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This study investigates how teacher candidates engage with and understand critical issues in education through literature circles. Using a qualitative case study approach, we analyzed participants' dialectical journals to explore their engagement with issues of diversity, equity, stereotypes, implicit bias, and social-emotional skills. Our findings reveal distinct differences in the depth and nature of reflections between undergraduate and graduate preservice teachers. Lived experience compensates for a lack of professional experience and suggests differentiated approaches in traditional and alternative teacher preparation programs. This study underscores the importance of integrating reflective and dialogic practices in teacher education to foster inclusive and equitable learning environments. We advocate for the continued use of literature circles to enhance teachers' critical consciousness and instructional effectiveness.