This is an interesting article by Jonathan A. Knee of the Columbia Business School about the perils of making a profit in the education sector. I note that he has a book coming out, fleshing out his case studies and arguments about for-profit investing in education.
Knee describes the many visionaries who saw the possibilities of transforming education into a for-profit bonanza but lost their shirts.
Earlier this year, LeapFrog Enterprises, the educational-entertainment business, sold itself for $1 a share. The deal came several months after LeapFrog received a warning from the New York Stock Exchange that it would be delisted if the value of its stock did not improve, a disappointing end to the public life of a company that had the best-performing IPO of 2002.
LeapFrog was one of the very last remaining of the dozens of investments made by Michael Milken through his ambitiously named Knowledge Universe. Founded in 1996 by Milken and his brother, Lowell, with the software giant Oracle’s CEO, Larry Ellison, as a silent partner, Knowledge Universe aspired to transform education. Its founders intended it to become, in Milken’s phrase, “the pre-eminent for-profit education and training company,” serving the world’s needs “from cradle to grave.”
Knowledge Universe businesses included early-childhood learning centers, for-profit K–12 schools, online M.B.A. programs, IT-training services for working professionals, and more. Milken’s penchant for secrecy makes a comprehensive assessment impossible—most of the businesses were privately held and some were sold to private buyers for undisclosed sums. But of the companies about which there is public information, most, like LeapFrog, ended badly. Education remains untransformed.
Milken was far from alone in the belief that education could be revolutionized through radical new business models. In 2012, the media mogul Rupert Murdoch and the former New York City schools chancellor Joel Klein established the Amplify division within News Corp. At the time of his initial investment, Murdoch described K–12 education as “a $500 billion sector in the U.S. alone that is waiting desperately to be transformed.” Their idea was to overturn the way children were taught in public schools by integrating technology into the classroom. Although inspirational, the idea entailed competing with a series of multibillion-dollar global leaders in educational hardware, software, and curriculum development. After several years and more than $1 billion, with no serious prospect of ever turning a profit, Murdoch and Klein sold their venture for scrap value to Laurene Powell Jobs, Steve Jobs’s widow, last year.
Professor Knee does see a role for for-profit businesses, but it is on the margins, not as school operators.
Frankly, the scariest for-profit ventures are the tech companies that hope to replace teachers and schools with their “scalable” models.
If the subject interests you, as it should, you should be sure to read Samuel Abrams’ Education and the Commercial Mindset, which documents the Edison Project disaster.
I continue to insist that education is a social process. I do not see how to commercialize such a thing other than to sell credentials, which is already done. In other cases, great deal of money is made selling tickets to spectators but watching someone get educated is about as interesting as watching paint dry, so that is not an option.
All of the business eduformer-types are barking up the wrong tree. They are drooling over the pile of cash spent every year on K-12 education and thinking about how they might capture it, rather than trying to figure out how to best serve their clients.
I believe it was an Edison charter school in Baltimore where, as a Teach for America temp, Michelle Rhee taped the mouths of 7 year olds because she wanted to shut them up when they walked down the hallway to lunch –and she said their lips bled when the tape was removed. As far as we know, she was not disciplined for that blunder and, subsequently, she fell up to become Chancellor of DC schools…
‘Nuff said about Edison’s worthwhile demise.
Tech entrepreneurs frequently fail because they focus on the bells and whistles of technology without understanding how children grow and learn and without understanding any of the cognitive, social and emotional aspects of the learning process. They may be able to market their product, but it may fall short because a steady diet technology becomes tedious and dull. I remember going into the language lab in college, and there was a collective sigh from the students entering. The boredom was so thick you could cut it with a knife. The most effective learning, I believe, is engaging, connecting with ideas and other people. Humans are much better at the big ideas that do not involve the type linear learning most suited to technology. Learning is much more than stimulus and response behaviorism. The most effective use of technology is when it supplements, not supplants human teachers.
Choice has failed in New York City. See
Seminole post! Lack of profitability seems to me the one and only fact that could dissuade the corporate reforminess operators. They never cared about education, but they always cared about market share data analytics. They’re ruining city and state credit ratings AND losing money? Good.
The sad thing is nobody seems to care about all the money wasted. Nobody seems to care that using young people as guinea pigs is unethical. Young people attend school to get an education, and flawed experimentation wastes their time and interferes with their right to an education.
Dang autocorrect! Seminal post.
Reblogged this on David R. Taylor-Thoughts on Education.
Do Bill Gates and Walton heirs seem like they are the types of people who would be satisfied to be “on the margins”? Take a look at Gates-funded Frontier Set and the Center for American Progress’ plan for “transformation” of college accreditation (Forbes, Nov. 2016, “It’s Time for a Quality Alternative to College Accreditation”), which was co-written by a former employee of Gates-funded New America.
Dr. Knee should read the plans of Gates’ Impatient Opportunists and answer the question, will appeasement at the margins, work.
“For-profit Education”
Profiting from schools
Like profiting from air
And only crooks and fools
Would ever venture there
Which, of course, explains Michael Milken’s involvement.
How anyone can write an article about Milken and schools and not even mention Milken’s felony conviction is an utter mystery.
Erosion of democracy is the result.
A planned news platform from Wikipedia’s creator claims its reports will be based on evidence. Identifying the background of Milken, the funders of Fordham, and DFER/Gates/Walton heirs’ involvement in privatization (omitted by Media Matters) would be a start to journalism based on evidence.
I hope the new site, “WikiTribune” will live up to its promise. If they do, the 90% should abandon the bias of current news outlets.
I guess I should not be surprised that someone from Columbia Business school would not even mention Milken’s criminal background.
That’s probably just considered business as usual at Ivy league business schools.
Indeed, SomeDAM Poet, it would be incredible, if it wasn’t so predictable.
The NY Times recently had an article about how Joaquin “El Chapo” Guzman, a Mexican drug cartel leader currently jailed in a federal prison in Manhattan, is attempting to call attention to the awful conditions he and his fellow prisoners are being subjected to, describing them as human rights violations.
But poor El Chapo is barking up the wrong tree. If he wants to get out of jail and rehabilitate himself in the public eye, he should instead bankroll a chain of charter schools, and, like Milken, he can be miraculously transformed from felon to “philanthropist.” Just imagine the facilities those schools could have!
How does CIPP (Cocaine Is Power Program) sound?
And talk about no excuses! In this school, students who don’t “track” the teacher at all times, talk in the lunchroom and show sufficient grit aren’t just suspended and counseled out, as in those namby-pamby US charters, but instead are beheaded by their classmates. Now, that’s the peer pressure effect!
Education should NEVER be a FOR PROFIT enterprise. DUH…those deformers are in this for $$$$$$$ not anything else. Tyranny of the Corporations is well and alive in this country. Ka-CHING!
“Frankly, the scariest for-profit ventures are the tech companies that hope to replace teachers and schools with their “scalable” models.” Diane Ravitch.
Yes. Computer-based Education (CBE) is being marketed as personalized when it is exactly the opposite. Legislators in Ohio and elsewhere are counting on CBE to produce a radical reduction in brick and mortar schools and the need for educators who have college degrees and professional credentials.
CBE is part of the reason that we states are trying to install student-based budgets as the norm for schools and districts. Accountants are dissecting a district’s budget so costs can be allocated to specific schools, then to courses and grade levels in the school, including each teacher’s salary with benefit package, and the estimated cost of educating an individual student to a specific standard of mastery, given the student’s SES characteristics and the like. These estimates would take into account local revenues, the value of federal and state funds (usually less than 12% each), and so forth. The aim is to lay claim to CBE as the “best bang for the buck” while pointing to a system that “objectively” monitors student mastery of pre-determined content (delivered by computers).
Here are two maps that show the rapid uptake of CBE as if it is the new panacea for education. Look beyond the maps for excellent research on how CBE is being marketed.
Here you will find amazing and disturbing stats and graphic illustrations of some interlocking initiatives, all designed to have a rapid and “collective impact” on the educational landscape. https://seattleducation2010.wordpress.com/2017/05/02/knowledgeworks-the-every-student-succeeds-act-essa-and-the-push-for-competency-based-learning/
The Gates Foundation is investing in a program that would train adults to serve as “providers” of CBE, therby eliminating the need for state certification to teach. In fact the whole CBE movement is aimed at “deschooling” education. That requires demonizing place-based brick and mortar schools and grade-by-grade instruction as part of the antiquated lock-step factory model.
The International Association for K–12 Online Learning (iNACOL) aims to expand access to online formats for learning, with mobile phone access for some programs. See especially their publications calling for “innovation zones” that would provide for “competency-based, personalized learning” free of brick and mortar schools.
“Policy makers establish innovation zone authority or programs through legislation or rule-making to catalyze the development of new learning models. The innovation zone authority provides increased flexibility for a state to waive certain regulations and requirements for schools and systems beginning to plan, design and implement personalized, competency-based education models. Innovation zones offer state education policy waivers in order to support practitioners in the process of developing and implementing new learning models. As practitioners implement their models, any rules or regulations that impede the model development are brought to light and can be addressed through waivers in a state, which has provided such innovation zones. This shifts the role of the state agency from one of compliance enforcement to support in enabling new model development to occur in districts.”
iNACOL lists the states with favorable legislation: Arkansas, Colorado, Kentucky, Mississippi, and New York. INACOL is supported by the The Bill & Melinda Gates Foundation, Nellie Mae Education Foundation, and The Walton Family Foundation. http://www.inacol.org/resource/innovation-zones-creating-policy-flexibility-for-personalized-learning/
The work of iNACOL is closely connected with the National Repository of Online Content (NROC). NROC Project is a non-profit network focused on “college & career readiness.” It is funded by the Bill & Melinda Gates Foundation, Hewlett Foundation, and NROC institutional members. Members provide multi-media content and applications to websites like HippoCampus (six sources of online content in Math, Science, Social Studies, English and Religion) and EdReady (math to prepare for commonly used placement exams, such as AccuPlacer, Compass, SAT, and ACT). Membership in NROC keeps costs low for institutions, and free for individuals. NROC operates under the umbrella of The Monterey Institute for Technology and Education (MITE), a 501(c)3 non-profit corporation founded in 2003. MITE is staffed by three people. Taken as a group, they have worked for McGraw-Hill Education, CTB/McGraw-Hill, Harcourt Brace, in addition to having experience in corporate training, media, and financial management. MITE has received $16.2 million from the Gates foundation.
Although it is wise to keep attention focussed on the damage to public education being done by charter schools, vouchers, and the standardized testing requirements in ESSA, I think the larger threat to public education is CBE. Venture capitalists are investing in educational management systems and apps galore. KnowledgeWorks.org markets CBE as teacher-free, learner-centered education organized by playlists of “opportunities for learning” with for-hire “sherpas” to guide students on “learning journeys.”
So far, there is very little discussion of the Trump/Republican roll-back of privacy regulations that once applied to internet service providers. There is little discussion of the prospect that this administration may eliminate the principle of net-neutrality in delivering content. The former means that student privacy (already thin and fragile as a moth’s wing in school contracts) is open to confabulation by personal/parental choices of products and services. The latter means that the speed and cost of internet services, including the e-rate program for schools, may become strictly market-based–supported by ads or other pay-to-play schemes.
CBE promoters see education organized in an ecological landscape with informal learning centers (for working parents), abundant on-line resources; opportunities for learning via community organizations such as art museums, libraries, parks, zoos, courts; and local businesses/workplaces.
Each of these providers of education would offer a badge or credential symbolic of learning The badges or credentials are “stackable” so students who may verify their competencies as needed in seeking a job or advanced education. There is not much talk about the actual costs of CBE, the shelf life of hardware, the quality of on-line instructional materials, and unlimited possibilities for commercial exploitation of children and their parents. Choice through vouchers and CBE are perfect partners for creating the illusion that all children can and will have access to the best education in the world and completely personalized.
I hope communities and parents do not fall prey to Gates’ arrogant vision. Gates is manipulative, and he uses his bottomless funds to entice and extort communities to buy into his unvetted plans for their children. School districts should consider that Gates has crashed a burned several times. Just because Gates is wealthy does not mean he has the best interests of young people as a priority. His main goal is to destroy public education, bust unions and profit. There is nothing personal about personalized learning.
Thank you, Laura, for such a comprehensive listing of all we must be vigilant about.
Diane, I hope you will consider posting Laura’s comment as its own post to make it easier to reference.
Agree.
Agreed.
Yes, Diane, please post Laura Chapman’s important contribution as a solo post. Laura, thank you for your ongoing vigilance and cogent analysis of where education is heading at light speed. The big standardized test is a false flag. It will soon be gone, to be replaced by ongoing assessment on digital devices. By that time, CBE/PBE will be encoded in law across our nation. We already have it here in Maine thanks to a big push by Nellie Mae and other corporate so-called “non profits.”
Thanks Laura. It is important to draw attention to changes being made with respect to “student-centered” funding. Groundwork is being laid to move to widespread use of Educational Savings Accounts and virtual wallets for “out of school time” and “cyber learning” opportunities. I would say within 5-10 years blockchain “smart contract” infrastructure will allow the seamless distribution of public funds into learning ecosystems. And the beauty will be that the ledger system will have the capacity to feed back student data and program expenditures to provide “efficacy” metrics designed to serve global finance’s “pay for success” social impact investing markets. You rightly note that Nellie Mae is a player in this game. I have been looking into their philanthropic activities in New England. The 2014 grant below is an example of the type of work they are funding now. Note that “student-centered” is code for so-called “personalized learning” that happens online or via community-based partners:
RENNIE CENTER FOR EDUCATION RESEARCH AND POLICY
Grant: Roadmap for Reforming Massachusetts School Finance System
Initiative: State-Level Systems Change
Date Grant Awarded: 4/30/2014
Location Served: Cambridge, MA Rennie Center for Education Research and Policy
As Massachusetts’ preeminent voice in public education reform, the Rennie Center creates open spaces for educators and policymakers to consider evidence, discuss cutting-edge issues, and develop new approaches to advance student learning and achievement.
Project Description:
This project will create the basic knowledge/data infrastructure for a comprehensive re-examination of the MA education funding system. The project will include Student-Centered Learning strategies as part of what should drive an effective funding system designed to support schools in offering every child a real opportunity to learn and thrive.
Wrench in the Gears. You are doing amazing work on computer-based everything in education. Your graphics help to explain the interlocking directorates and efforts of for-profits and non-profits to have a “collective impact” on all aspects of education. The overall aim is to de-school education while keeping funds that will follow the student and the choices made on their behalf by parents/guardians.
I know that kindergarten students are being issued digital cards that can be “read” by holding up them up to a computer or iPad.
Each card enables access to data on who the student (user) is and can “populate” a larger system with student-specific information about the apps the student has accessed, dwell time on the app and parts of it, paths that signal learning, and so on–all in game like-formats that do not require students to know the alphabet, how to spell their names, or use the keyboard for writing. I do not doubt that these cards can be designed much like a debit card for older students to “buy” products and services that claim to be educational.
My physicians have this kind of card to verify they have access to the computer system and data warehouses (now in the so-called cloud) where my medical history is stored.
I do not yet understand the blockchain technology, but the claims for extraordinary privacy, security, and a “forever memory” are really scary, especially in tandem with developments in sentiment analysis, artificial intelligence, and other analytic incursions into transient and idiosyncratic experiences
The Milken and Murdochs of this world that attempt to profit from children by milking public dollars while destroying the community-based, democratic, transparent, nonprofit, traditional public schools will blame the failure of their flawed agenda on teachers’ unions and teachers. It will never be their fault. It will always be those allegedly incompetent, greedy teachers that wanted to earn a livable wage and have health care.
In time, historians will prove that Milken and Murdoch (and the rest of the corporate pirates) were the incompetent greedy psychopaths, and teachers were the professional who struggled to educate the children with empathy.
Agree. History, if written truthfully, will condemn the Wall Street leeches for making education an industry, the wealthy, bored dilettantes of education like DeVos, Doris Fisher and the widow Jobs, tax robbers from tech businesses and, the Gates’ army of mercenaries.
Off topic- Color of Change asks for signatures on a petition denouncing Eventbrite “for selling tickets to white supremacist events”.
Do not get me started on Amplify – Burst. Last summer, after school was out, I helping the principal in the bookroom, and as a side note, she told me what our district (two high school district) spent on it. I shudder to mention it here. One mid-level admin got them to quit the program -the teachers at the three tryout schools could not bear it any longer.
Let me repeat: Good teaching is hard work, professionalism, and compassion. You cannot get those off a screen.