An article in a publication called “The Financial Investigator” took a close look at K12, the for-profit online “education” corporation whose growth had made it a darling of Wall Street. The article paid particular attention to the “churn rate” at K12 online schools. That is, how many students left in a given year. In the Ohio Virtual Academy of K12, a staggering 51% of students turned over in a single year. That helps to explain why the name of the game for the for-profit online academies is recruitment. So long as the corporations can keep their numbers up, they will collect tuition money from the state, usually double their real costs.
The more the for-profit academies churn, the more they earn. And every dollar they collect comes right out of the public school budget. In Pennsylvania, where nearly half the school districts are in financial distress, the diversion of dollars to for-profit academies is harming the great majority of children who attend regular brick-and-mortar schools. And bear in mind that the online charters–whether they are for-profit or not–get terrible results.
Last week, I had a debate about education entrepreneurs on Twitter with Justin Hamilton, the press secretary for Secretary of Education Arne Duncan. I made clear that I was referring to for-profit schemes like online academies. I am very dubious, no, actually, I am opposed to spending taxpayers’ money on for-profit education management organizations or for-profit charter schools. I kept pushing Justin to say that he agreed, or the U.S. Department of Education agreed. He would not. They choose to stand silently by while corporate suits target children as profit opportunities.
It seems to me that the U.S. Secretary of Education should denounce for-profit education. It wastes money; it supplies bad education; it gets terrible results. But as we have seen in relation to for-profit higher education, high-priced lobbyists work Congress and state legislatures to protect their industry. For-profit higher education is a $30 billion industry, and it has the wherewithal to call off the regulators.
As the expose of K12 in the New York Times reminds us, the highest goal of for-profit corporations is profit. Not education. Not the development of young people. Not character. Not the good of society. Profit.
Diane
Diane Ravitch's blog 
In a state where crony capitalism is the system we can be rest assure that the benefit of the public will be the last concern. we have witness many years of endless cycle in which blank checks were and are handed to clueless unaccountable tyrannies. Those corporations come every year with “the next thing”, which is yet another magic to solve education problems. Usually those ideas are old ones with new shining packaging or just obvious. Most of the ‘for profit’ products have been proven as gimmicky, all decorated with the newest buzz words from the -failing – business world. the products they sell us are harmless at best. But at the same time they have efficiently depleted the public education funds.
Yet crony capitalists like Bloomberg are more then happy to repeatedly ignore any sound research and to transfer more wealth into the same wealthy hands. After CityTime scandal – where the city lost half a billion dollars over ten years by a fraudulent contractor – NYC council tried to pass a law that would limit the ability to outsource contracts from city’s departments to an outside contractors. Bloomberg vetoed this resolution, fearing that public money will no longer stream away unchecked from the public to unaccountable corporations.
Another example is the ‘for profit’ colleges that were caught deceiving students regarding their prospects,and defrauding the government using fraudulent attendance list, in order to steal billions from the tax payer for many years. They seem to be unfamiliar with words like ‘education’ or ‘students’, but well aware of ‘profits’.
The beast of the educational industrial complex – reluctantly using the term ‘education’ – has life of its own and it profits politicians who make sure the beast is highly profited. The only ones who are not being considered are the people who pay for this fraudulent cycle and suffer the results of this game with a failing educational system. This mechanism guarantees failure and encourages “professionals” like Dunkan to push for even more privatization. Don’t think that health/defense/ financial systems are any different.
“For-profit higher education is a $30 billion industry, and it has the wherewithal to call off the regulators.” Exactly. DoEd will reform (translation: eliminate) OSEP’s compliance procedures assuring IDEA and special education IEPs are effectively working for children with disabilities. OSEP director Melodie Musgrove told us at the Council for Exceptional Children’s international convention (CEC) in April, 2012 that they will be monitoring “achievement data” (translation: standardized test scores) from Washington and cutting back on state compliance officers (translation: firing). Her “vision” for OSEP is “results driven accountability” and to “reward teachers who work with sped students.” (translation: TfA exploiting the SPED teacher shortage).
OSEP’s shift from compliance to monitoring sets back 40 years of special education progress in assuring all schools provide a free appropriate public education for children with disabilities.
Musgrove signaled that DoEd and OSEP would essentially ignore IEP violations.
This is a huge gift to the for-profits. Shifting away from school compliance on IEPs means schools will not be accountable to parents or teachers for providing individualized educational services. You know, all those expensive services like smaller class groupings, collaborative teaching, inclusion, transportation, psychological support, speech therapy, OT, PT, etc. that the profiteers don’t want to pay for.
Musgrove said we could call her anytime a 205-245-8020 or e-mail her at melody.musgrove@ed.gov. She added, we might not like what we hear…
[…] churns kids for profit Post on May 29, 2012 by Rob Schofield No Comments Cross-posted from the blog of national education expert Diane Ravitch: “Profits, Not Better […]