Education Reformers See Big Role for Business

Education Management Organizations (search) like Edison and White Hat Ventures say they can solve the problems hampering America's education system. But teachers say for-profit schools are more concerned about the bottom line than top test scores.

Edison and White Hat are the largest EMOs in the nation, which all together manage 417 schools in 24 states. Company officials say their entrepreneurship is providing unique opportunities to tens of thousands of students, many of whom came from failing schools. Supporters of alternative education options agree.

"It's a very good thing for education to see more players on the field," said former secretary of education Bill Bennett (search), who spoke Thursday at the 10th anniversary of the Center for Education Reform (search).

"It's a very good thing to have people who think like entrepreneurs creating new ideas," said Bennett, who chairs the board of directors of his EMO, K12, which has innovated by offering its lessons over the Internet.

Private companies have been involved in education for a while, particularly as school districts contract out services like transportation and food.

About a decade ago, some of those districts began turning to private companies to manage the curricula and operations of schools, and the privatization of schools really took off with the growth of charter schools.

The results have varied, depending on who is asked.

The Brookings Institution's (search) 2003 report on education, released in October, found that EMO typically target low-achieving students and often take over failing schools or appeal to students who have not performed well in other public schools.

As a result, students in EMOs are still not as successful as many public school students. Brookings found that in 2000, students in its sample group of EMO schools scored in the 16th percentile on standardized tests.  However, by 2002, these same schools had moved up to the 28th percentile.

"EMO-operated charters score significantly lower than regular public schools and non-EMO charters but registered greater test score gains from 2000 to 2002," the study reported.

"The vast majority of students have met or exceeded the expected level of growth," said Mark Thimming, CEO of White Hat Ventures (search), which operates 32 schools, serving 13,000 students. Thimming said many students are so disadvantaged when they enter EMO schools that it takes a while to catch up.

Studies conducted by the teachers unions have drawn different conclusions about the quality of EMO educations.

A report by the American Federation of Teachers (search) found that Edison Schools, the largest EMO, "cuts corners" on its programs.

AFT acknowledged that its conclusions are tentative, but stated in its report that "Edison relies heavily on inexperienced teachers. Typically, half of the teaching force has less than five years experience, compared with a national average of 16 years."

AFT spokeswoman Celia Lose said her organization is bothered by the fact that EMOs, which have other goals, have performed no better than public schools.

"Unlike public school systems, private companies have a number of interests: answer shareholders, make a profit, and raise student achievement. EMOs have found that it is difficult to achieve all of those goals," Lose said.

EMOs dispute the claim that they place a focus on profits to the detriment of the students.

The schools' "growth in test scores has been significantly faster than those in any other school in D.C.," said Donald Hense, CEO of Friendship House Association (search), which operates four campuses in Washington D.C. in partnership with Edison.

Hense acknowledged that money is a concern, but only because it is needed to keep the schools running.

"I don't exactly expect to make a profit, but I do expect to end the year in the black so we have monies to reinvest," he said. 

The premise that these companies have gotten involved in education just to make money is inaccurate, Thimming said.

"Our interest is not to make money first. Our interest is to educate children, but not to have to stand on the corner with a tin cup. Every education management organization that I know has that philosophy," Thimming said.

Thimming challenged teachers to do a better job and cited the Ohio school system as an example of public schools gone wrong. Only about one-fourth of Cleveland students and one-half of Columbus students graduate from high school, he said, and Ohio parents and students need more options.

"If we were losing this many children in a war, we would evict our president and people would be protesting in the streets," he said.