a positive externality for businesses around colleges as less money to pay off means that the purchasing power of students increases greatly for normal goods thus greatly increasing potential consumption expenditures on things such as food or clothes.
Additionally, taking an AP class allows you to differentiate yourself from other college applicants as all AP classes are greatly respected across all the nations institutions. Colleges look at how rigorous a students classwork was as a determinant in acceptance and academic scholarships. On average $50 billion is awarded to eligible students in scholarships, with 94% of these funds came from federal, state and local government sources (saving for college).
In conclusion AP classes have an impact that goes far beyond our individual lives. Their impact on the economy is undeniable whether it goes unnoticed or not. They provide individuals with many benefits and positive externalities and are an overall great addition to our lives although we may rarely feel that way.
Works Cited
“AP Data - AP Report to the Nation 2014.” SAT & SAT Subject Tests™ – Research – College Board, research.collegeboard.org/programs/ap/data/nation/2014.
“AP Program Participation and Performance Data 2017.” SAT & SAT Subject Tests™ – Research – College Board, research.collegeboard.org/programs/ap/data/participation/ap-2017.
“Google Sheets - Create and Edit Spreadsheets Online, for Free.” Google Slides, Google, docs.google.com/spreadsheets/d/1mIgxDcES1F_nfpb6ksj7oq-JDJ_w9adN7x0W67yDfpg/edit#gid=0.
Rankings, National. “How Does Pewaukee High Rank Among America's Best High Schools?” U.S. News & World Report, U.S. News & World Report, www.usnews.com/education/best-high-schools/wisconsin/districts/pewaukee-school-district/pewaukee-high-21834.
“Surprising Facts About Scholarships.” Savingforcollege.com, www.savingforcollege.com/articles/surprising-facts-about-scholarships-836.
“Table 5. - Average Public School Size (Mean Number of Students per School), by Instructional Level and by State: Overview of Public Elementary and Secondary Schools and Districts: School Year 1999-2000.” Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2001-2002, E.D. Tab, National Center for Education Statistics, nces.ed.gov/pubs2001/overview/table05.asp.
Wilson-Swokowski, Tye. “AP Test Scores, Participation Rise in Wisconsin.” The Badger Herald, 26 Feb. 2016, badgerherald.com/news/2016/02/26/ap-test-scores-participation-rise-in-wisconsin/.
I liked this article because it is very relocatable. In fact in my case the the trade off to take the test would have been much higher than what I would have received. This is because in my case Econ does not even count as an elective credit at Marquette University for my major in mechanical engineering. As a result the $90 dollars would have had no return in my favor so I opted out of the stressful week of AP testing.
ReplyDeleteWhile the savings are useful, they are also potential savings. And it is for all AP students in the school, which after doing the math leads to about 2300 in savings per person. But the AP courses are very difficult, meaning that many students are unable to get those savings because they simply aren't good enough at the subject. And even if a person does get the credit, some colleges won't accept the credit, meaning the 90 dollars was wasted. The AP tests are definitely useful, but a student has to think about the drawbacks before taking one.
ReplyDeleteI couldn't agree more, I was selective in my decision on what AP tests to take, as if you aren't confident in your ability to pass the test, there is a good chance you will be out on $90 that could be spent elsewhere which is a big deal for most people.
DeleteI like how you looked at PHS in particular and calculated approximately how much money would be saved based on our pass rate--which is a very impressive amount. I agree that AP tests are beneficial and many students have realized this as the number of test-takers reached a record high at PHS this year. However, it is important, to look into whether the college you will attend or those you are interested in grant credit for AP tests and for what scores. Students should also consider whether the content of an AP class aligns with what major they are interested in and determine if they would even be required to take that course in college; if not, that would make taking the AP exam less desirable.
ReplyDeleteLiam: AP testing is something that a lot of people do participate and how to earn a 3,4, or a 5 as you illuded to. Like you said for some people 90 dollars is a lot of money to be spending on a test that is not a walk in the park test. Many people do score below this benchmark for a college credit and if you did score below it it is almost as if you just spent 90 dollars and 4 hours of your time for nothing. Although if you do pass this could benefit you very, very much. And in some cases this could lead you down the road of saving upwards of 2 grand and another class in college that you do not have to take. Also if you are able to build up enough AP credits you could be subjected to graduate college early and be out in 3 years instead of 4 or 4 years instead of 5 which would save you a ton of time and money and you would be able to get into the workforce faster and start your new life earlier.
ReplyDeleteI like this post it is relevant and interesting since I often think about these things too before deciding if I should take an AP test. This was a good example of opportunity costs also since often times students end up compromising free time and money to take the test but can potentially end up with less tuition costs. So I agree it is a trade off in that way, which is why I like to look at it was a small risk that could create a large pay-off.
ReplyDeleteI myself have never thought about the economics of AP testing. Although, who does? Anyways, that is a great thing that AP testing does with your money. Although you make the $90 purchase to take the test, you could end up saving thousands of dollars just from that test. Then, for the people who don’t pass, that just means whoever runs “AP Testing” receives that money. So it may seem like you gain nothing from taking the test, you actually have a huge opportunity to make something from it. Lastly, the company needs to make money somehow, and it could look like an unfair advantage to that company, in the cases where students do past they receive something much needed and in reality AP testing is benefiting students and our economy tremendously without many even knowing.
ReplyDeleteTaking AP Tests and classes can be expensive. Its weird to think that nearly every high school student relies on these things to push their college careers forward. Whether it's for scholarships, college credit, or a class requirement. Students are willing to spend as much money as needed to take these AP Classes, because what those classes offers is worth the money.
ReplyDeleteThe high prices for taking AP tests makes me almost not want to take them, but if you think about the pros and cons to it the pros far outweigh the cons. It is risky, because there is a chance you could fail, but if you pass you can save thousands of dollars and get credits for college, so the opportunity cost is worth it in the long run.
ReplyDeleteI think the opportunity cost is often misunderstood by people who do not take tha AP test because from taking the test you are spending about 100 dollars but from it you can get the credits needed for a class which will save you a lot more money than paying for the class in college.
ReplyDeleteThis is a very interesting topic and I'm glad you chose to write about it. Even though 90 dollars is a lot of money to take a test, especially for those of us that don't have a lot of money, taking the test is worth it if you look at the potentially opportunity and benefits gained if you pass the test. For anyone who is debating on taking the test, I would say if there is even a small chance that you would pass the test I would say take it because of the potential benefit that it offers.
ReplyDeleteVery interesting topic of choice. I was not one to take the test so I cannot relate to the opportunity cost of taking the test and spending the 90 dollars. But I can understand that it is worth it for most people to take the test. Even if there is a small chance you pass, it is worth the time and money. I do regret not taking the exam due to the fact that I might get lucky and pass for such a small amount of money.
ReplyDeleteThis was a really interesting topic Liam. I was really cool that you included the graph comparing Pewaukee High School benefits to average high school benefits. You did a nice job demonstrating how initially in the short-run it can seem like you are being negatively effected because of the $90 AP testing fee. But, then you highlighted how in the long-run it is highly beneficial to participate in AP testing because kids attending Pewaukee High School have a much higher chance of receiving credit and benefits. Great article Liam!
ReplyDeleteI find it interesting how the College Board is a "non profit" but they must make a gargantuan amount of revenue. Also I feel as though the College Board can be discriminatory. What if a student is brilliant, but can't afford to take the AP Tests they need to get out of college courses, which also cost a lot of money? Maybe they should reduce the price of the tests, so that everyone has the opportunity to take a test.
ReplyDeleteIt is interesting to consider the opportunity cost of AP tests. When I was first told about the fee of almost 100 dollars I first thought that I shouldn't take the test. However, once I realized all the money I could potentially save if I got the college credits, I decided to enroll and to take the test.
ReplyDeleteI agree with this post but it is only beneficial to take the test if you know you will pass, otherwise it is just a loss of $90.
ReplyDeleteThe trade offs in this situation are big. You have to give up not only the $90 for the test, but you also end up giving up several hours of your time for studying and doing your homework for your AP class. Students taking AP classes spend 1-2 hours a night studying for these classes/exams. If we round down and say that each ap class takes roughly an hour a night to study for, and there are roughly 180 days in a school year, we find that students are studying for each AP test for about 180 hours. This is an extremely high opportunity costs. Students are probably giving up sleep and much needed rest as well as giving up time they could be studying or working all for a test that has a quite uncertain payout.
ReplyDeleteWhile taking the AP test is beneficiary in saving lots of money that can be used in the future it is only awarded if you pass the test. It depends on the student and how they can focus and understand the content of the course, if they do not succeed than the reward may not outway the tradeoffs and the student could focus their extra time, needed to study for the AP test, for other activities, earning scholarships and paddying their applications with other aspects.
ReplyDeleteI do agree with you. However I do want to add something that will bulk up your reasoning and claim, in high $90 does seem like a lot of money to take an AP test, but it gets higher to that same class in college. So marginal cost seems high for highschoolers, but marginal benefit when you take the test and recieve a 5 you don't have to take the class in college spending some thousand dollars on a course. I am going to besmirch the negative thoughts on AP classes on paying $90 to take an AP test but in reality it can save you from your college tuition being super high. In the end your college tuition will continue to fluctuate when you keep recieving 3,4, or 5's on your AP tests.
ReplyDeleteLukas Zabel
While the savings of taking an AP test do seem huge, in reality, you are giving up a whole lot of time to take the AP test.
ReplyDeleteSay the average high school student works a job earning $8 an hour. For an AP course, there is usually a textbook that requires reading each night, resulting in probably about an hour of reading and note taking, possibly more on weekends or using that weekend time to review. We’ll call that another hour of work. Pewaukee has classes every other day, so let’s say a typical AP student spends 3.5 hours studying for one AP class per week. If this time were spent working, the student could have made $28. There are 8 months of school before the AP tests in May, and months typically have about 4 weeks. So, for one class, an AP student loses $112 a month spending time studying instead of working, and $896 throughout the 8 months leading up to the test. This is a little over a third of the calculated $2400 potential earnings. Additionally, in the weeks leading up to the AP test, study time will increase, and likely more time will be spent over spring break because there is more free time. Say over the 7 days of spring break, the student spends two hours every day studying and one hour every day for the two weeks leading up to the test. This is a total of 28 hours, equallying $224 in missed working opportunity. This, plus the $896 throughout the year, along with the $90 to take the test results in a total cost of $1210 to take an AP test, and is half of the possible savings.
And if you don’t pass, you’re out $1,200.