Category: Tech

• In 2023, a record number of low-income students took Advanced Placement exams.
• The College Board made about $500 million in revenue as a result.
• The problem? A sizable number of those low-income students didn’t pass.

For high school students across the United States, Advanced Placement courses offer a curriculum that not only exposes them to university-level work but can give them credits for college should they score high enough on end-of-course exams.

For many students from low-income and working-class backgrounds, the benefits of AP coursework can be the difference between saving tuition money from earned credits or forgoing college due to a lack of funding.

For the College Board, which created and administers the AP program, increasing access to AP coursework has been a significant part of the organization’s work over the past 20 years. And part of that push by the AP has been to increase the number of low-income students taking courses and exams, which requires a significant educational and financial investment.

However, as the College Board has pitched more schools to sign on to AP coursework and register students for exams, the performance levels for low-income test-takers has not dramatically shifted from the early 2000s: 60 percent of students from this demographic group only earned a 1 or 2 out of a possible 5 on the exam, which precludes them from earning college credit for the AP course.

In 2023, 38 percent of all test-takers scored a 1 or 2, with low-income students posting higher failure rates. Yet taxpayers this year shelled out at least $90 million to pay for AP exams that a sizable percentage of students didn’t pass, according to The New York Times.

The Times, based on its own analysis of College Board files and local education budgets, said that the organization receives about $100 million each year in public money for AP exams. In response to The Times, the College Board said that in 2023, it had received at least $90 million from the federal government to cover exam fees.

In tax filings, the College Board stated that it took in roughly $5 million to $6 million in direct government funding each year, according to the newspaper.

Scott Eisen/Getty Images

‘The best stuff in education’

At $98 per exam for US test-takers, AP fees bring in a lot of money to the organization, and the push to enroll more low-income students into the program comes at a time where revenue from the SAT — the College Board test that in recent years has become optional for students applying to a swath of institutions — has sharply declined.

The Times reported that from 2019 to 2022, SAT revenue dropped from $403.6 million to $289.2 million, a reflection of the test being less ubiquitous in the college admissions process.

The College Board stands firmly behind its AP push, though, pointing to equity and the need to expand education opportunities for students who may not have been initially on a college coursework track.

“What if the best stuff in education were not just for the best to distinguish themselves — but could engage a much broader set of kids?” College Board chief executive David Coleman said during a podcast earlier this year. “Why are we holding it for some?”

The College Board, reflecting on its own analysis, stated that AP coursework boosts students across the board, independent of their respective scores on the exam.

The organization has made this argument as AP has morphed into its financial crown jewel. The program in 2022 brought in nearly $500 million in revenue.

While the AP expansion has offered more opportunities to a broad range of students, questions remain regarding the actual preparedness of low-income students, as they often lack the funding to pay for expensive test preparation courses and may not have been exposed to as much high-level work as their upper-income peers before high school.

In 2023, a record 1.1 million students from low-income households took AP exams, per The Times. It’s a sharp increase from 2003 when 153,000 low-income students took the exams.

Overall, 5.2 million students sat down for AP exams in 2023, a more than threefold increase from 2002, when 1.6 million students took the exams.

Trevor Packer, who heads the Advanced Placement program, told The Times that the number of students taking on the intense AP curriculum and the push to find students who can perform well in the classes more than makes up for the low scores from many test-takers.

In a statement, the College Board said that the money it receives from the government — about 18 percent of its overall revenue — was “minimal” compared to its operating revenue.

“We believe these are worthwhile investments in preparing all students for their futures,” the organization said. “We recognize that all students are not yet receiving equitable preparation for AP coursework and that such work requires addressing inequities that occur years prior.”

It’s been less than 24 hours since OpenAI announced that its high-profile CEO Sam Altman was fired because the board no longer had “confidence in his ability” to lead and that Altman was “not consistently candid in his communications.”

The news came as a shock to the tech world, including employees at OpenAI and Microsoft, which has invested about $13 billion into the ChatGPT maker. 

But as a few new details of the ouster emerge, some have begun to describe it as a “coup,” or even a “hostile takeover,” journalist Kevin Roose said on a recent episode of Hard Fork, a New York Times podcast about tech. 

Altman was pretty “popular” within the ranks of OpenAI, and recruited a number of its employees. So many of them were baffled by the news of his sudden departure, Roose said. 

OpenAI’s now ex-president and cofounder, Greg Brockman — who quit in protest after Altman’s firing — said on X that Altman was given very little notice about his departure. 

In his X post, Brockman said on Thursday night, Altman received a text from Ilya Sutskever, OpenAI’s cofounder and chief scientist, asking to talk at noon the following day.

When Altman logged on to the Google Meet link on Friday, he was joined by the entirety of OpenAI’s board, Brockman said. Sutskever told Altman he was being fired and that they would publicize the news soon.

Minutes later, Brockman said he received a text from Sutskever asking to chat. Sutskever informed Brockman that Altman had been fired. And Brockman said he, too, was told that he was being removed from his role on OpenAI’s board but that he was still “vital” to the company and could remain as president. The company’s management team was made aware of the leadership changes shortly after that, Brockman said. 

Mira Murati, who has now assumed the role of interim CEO, was informed of the executive shake-up on Thursday night, Brockman noted in his post. 

“Sam and I are shocked and saddened by what the board did today,” Brockman said.

While the board’s actions are enigmatic by any account, it’s worth noting that OpenAI also operates by a rather unconventional corporate structure.

OpenAI launched in 2015 as a nonprofit. Then, in 2019, it announced a “capped profit” company, according to its website. So, it’s now made up of a nonprofit board that operates a for-profit entity, and most board members don’t own shares in the company. Altman, himself, took no equity in the company when it went for-profit. 

Screenshot from OpenAI’s website.

Altman’s departure has thrown Cerebral Valley, the moniker for San Francisco’s booming AI enclave, into a state of uncertainty. 

Annie Wright, a psychotherapist in the Bay Area, who’s been observing the pulse of the area for years, said she, too, was shocked by the news in a text to Insider. 

“AI makes the Bay feel like the Wild West in a gold rush and this feels analogous to the town Sheriff getting gunned down,” Wright said.

• The share of US homes without a mortgage jumped five percentage points from 2012 to 2022 to a record near 40%, Bloomberg reported. 
• More than half of those homeowners are at retirement age.
• Historically high mortgage rates and home prices have kept many Americans sidelined from the market.

The current US housing landscape is sidelining potential homebuyers, who are scared off by 8% mortgages and stubbornly high prices — but climbing interest rates aren’t a problem for the record number of Americans who own their homes without a mortgage.

The share of homeowners that are mortgage-free surged 5% between 2012 and 2022, Bloomberg reported Friday, citing data from the Census Bureau, hitting a new record just below 40%. In 2012, there were 7.9 million mortgage-free single-family homes and condos. Census data analyzed by Bloomberg show that the figure increased to 33.3 million over the subsequent decade.

Millions of Americans refinanced their mortgages before the recent rate spike, and some have done it multiple times over several decades. Lower rates of the past allowed many borrowers to enter shorter-term loans without radically increasing their monthly payments. 

Then, many benefitted further when property values surged after the 2008 crisis.

More than half of mortgage-free homeowners are at retirement age. Without the burdens of a mortgage, some can move as they please. They’re moving from more expensive regions to the Sun Belt, where they are able to buy homes outright. Construction is booming in these states, and the share of mortgage-free homes is high. From the start of the pandemic in 2020 up to 2022, 29% of new homes built in the US were in Florida and Texas, two places that together saw 43% of homes owned outright, per Bloomberg.

As Business Insider reported, about 730,000 people moved to Florida between 2021 and 2022. It’s part of the “biggest migration” in a generation, said Holly Meyer Lucas, a real-estate agent in South Florida. Texas and Arizona, she added, have also seen an uptick, among other lower-tax states.

West Virginia, meanwhile, has the largest share of mortgage-free homes, at about 53%, Bloomberg reported. Zillow data cited by Bloomberg shows the median price there hit $157,498 in October, the lowest in the country.

This week, rates on the 30-year fixed mortgage hovered at 7.77%, the lowest level in roughly two months, tumbling as Treasury yields pull back from multi-year highs in November.

• “Gridlock” in Congress is in part to blame for safety risks in the skies, aviation experts said. 
• The group, formed by the FAA, said insufficient funding is hampering the FAA. 
• “The FAA has insufficient resources to carry out its portfolio of responsibilities,” the report says. 

An independent team of experts formed by the Federal Aviation Administration has blamed “recurring gridlock” in Congress and insufficient industry funding for the growing safety risks in the skies.

The National Airspace System Safety Review Team sounded the alarm about aging FAA infrastructure and technology, air traffic controller staff shortages, and funding issues in a 52-page report released on Wednesday.

“These challenges, in the areas of process integrity, staffing, and facilities, equipment, and technology, all have ties to inadequate, inconsistent funding,” the report says. “Together, these challenges contribute to increased safety risk and should be regarded as incident precursors.”

The “current erosion in the margin of safety” in the United States’ aviation system “caused by the confluence of these challenges is rendering the current level of safety unsustainable,” the report said.

The six-member outside panel of aviation experts said in the report that years of disorder in Congress has posed significant challenges for the FAA, heightening safety risks.

“Recent Congresses have been plagued by recurring gridlock, which undermines the FAA’s ability to effectively perform its mission,” the report said.

The report continued, “This stop-and-start process in Congress has resulted in the disruption of critical activities, notably including the hiring and training of air traffic controllers.”

“It has also slowed down the implementation of key technology modernization programs, delayed thousands of flights, and held up billions of dollars of airport infrastructure investments. This situation makes it extremely difficult for the FAA to effectively conduct long-term business planning and execution,” the report said.

The expert team called for “urgent action” to be taken to address the risk in the nation’s aviation system and made a series of recommendations in the report, which focus on hiring, modernizing infrastructure, and “adequately and consistently funding” the FAA.

“At current funding levels, the FAA has insufficient resources to carry out its portfolio of responsibilities,” the report says.

FAA Administrator Mike Whitaker told Business Insider in a statement on Thursday that the agency “welcomes” the group’s report and that it “will thoroughly review the recommendations.”

“We appreciate the team’s time and expertise to help us pursue our goal of zero serious close calls,” Whitaker said.

The FAA established the independent safety review team, which includes former FAA administrator Michael Huerta, in April to “examine ways to enhance safety and reliability in the nation’s air traffic system” after several near-miss incidents between planes.

A New York Times investigation published this summer found that near-miss collisions between planes have been happening far more frequently than previously thought. On average, there were multiple airline close calls per week this year, the report, which was published in August, found.

In July alone, there were at least 46 near-miss incidents involving commercial planes, according to the New York Times.

• Two years ago, a farmer found three cattle dead and covered in a massive number of ticks.
• The ticks turned out to be an invasive species, the Asian longhorned tick, newly established in Ohio.
• The ticks reproduce asexually, so thousands can spring up quickly in new regions.

In the summer of 2021, Risa Pesapane, an assistant professor of veterinary preventive medicine at Ohio State, got a call about three dead cattle on a farm in eastern Ohio, near the border of West Virginia. The farmer had never seen animals so infested with ticks, Pesapane told Insider.

In a recent paper, published in the peer-reviewed Journal of Medical Entomology, Pesapane and her colleagues documented the case, stating it was the first established population of Asian longhorned ticks in Ohio. But Ohio isn’t the first place these ticks have turned up.

ALTs are an invasive species native to East Asia. It’s been in the US since at least 2010 and found in at least 19 states, according to the US Department of Agriculture.

Oleksandr Melnyk/iStock via Getty Images; Insider

“The tick will be a nuisance and it is spreading,” Kevin Lahmers, a clinical associate professor at the Virginia-Maryland College of Veterinary Medicine, told Insider. “It will cover most of the eastern half of the US — that’s most likely.”

That’s a concern since these ticks not only pose a threat to livestock but, to a lesser extent, people too. “The reason that people are following the ticks so aggressively is because of concern for public health, not just animal health,” Lahmers said.

Thousands of Asian longhorned tick clones

When Pesapane and her colleagues showed up at the farm in Ohio, they used a drop cloth and lint roller to collect over 9,000 ticks from around the property in about an hour and a half.

“There were just thousands of ticks present,” she said. “I knew immediately that we were not dealing with a tick that we know to be native to the United States.”

“They just show up in such incredibly large numbers,” Joellen Lampman said. She’s an Extension Support Specialist in integrated pest management with Cornell University.

These ticks show up in such large numbers because they can reproduce asexually. None of the experts knew of any other tick species in the US that reproduces this way. On top of that, the ALT can “complete its life cycle in a shorter period of time than the ticks previously native to the United States,” Pesapane said.

So, if a female ALT gets transferred all by itself to a new location, it can still establish a new population. “She’s basically cloning herself,” Lampman said. All her offspring can then go on to lay between 1,000 and 2,000 eggs.

The curious case of the dead cattle

Risa Pesapane/Ohio State University

Pesapane and her colleagues suggest the Ohio cattle died from blood loss. However, Lahmers is more skeptical that blood loss, alone, was the culprit.

“It would take an awful lot of ticks in order to take enough blood from that animal to” kill it, Lahmers said, adding that because the cattle were buried before Pesapane arrived, it’s difficult to know for sure what killed them.

While Pesapane understands Lahmers’ concern, she said that USDA Animal and Plant Health Inspection Service and studies in New Zealand also support the hypothesis that these ticks can cause death in livestock due to severe blood loss.

She added that it’s essential to understand the mechanism that kills livestock as the tick spreads. However, it’s been difficult to find carcasses to study because cattle owners typically bury them too quickly.

“Some [pathologists] have hypothesized that there may be an interaction between severe anemia and some sort of toxicosis from compounds in tick saliva, but this is just speculation until a study is conducted,”  Pesapane said.

That said, the cattle’s death from another common tick-borne disease, Theileria orientalis, is unlikely since the farm’s remaining live cattle tested negative for it, per Pesapane’s study.

Lampman noted that similar cattle deaths have happened in North Carolina. “This is not an event that is unique and we’re going to see more of it, unfortunately.”

Asian longhorned ticks are hard to spot, contain, and kill

Tiny and brown, the ALT is hard to distinguish from other types of ticks, making it difficult to spot.

The ALT seems to thrive in tall grass and wooded areas. While existing pesticides will kill them, they need to come in direct contact with the ticks. “If the ticks are hiding deep down in leaf litter or in dense grass, the pesticides just aren’t going to reach,” Lampman said.

Controlling an ALT population would take re-application of a pesticide every five weeks, Pesapane said. That’s not feasible because the chemicals would affect the grass the cattle eat as well as any pollinators in the area.

Getty Images

Another challenge is that the ticks feed on a slew of different animals. All the experts agreed that animals like cattle and horses seem to be their favorite, but ALTs have been found on dozens of animals.

“It’s sort of tasting the buffet of all the new possible hosts in the United States, but it has some sort of tried and true favorites,” Pesapane said.

“We’re finding them on raccoons, skunks, possums,” in addition to deer, dogs, and birds, Lampman said.

Birds and other wildlife may help spread the ticks, especially locally, but Pesapane said moving livestock between states could also be a culprit. “There’s probably some combination of wild and domestic animals that are responsible for this” spread, she said.

Asian longhorned tick-borne diseases

In other countries, these invasive ticks spread several pathogens in humans and animals. Right now, they mainly seem to be a threat to animals, but they could potentially transmit diseases to humans, too, Pesapane said.

For example, Pesapane has seen several cases of the disease Theileria orientalis Ikeda in livestock. It causes jaundice and anemia and lowers milk production. Pregnant, infected cows can also lose their fetuses.

“Theileria orientalis Ikeda was not known or not widespread in the United States before this tick,” Pesapane said.

This type of Theileria isn’t a risk to humans or most other species, Lahmers said. However, the ticks can pass on other pathogens.

While it doesn’t seem effective for passing on Lyme disease, the tick has been shown to transmit other human diseases in lab settings. They include Rocky Mountain spotted fever, Heartland virus, and Powassan virus.

Powassan is currently rare but is increasing. With Lyme disease, transmission takes hours. Ticks can pass Powassan on in just 15 minutes, according to the Yale School of Public Health.

“I’m very, very concerned about Powassan virus,” Lampman said. “Here’s a potentially fatal disease that can get transmitted within minutes. We just don’t want to get bit by ticks.”

When it comes to staying safe from the ALT, the advice is the same as with other ticks, like covering up bare skin and wearing permethrin-treated clothing. Lampman cites the Swiss cheese method: “The more things that you do, the less likely you are to be bit by a tick.”

Pesapane also notes that the ticks seem to love biting dogs, so it’s important to protect pets, too.

For livestock, the approach is also similar to dealing with other types of ticks. Pesapane recommends checking animals for ticks, treating infected animals, and maintaining pastures.

All three experts urged people to reach out to their state universities or local agriculture departments if they see an unusual tick.

• Bank of America changed its Fed outlook on Tuesday after a softer-than-expected CPI report. 
• Strategists wrote that they believe the rate-hiking cycle is now over. 
• October CPI came in at 3.2% year-over-year, down from 3.7% in September.

October’s softer-than-expected inflation reading prompted Bank of America on Tuesday to change its outlook on further interest rate increases, with strategists declaring that the Federal Reserve’s rate hiking cycle is over. 

Inflation in October came in at 3.2% year-over-year, down from 3.7% in September and the lowest reading since June. Core inflation, meanwhile, accelerated 4% year-over-year, also below the consensus forecast.

In its note on Tuesday, the bank called the report “the straw that broke the hiking cycle’s back.” Before this week, the bank had argued that Fed officials were leaning toward a no-hike move in December, though it still adopted a “wait and see” approach with incoming data. Tuesday’s benign reading affirmed that forecast, in the bank’s view. 

“Therefore, we have changed our Fed call,” the strategists said. “We now think that the hiking cycle is over. Markets agree: at the time of this writing, they are pricing less than a 10% probability of another hike.”

Bank of America said that it would take a significant re-acceleration in inflation for the Fed to resume hiking its benchmark rate in 2024, a scenario that does not fall within the firm’s base case.

The strategists expect cuts to begin in June 2024, and move at a pace of one cut per quarter.

“The October CPI report is undeniably good news,” strategists maintained. “However, we must remember that September was bad news and that monthly inflation data can be very choppy. That said, we have seen significant disinflation to date, which is good news for the Fed. The path forward is likely to remain bumpy, but we do think that further disinflation is likely over the coming years.

The stock market, meanwhile, reflected BofA’s optimism.

By midday in New York, the S&P 500 had climbed 1.8%, the Dow Jones Industrial Average gained 1.46%, and the tech-heavy Nasdaq was up more than 2%.

Fairlead Strategies’ Katie Stockton on Tuesday said the S&P 500’s strong gains over the last several days point to bullish seasonality, and that the index should push higher as the year winds down.

“The S&P 500 confirmed its breakout above minor resistance from the daily cloud model yesterday in a positive short-term technical catalyst,” Stockton said. “The breakout increases the likelihood of a test of more important resistance near 4,600 between now and year-end.”