Long before NCLB, urban school districts "outsourced" tutoring to Tile I students in "pull-out" programs. Sylvan Learning System's contract services division comes to mind. The services offered by SES providers today represent a "forced" outsourcing of teaching and learning activities most school district would prefer to keep in-house. A new twist on this outsourcing is American tutoring firms' decisions to outsource "live" online tutoring to Indian firms. Yes, some already "sell into" the US market directly, but the business arguments for partnering with an American firm are compelling.... The principal issues for US firms have nothing to do with cost - that's a "no-brainer." Your editor would argue that the challenge of providing value ("results at a price") in this market will drive every tutoring firm to a mix of "on-site/online" and "human/artificial intelligence" services.... The first issue is quality assurance - manageable but an ongoing operations challenge. The second is political - the consequence of outsourcing American professional jobs overseas is a point teachers unions have already made and an issue where they will find some sympathy in the electorate. But the most important is strategic - if American firms have the advantage now because they control the entre to the U.S. market, the better the services provided by the foreign firms (and every U.S. firm will want the highest quality foreign partner), the more likely the balance of power will shift in their direction. Their alternative to continuing the relationship will be going directly to the client base. For this reason, the smart U.S. firm probably wants the foreign firm to be an equity partner, and every smart firm probably wants some kind of relationship with a foreign partner. Management - and investors - should start seeing a foreign buyout as one plausible exit strategy of the several they ought to pursue. Remember that the highest payout will go investors in the SES provider with the best alternatives to any negotiated agreement its board might consider.   more »

This week's announcements from "Inside The Beltway."   more »

Hardly the best way to introduce the chairmen of the two education committees to the dynamics of the school improvement market. But school improvement providers are the victims here, not the perpetrators, and our trade associations could turn this into a positive. They should stay out of the "reading wars" and cast the story as one of arbitrary and caprious regulation by biased officals. Kennedy and Miller seem primed for that interpretation. EIA, NEKIA and others should be taking advantage of their predisposition.   more »

Whatever you think about Fordham, its people, or their policy views - you have to admit their April Fool's issue of the Education Gadfly is funny. The more inside baseball you know the funnier it is - so it can even be read as an annual test of expertise in the Washington politics of school reform. As someone who habitually forgets the significance of April first until he is halfway through the issue, your editor can testify that these guys are very clever.   more »

The turmoil continues....   more »

This is not the first time Kennedy, Miller and the other senior Democrats who lined up behind NCLB I have said as much. It will not be the last. It is the major strategic choice facing the administration. Provide the funds and it wins on the margins of all or most of the technical issues affecting the school improvement industry. Fight Kennedy and Miller on resources, and every one of these technical issues becomes a little battlefield. The opposition has no end of resources to fight every one of these small engagements, the school improvement industry cannot fight one on an equal footing. And with the war in Iraq moving from $2 billion a week to $4 billion, surely NCLB can be fully funded within a month without any meaningful impact on the federal deficit. This industry's most important interest lies with the law's accountability provisions - indeed on the budget front school improvement providers share an interest with the Democratic leadership. More money for NCLB is potentially a larger market for our firms, but without tough accountability provisions the industry will never see the money.... NCLB authorization for appropriations is the subject of next week's Letter From The Editor in New Education Economy®   more »

There is no escaping the need to demonstrate program efficacy, and that the bar constituting "proof" will be going up. Firms that have not made this a priority have no future in the market for school improvement services. Firms that are commited to demonstrating superior performance should be gathering as much insight into the subject as they can. The National Center for Education Statistics - part of the Department of Education's Institute for Education Sciences - is part of the interagency mix that will be setting the bar. It offers a variety of free/low cost resources for evalution, including training. Every firm should be sending people to these activities - for a variety of reasons, but at a minimum because this is an open door invitation to the world of k-12 evaluation - and your profitability is affected by the rules this community will set.... One last point. If you look through the one training opportunity given as an example here and you can't think of anyone in your firm you can send, or even a close advisor or consultant - you have a staff capacity problem you need to fix. If you are an investor reading this and ask your CEOs who they might conceivably send to this kind of a session and they don't have good answers - you have one or more management problems.   more »

Sometimes philanthropy is helpful to the point of buying our programs for schools. At other times, philanthropic intiatives compete with school improvement providers by offering districts "free" programs. At other times, they complicate the lives of firms with classroom initiatives that conflict with the specific kinds of support and cooperation providers need from their "partners" in the central office and classroom to achieve superior program results. In this case, how will the Kellogg Foundation]s $10 million grant to improve reading skills in Hawaii affect schools implementing America's Choice? Every, providers' local managers need to keep track of these "school reform" initiatives, so they don't come as a surprise degrading implementation and hence expected student outcomes.   more »

Here in the U.S., LightSpan - now part of PLATO, used the PlayStation system for a program sold into the Comprehensive School Reform Demonstration Program market in the late 1990s. Not only did it leverage existing home gaming technology "simple enough for parents," but it deliberately engaged them in their children's education - building a level of parent support for a classroom-based literacy program this writer never saw before, and has not seen since. Can Sony repeat this?   more »

Could private contractors do better than the state in operating juvenile justice detention and education? If there was ever a time to make the proposal for a pilot project, this is it.   more »

The distinction between the providers district like and dislike has very little to do with tax status, and almost everything to do with whether the provider competes with them for students or works for them with students. The school improvement industry needs the competitors to motivate the districts to do things differently - including buying the new providers' programs. But most individual school improvement providers will be far more profitable working with districts as partners than against them as adversaries.   more »

This story is relevant less for its specifics than to illustrate a more general point.... Every human endeavor attracts sub-par performers. Some are incompetent, others cut corners when financial circumstances get tough, some are thieves. If the measure of merit for charter schools is media coverage, all of these losers are the stars. When the least capable providers get all the attention, everyone else suffers the consequences of tighter regulation, abandonment by political fence-sitters, and the loss of public trust.... In most fields the quality providers recognize their shared interest in separating themselves from the riff-raff. They form membership associations to protect their interests and advance their industry..... Charter schools have broadly-based state membership associations. Their national advocacy organizations are controlled by philanthropy, run by policy wonks, and have their own internal dynamics and agendas..... The charter schools' committed to quality need a national voice they control, with a code of conduct, peer review, and standards of operation - indeed a "brand" that distinguishes them from the pack. If 300 independent quality schools invested $1500 each in such an organization, they could make a start - with a spokesperson in Washington and a few young staffers to make their case and respond to stories like this.... The only other point worth mentioning about this story is that if a charter school deliberately misreprsents enrollment, the motivation may be larcenous, but it may also be one of those moral shortcuts taken to keep a school from insolvency. The act is a crime in both cases, but if per pupil payments to charter schools were equitable these stories might only be about the crooks. c   more »

The downloadable scorecard put together by Title I Online is worthy of review, although the experts surveyed do seem to be conflating what they want with their predictions. Astute readers will pay more attention to the overall pattern of converging and differing opinions.   more »

The Oregon Department of Education gives a bit more of its story on the dispute with Vantage, and hires nonprofit research organization AIR (American Institutes of Research) for next year's TESA administration.... The corporate website of Vantage Learning lists no press releases on the dispute. To paraphrase George Bush I, that decision "doesnt seem prudent."... Vantage counsel did speak to Education Week Reporter Andrew Trotter, but make note of the reporter's decision to cast the story as Vantage "leaving the state in the lurch" rather than, say, "being denied $4.7 million dollars in payments owed by the state." Both characterizations tend to prejudge what looks to be a legitmate business dispute - complicated by the end of a multi-year contract and Vantage's failure to win the new competition. But the underlying issue is now a matter for the courts. In the American legal system the facts and the law here are not decided but in dispute, and it is a bit unfair for Education Week to permit one of its reporters to pre-judge Vantage as straight reporting. The more legitimate place for this opinion is an Op/Ed page.   more »

Investing in k-12 with a superficial understanding of its political history and landscape will yield about the same results as invading Iraq without a deep appreciation of Islam's varied influences on the nation's ethnic make-up.... Your editor's March 28 presentation to the Education Industry Investment Conference.   more »

Listen to this week's "Letter From the Editor" from New Education Economy®   more »

Create a Reader Account to download this week's professional reading. Free until June 1.   more »

150 new grant and contract RFPs for organizations helping to make public education better.   more »

Caveat Emptor: One should take the attached pronouncement from an investment banking firm that helped take Educate (including its Supplementary Educational Service provider Catapult Learning) private, on a compilation of largely anectodal and qualitiative "good news" items prepared by the Education Industry Association, on behalf of its members in the SES business, and labeled as a "report" - with a grain of salt. It's just a bit self-serving all around. Frankly that assessment is preferrable to one that says Signal Hill is naive about the political risks associated with SES as part of NCLB, as implemented by the states, or as received by school districts, to say nothing of the considerable cost and other advantages that accrue to local providers able to risk very little while leaping exceptionally low barriers to entry. Asserting that SES "has always been among the most popular aspects of the law, and arguably the most secure" is a flight of fancy. At this time of NCLB reauthorization there is a good policy story about SES to be told, and spinning it as PR makes it that much harder to tell. And if that story isn't told?... Well there are thousands of ways in NCLB to make SES an unattractive investment. Please, let's stop acting like Pollyannas, get serious about facing the political risks in our market, and start talking about how we intend to work towards managing them.    more »

It is clear why the California School Boards Assiciation opposes the idea. It hopes to constrain competition with traditional public schools. San Diego has decided that charters are here to stay, and if it hopes to compete, it must focus on running traditional schools better. But why should we believe that multiple chartering authorities prompt a "race to the top" for quality, when in every other sphere of policy they generally start a race to the bottom?   more »

What the informed public is reading about our market this morning. Will the take-away be: "this may be a useful program, I hope it gets cleaned up" or "if the states like it, it must be ok, so what's the problem" or "if the education bureacracy likes it, it must be a boondogle" or "it must another example of private sector corruption in that Bush Administration (so let's throw the baby out with the bathwater)." Will education industry associations say or do anything to push the informed reader towards the first conclusion? Surely the Times would give them an opportunity to comment on this long running story. (One additional polint: it speaks volumes about our industry when a cabinet Secretary can get away with "no comment" about multiple investigations into the efforts by officials in her department to steer contracts away from certain providers and to others they happen to favor - based entirely on their own judgment of efficacy.)   more »

Free when you sign up for a Reader Account   more »

The "slippery slope" begins here.... Give in on this issue, and where will the gutting of NCLB end? Virginia's moderate Senators, Democrat Webb and Republican Warner, combine against the Bush Administration on inclusion of ELL students in AYP and school/district accountability for failure. They are joined by a good part of the northern Virginia House delegation. Not a good sign. Forcing (yes, forcing) districts to bring ELL students up to basic proficiency quickly doesn't hurt those students in the least. It does demand that districts move the education of these students to top priority and necessarily disrupts old (comfortable) routines and resource allocations. Please note: this is the point of NCLB - not an unintended consequence! Someone needs to explain that the louder the protest, the greater the sign that the system is being forced to do something it does not want to do (rather than something that is impossible to accomplish), and that therefore the law is working. The Senators need to ask themselves: 2) Who is supposed to benefit from the law - the underserved student who needs to learn English well and fast, or the school district administrator who has managed a system that has never been inclined to serve these kids all that well? 2) What's the evidence on how quicly ELL students can be helped to reach state standards - and under what programs?    more »

A story we overlooked - Vantage cancels contract in billing dispute but keeps working with state, then its testing system gets overloaded and fails. Bad news for Vantage. Lessons Learned: No good deed goes unpunished? Nobody wins but the lawyers?   more »

This week's review of announcements from organizations researching school improvement and evaluating its programs.   more »

FYI   more »

Testimony of Allan Olson, Co-Founder and Chief Academic Officer, Northwest Evaluation Association, before the House Education Committee. This approach seems quite consistent with NCLB's intent, but may be beyond the capacity of most states and districts for many years. Still worth understanding.   more »

No surprises, but for the record....   more »

From the March 21 House Education Committee Hearings. A start to gutting NCLB's key provisions - the calculation of AYP and the consequences of failure. Complex measures of performance are the fastest route to the return of an unnacountable system. Simple measures - profit for firms, student performance for schools are admittedly harsh, and leave out important values of society, but they do get at "the most important thing." If a company is not profitable, it doesn't matter that it has a great day care program. If a school can't bring all of its kids up to the basic standards of proficiency measured by the low hurdle of most state assessments, it doesn't matter much it has a great schoool climate. Organizations that cover meet the most important measures are in the best position to do the rest.   more »

Perhaps the strangest of bedfellows join forces on literacy.   more »

State rules governing the adoption of instructional resources favor textbooks. As such, they constitute one of the most important barriers to entry facing school improvement providers who deliver their content by other means. Changing the rules in California will go a long way to level a playing field that artificially favors a handful of huge publishers.   more »

This week's comprehensive listing of announcements from inside the Beltway.   more »

Other things being equal, and at a time when the Administration spends (wastes?) over $2 billion a week in Iraq, the school improvement industry's interests lie with the Democrats and a larger budget for k-12 This is especially true if more money is the price of an NCLB II with the teeth of NCLB I - but not if that money is fenced off for smaller classes. Schools should be able to deploy the bulk of federal resources as they see fit to meet AYP.   more »

What the heck was this all about? A slip in judgement, a legitimate difference of opinion on the law? The merits of the case aside, this kind of dispute never sends good signals to the troops about how civil sevants regulating a market must avoid even the appearance of a conflict of interest. And, in a town that never forgets a slip-up, it's not going to reflect well on the former Deputy's sense of proportion.   more »

First state-wide distribution of unitedstreamingplus. Question: Does this pre-empt or complement potential district-level sales of similar content?   more »

Pre-K's Title I   more »

From the press pages of the hundreds of providers we cover, hotlinked to the source. If your firm isn't here - it should be. Let us know, so we can initiate coverage.   more »

Buy Rating.   more »

This was not the best week for several public firms in the school improvement industry.   more »

Delayed SEC filing and finance staff turnover - chicken and/or egg?   more »

K-12 is not a core business for card company   more »

Our Industry's Interests in NCLB II: (I) Understanding and Influencing Legislative Intent   more »

A school improvement company betting on "true research-based solutions."   more »

If student performance matters to the state of California and the state's press, why do OFY's outcomes get less attention than its' financial disputes with the state?   more »

An up and coming assessment competitor?   more »

In a move emphasizing "category management"....   more »

Just before going private, Edison purchased urban EMO LearnNow - the first EMO founded and managed by African-American executives - and put on a full-court press to win school management contracts in Philly and nearby Chester-Upland. Both were moves to gain "street-cred." The purchase of LearnNow to impress Philly, the school contracts to impress Wall Street. They were insufficient to keep Edison a public company. But the now privately-held firm put so much of itself on the line in Philly that it is hard to see how it can rebuild confidence with public education buyers of its services if it is seen to fail here. A rejection of Edison by its former champions - Vallas and the SRC - can only be bad news. (And when Edison "catches cold", the rest of the school improvement industry is "starved" for investment cash.)   more »

Download this week's features, commentary and editorial.   more »

Charter Management Organizations are latest education reform trend to be surfed by venture philanthropy.... The Gates Foundation and others have committed $65 million to CMO KIPP for 42 new charter schools in Houston. At over $1.5 million per new school, and with an ongoing need of $1000 per student per year from philanthropy, it is not a scaleable model for the charter movement as a whole - and the opportunity costs in terms of the stand-alone charters that will not be formed - and could be formed for far less - are huge. It is also incredibly suspicious that literally none of these nonprofit CMOs reveal their business plans, financial models or detailed operating statements.   more »

The story is Dallas, but it could be pretty much every district in the country.... The Reading First fiasco illustrates how hard it will be to cut through the instutional glue holding the large publishers close to state and local education agencies. This is a story about how hard it is to break up cozy relationships at the other end of the centrally-managed state enterprise that public education remains. Separating district managers from insider relationships with their local colleagues is no less important to the development of a real school improvement industy. On both ends of the system - top and bottom - it is time to change government procurement law, regulation and practice for school improvement services so that quality trumps marketing.   more »

But is the policy mere rhetoric for Tallahassee, or matched by real reporting systems back at the central office? Is there a "strategy-to-tasks" plan? Are the district's middle managers accountable in a meaningful way? Or is it just another funding presentation? And what happens if the promised performance does not materialize? When Crew promises to resign without severance if his goals are not met, then maybe there's a proposition worth taking at face value..   more »

This Week: 160 new federal, state, and local RFPs   more »

Not even a comment in response to the CEP report from EIA's Exec Director and SES defender Steve Pines? Didn't EIA just put out its own report on SES at last week's Washington meeting? Get the gist of the CEP report in this week's New Education Economy®   more »

Another conflict of interest case. School districts do a great job of complying with "input" requirements, a terrible job meeting "performance" requirements, and drag their feet or ignore "process" requirements. LAUSD just never manages to find space for charter schools, despite having it and/or the money for it, and despite the law.   more »

No, it's not K12, but what is it about these schools that attracts investigative reporting? In this case it is - yes, conflicts of interest. At least as important, what are the quality virtual providers doing to improve the perception of their industry segment?   more »

No matter how promising, and despite the fact that it is hard to entice people to join a lame duck President - sinking fast in eyes of everyone who matters to NCLB reauthorization - this is not the right time for a Kerri Briggs. The Secretary and the President should be moving heaven and earth to find someone with gravitas to help with the very heavy lifting they face. The decision to move Briggs forward is a warning sign of the Administration's weakness.   more »

RMC is a partner in the Northeast Region and Islands Regional Laboratory. "Conflict of interest" was written all over the Department of Education's contract with RMC for support of Reading First, and in flashing neon. The fact it was approved suggests that officials far more senior than Chris Doherty did not review the contract, did not understand the meaning of the term, or did not care. None of these options is acceptable. At the heart of market regulation in a free society is the notion of a level playing field - unbiased application of the rules. The Reading First fiasco underlines how far the Department has to go before it can claim such competence. From the enclosed article - Richard A. Allington, past president of the International Reading Association: “The e-mails between (former federal Reading First Director Christopher J. Doherty and G. Reid Lyon, the former chief of the reading-research branch of the National Institute of Child Health and Human Development) illustrate that at least these two people knew which consultants/reviewers were ‘appropriately’ aligned with their vision of Reading First…. And they knew they should mask any overt ideological moves to name people or products (as evidenced by their e-mails to each other on this very topic). Are we to believe that [they] didn’t know about the conflict of interest with the center directors and consultants?” The I.G. reports only went so far into the matter. Congress needs to go deeper into the details and higher up the food chain. And the school improvement industry - the firms that truly care about results trumping marketing budgets need to get behind the injured organizations.   more »

Two Points: 1) K-12 education's key teaching and learning functions are opening up to private sector involvement. The system is moving from a vertically integrated state-run monolith to more of a market. In this transition, each of the organizations holding a lab contract will have to decide how many sides of the buyer-seller-regulator-evaluator table it can safely occupy. None can hope to "do it all" and do any well - legally, ethically, or professionally, or as a matter of internal culture. As lab contractors decide whether they fit in the emerging market, expect a sorting out of roles and functions by each over the next three years, with units shed and acquired - maybe even traded, staff leaving to form new enterprises - possibly spurred by inevitable conflict of interest complaints. 2) The Department of Education is hoplessly tangled up in dealing with this market transition. It wants "quick and dirty" and "scientifically-based" from the same organizations, and arguably in the past most have not done either. It wants program evaluation but it also wants the dissemination of best practice - and that's a recipe for conflicts of interest. The right approach? One function, one contractor.   more »

By now it should be abunbdantly clear that saying you are "for NCLB" says as much about your position on federal k-12 policy, as saying you "support the tropps" does about your position on the war Iraq.   more »

A policy advocacy group adds important school improvement industry firms. But this is also another example of our industry's balkanized policy and advocacy efforts.   more »

One down, how many more to go?   more »

When school contracting is based primarily on the political need of a district to demonstrate "reform," the primary risk to the revenue stream is "poltical risk."    more »

The value-added of vitual education makes it an unstoppable force in the school improvement marketplace. Two question: 1) Is that market structurally fragmented or subject to a roll-up - now or ever? 2) Once some of teaching and learning is separated from the public school building, how long before other "outsourcing" of the function will become accepted practice?   more »