Education: Bookkeeping, Book Learning, and Earning

I was tempted to call today's post "When Business and Education Collide -- The Sequel":

If you want students to learn more math, send them to a school run by a for-profit company. That's the conclusion drawn by a Harvard study of Philadelphia schools that shows schools run by for-profit companies made greater gains in math than they did previously under district management. In addition, the for-profit-run schools outperformed those run by non-profit companies in math instruction. The study, however, was funded in part by Edison Schools, a for-profit company, which may cast suspicion -- founded or not -- on the results.

In other business-related education news, the gap between elite universities' endowments and the rest has grown in large part because of allocations to "alternative" assets. "Ivy Plus" schools like Yale, Harvard, Stanford, and MIT do not only have larger endowments, but their growth rates have surpassed those of other colleges and universities substantially in the last decade thanks to investments in venture capital and hedge funds. But now that the secret to their success is out, it looks like the others have missed the boat: the article includes the final prediction that these strategies might not work so well in the future.

In Utah, the business-education conjunction takes a contentious turn. On Tuesday -- Election Day -- voters will decide whether or not to pass Referendum 1, which would implement a school voucher program. The program would allow families from all income levels, not just low-income ones, to receive grants toward private school for their children. A group of business leaders, including Overstock.com CEO Patrick Byrne, has banded together in support of the referendum, even sending out pro-voucher letters to employees -- a move that has drawn ire from critics. Interestingly, an encouraging piece of news for Utah schools -- none of them show up on the Department of Education's recently published list of "dropout factories" -- may add fuel to the fire, judging from some readers' comments.

As these examples illustrate, the conjunction between business and education continues to prove sometimes beneficial, often messy. The endowment report leads to a pessimistic refrain often heard in the No Child Left Behind era of education: the rich keeping getting richer, and there's no catching up. For all its promises of innovation, the experiment in for-profit management also has its detractors. A critical look at one Philadelphia school run by Microsoft can be found in this article from the September issue of Fast Company. And support for voucher plans like Utah's often stems from a business principle -- that more choice in schools leads to greater competition, subsequently leading to an improvement in their quality -- which may not translate as well to education. But if the Utah referendum passes, the hypothesis will finally be tested.

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2 Comments

  • James

    Why not privatize everything?

    This is another rung along the ladder to neo-fascism.

    for those who didn't hear, blackwater has a subsidiary which will be contracted to spy. Spies-for-hire. Privatize national security, privatize intelligence, privatize schools, privatize government!

    It's bad for America. The Constitution has a thing or two to say about that.

  • Joseph Allan

    Why not privatize everything?

    This is another rung along the ladder to neo-fascism.

    for those who didn't hear, blackwater has a subsidiary which will be contracted to spy. Spies-for-hire. Privatize national security, privatize intelligence, privatize schools, privatize government!

    It's bad for America. The Constitution has a thing or two to say about that.