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April 1, 2002
Vol. 59
No. 7

Research Link / For-Profit Schools

      The concept of involving for-profit organizations in publicschools is not new; school districts have contracted for suchservices as pupil transportation for decades. What is new isprivatizing entire schools and school systems and turning overall facets of school management—including curricular andinstructional decisions—to for-profit education managementorganizations (EMOs).
      What are the benefits of letting education management organizations,such as Edison Schools, run schools? Edison Executive Vice PresidentJohn Chubb suggests that students who attend Edison schools aresucceeding academically (1998). He argues that Edison schoolsaddress student needs and support learning by providing a longerschool day and school year and by placing personal computers inthe homes of every student in 3rd grade or higher.
      Chubb's data suggest that only 43 percent of 3rd graderswho entered one Edison school in Massachusetts scored above the50th percentile on a national standardized test in mathematics.After two years in the Edison program, 46 percent of the samestudents, now 5th graders, scored above the 50th percentile onthe standardized math test. Chubb also points out that during the1995–96 school year, 49 percent of parents gave the Edisonschool that their children attended a grade of A,and 42 percent gave it a B. In 1997–98,58 percent of parents gave the school an A,and 34 percent gave it a B. Finally, Chubbpoints to student turnover rates, which are normally high in urbanareas but tend to be low at Edison schools. In one urban area,for example, Edison lost only 6 percent of its students duringthe 1997–98 school year.
      In contrast to Chubb's findings, Kaplan (1996) suggeststhat little in either the instructional/managerial model or thehigh-tech emphasis of for-profit school management organizationsis innovative or unique. Instead, because the programs that mosteducation management organizations use are readily available toall schools and were funded by the government,The merchandisers of commercial-style school reform mayeven wind up selling government-funded research products backto the people whose taxes paid for them in the first place.(Kaplan, 1996, p. 10)
      Researchers Zollers and Ramanathan (1998) studied for-profitcharter schools run by several companies and found that, althoughall the for-profit schools pledged to educate students withdisabilities, they educated a smaller percentage of thesestudents—and a substantially smaller percentage of studentswith highly complex disabilities—than the local districtdid. Zollers and Ramanathan also found that for-profit schoolsreturned considerably more disabled students to the local publicschools than did nonprofit charter schools. For example, onefor-profit school in their study returned 21 students, andanother returned 40 students, during a three-year period. Duringthe same time, only two students left five nonprofit charterschools.
      Miron and Applegate (2000) determined that Edison students werenot doing any better academically than similar students in publicschools:Students in schools operated by Edison—while they oftenstart at levels below national norms and district averages—progressat rates comparable to students in other district schools.Unfortunately, this conclusion does not meet Edison's goal,which is to have achievement performance levels that exceed thelevel at comparable schools. . . . In terms of “value-added”performance, over time we found that students at only three ofthe ten Edison schools were performing better than the comparisongroups we examined. . . . On the other hand, there were threeschools whose gains scores were less than those in the comparisongroups . . . and the remaining four schools showed mixed results.(pp. 252, 254)
      Molnar (2001) studied the economics of for-profit schools anddiscovered that the typical for-profit charter substitutes aprivate bureaucracy for a public one, with all the same trappingsexcept public accountability. Further, he found that for-profitcompanies cannot educate students for less money than is alreadyspent on public education. Molnar contends that for-profit schoolsresult in a more expensive—and less accountable—alternativeto conventional public schools.
      Rhim (1998) reported that for-profit schools are not that differentfrom many other current school reform programs, except that theeducation management organizations that run them seek to earn aprofit and are responsible for nearly all aspects of managing theschool. Rhim believes that policymakers should carefully investigatethe specific costs and benefits of a potential for-profit partnershipto ensure that it is in the best interests of the students.
      Education management organizations may fill a needed role ineducation. Current research suggests, however, that policymakersshould wait for the results of deeper and broader assessments offor-profit schools' effectiveness before committing theirschools and districts to such a high-stakes decision.

      Chubb, J. (1998). Edison scores and scores again in Boston.Phi Delta Kappan, 80(3), 205–213.

      Kaplan, G. (1996). Profits r us: Notes on the commercializationof America's schools. Phi Delta Kappan, 78(3),K1-12.

      Miron, G., & Applegate, B. (2000, December).An evaluation of student achievement in Edison schools openedin 1995 and 1996. Kalamazoo: The Evaluation Center, Western MichiganUniversity. Available: www.wmich.edu/evalctr/edison/edison.html

      Molnar, A. (2001). Calculating the benefits and costs of for-profitpublic education. Education Policy Analysis Archives, 9(15),1–19. Available: http://epaa.asu.edu/epaa/v9n15.html

      Rhim, L. (1998, April). Franchising public education:A study of the linkage of charter schools and private education managementcompanies in Massachusetts. Paper presented at the annual meetingof the American Educational Research Association, San Diego, California.(ERIC Document Reproduction Service No. ED 424 624)

      Zollers, N., & Ramanathan, A. (1998). For-profit charter schoolsand students with disabilities. Phi Delta Kappan, 80(4),297–315.

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