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By Stephanie Simon
(Reuters) - The United States is one of the world's biggest spenders when it comes to education, but with much of the money flowing to the wealthiest students, the country is losing ground to other nations from pre-school through college, according to a report released on Tuesday on educational progress around the world.
The United States spends 7.3 percent of its gross domestic product on education from pre-kindergarten through the university level, according to the report, by the Organization for Economic Cooperation and Development.
The rate, which encompasses both public and private spending, is the fifth highest in the world. But the results don't match the spending.
America used to have one of the highest college completion rates for young adults in the world. It has now dropped to 14th place, behind countries including Korea, Russia, Ireland and Canada, according to the OECD report .
The United States also falls behind in early childhood education. Just half of 3-year-olds were enrolled in preschool in 2011 compared with more than 90 percent in nations such as France, Italy and Norway, according to the report.
In kindergarten through 12th grade, meanwhile, the U.S. posts middling test scores, dragged down by the high numbers of children living in poverty whose schools tend to receive lower revenues from property taxes. Teacher salaries also have not risen in real terms, holding steady between 2000 and 2011, according to the report.
"In the 1960s and 70s, the U.S. was way ahead of any other country... but other countries have done a lot better at getting their resources where they will make the most difference," said Andreas Schleicher, an education policy adviser to the OECD.
"The U.S. is one of the few that invests in a regressive way. Children who need (public funding) the most get the least of it," he said, referring to how public schools, colleges and universities are funded.
At the K-12 level, many U.S. schools rely primarily on property taxes, so wealthier communities have far more to spend, even though low-income schools are eligible for special federal grants.
At the college level, private institutions for elite students have tapped alumni donations and endowment returns to pour money into programs and facilities, while community colleges and state universities have stumbled through budget cut after budget cut.
A report this month by the Council on Foreign Relations drew a similar conclusion, warning that America's global competitiveness is at risk because of a widening achievement gap between rich and poor.
"It's the reverse of what fairness, equity and efficiency would require," said Richard Kahlenberg, a senior fellow for education policy at The Century Foundation, a nonpartisan research group. "It's been a bad situation and it's getting worse."
While most other nations boosted their public spending on education during the recent recession, the United States cut back, the OECD study found.
(Reporting by Stephanie Simon; Editing by Richard Valdmanis and Leslie Adler)