Bob Herbert Explains “How Millionaires and Billionaires Are Ruining Our Schools”

Did you see Bob Herbert’s wonderful new article, The Plot Against Public Education, in Politico Magazine?  If not, you should read it.  Bob Herbert was a regular New York Times columnist between 1993 and 2011, when he left to join Demos and to write the book, Losing Our Way: An Intimate Portrait of a Troubled America, from which this article is excerpted.  The book was published this week.

Herbert’s subject is the role of money and the power of elites to shape education policy in America these days.  Herbert skewers Bill Gates: “When a multibillionaire gets an idea, just about everybody leans in to listen.”  And he notes that when  Bill Gates’ “small high schools” experiment utterly failed, there weren’t the kind of consequences we might see if a public school district, for example, failed in a similar school restructuring. “There was very little media coverage of this experiment gone terribly wrong. A billionaire had an idea. Many thousands had danced to his tune. It hadn’t worked out. C’est la vie.”

“This hit-or-miss attitude—let’s try this, let’s try that—has been a hallmark of school reform efforts in recent years… But if there is one broad approach… that the corporate-style reformers and privatization advocates have united around, it’s the efficacy of charter schools…  Corporate leaders, hedge fund managers and foundations with fabulous sums of money at their disposal lined up in support of charter schools, and politicians were quick to follow.  They argued that charters would not only boost test scores and close achievement gaps but also make headway on the vexing problem of racial isolation in schools.  None of it was true. Charters never came close to living up to the hype. After several years of experimentation and the expenditure of billions of dollars, charter schools and their teachers proved, on the whole, to be no more effective than traditional schools.  In many cases, the charters produced worse outcomes. And the levels of racial segregation and isolation in charter schools were often scandalous.”

Acknowledging Bill Gates’ good intentions, Herbert then tells the story of a number of school “reformers” who have been in it for greed—including Ron Packard the CEO of K12 on-line learning, a company whose founding was underwritten by Michael Milken, the junk-bond king.  And there are others.  “It was easy to lose sight of the best interests of children as corporations throughout the country did all they could to maximize profits from public education. Consider for example, the Rupert Murdoch-Joel Klein connection.”  And there is Jeb Bush, who with former West Virginia governor Bob Wise, “started an organization called Digital Learning Now!, which took on the task of persuading state legislators to make it easier for companies to get public funding for virtual schools and for the installation of virtual classrooms in brick-and-mortal schools.”  We are also reminded about Cathie Black, New York Mayor Michael Bloomberg’s hapless schools chancellor, a socialite who served for 91 days until it became clear that running a school district with 1.1 million children might be complicated. “Black had had no previous experiences with the public schools.  She hadn’t attended them… She hadn’t taught in them.  She hadn’t sent her children to them.  In one of her first public appearances after the appointment, she said, ‘What I ask for is your patience as I get up to speed.'”

Herbert concludes: “The amount of money in play is breathtaking.  And the fiascos it has wrought put a spotlight on America’s class divide and the damage that members of the elite, with their money and their power and their often misguided but unshakable belief in their talents and their virtue, are inflicting on the less financially fortunate.  Those who are genuinely interested in improving the quality of education for all American youngsters are faced with two fundamental questions: First, how long can school systems continue to pursue market-based reforms that have failed year after demoralizing year to improve the education of the nation’s most disadvantaged children?  And second, why should a small group of America’s richest individuals, families, and foundations be allowed to exercise such overwhelming—and often toxic—influence over the ways in which public school students are taught?”

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Ohio’s “Dropout Recovery” Charters Increase State’s Dropout Rate, Swallow Tax Dollars

Doug Livingston, the education writer for the Akron Beacon Journal and Ohio’s top education journalist, recently reported on the financial scam at Ohio’s so-called “dropout recovery” charter schools. These are the on-line charters that say they are serving Ohio’s most vulnerable adolescents while in reality they are, according to Livingston, making enormous profits while driving up Ohio’s dropout rate at the same time other states are significantly increasing the rate of high school completion.

It is, of course, true that these schools cater to students in danger of dropping out, but because of the way the state reimburses such schools, there is massive profit to be made. In  the first of his new series of articles Livingston explains that two-thirds of Ohio’s dropouts are from charter schools, the vast majority on-line academies that require students to sit in a cubicle with a computer for four hours a day.

In a table that accompanies his recent investigation, Livingston lists a dozen dropout-recovery charter schools with a graduation rate below 4 percent, two of them posting a 4-year graduation rate of zero percent. Seven of these schools are part of the Life Skills Academy network owned by politically connected David Brennan as part of his White Hat chain.  In a second piece, Livingston reports: “For 15 years, White Hat and its programs for high school dropouts have cornered an education market saturated with struggling students who often bounce from school to school. White Hat’s model—what founder and owner David Brennan held up as the alternative to government schools’ failing ‘one-size-fits-all’ approach—has spread to every major city in Ohio.”

“Absenteeism tops the reasons why students drop out; charter schools continue to collect tax dollars for more than a month while they are gone.” “Administrators call it churning’ or ‘school hopping’—when student drop out, disappear for months and then return.” “The state counts a dropout as an event, not as a person. If one student drops out three times in one year, that is three dropouts. It happens, a lot.” The state requires that students who are absent or truant for more than 23 days be taken off school rolls, but during that 23 days, the state reimburses the school. Livingston explains: “There were more than 11,000 removals for truancy last year, meaning taxpayers paid for perhaps 253,000 days of no student instruction, or the equivalent of 1,400 empty desks for an entire school year.”

Besides Brennan’s White Hat charter chain, there are two other primary players in Ohio’s cyber charter sector: The Ohio Virtual Academy, a K12 affiliate, and the Electronic Classroom of Tomorrow (ECOT) operated by William Lager, who has made a profit of over $100 million since 2001 from the two privately held companies he owns that provide all services to ECOT. The Ohio Virtual Academy and ECOT do not market themselves exclusively as dropout recovery schools.

Livingston reports: “In the 2012-2013 school year, more than 5,300 dropouts—a quarter of all Ohio dropouts that year—attended one of two online charter schools: the Electronic Classroom of Tomorrow or Ohio Virtual Academy. Collectively, these two charter schools have a dropout rate 45 times higher than traditional public schools, and 10 times higher than the state’s eight largest city school districts. Another 6,829 students—about a third of all Ohio dropouts—attended charter schools designed specifically for dropouts…. Last year, these dropout charter schools enrolled one percent of Ohio’s public school students but accounted for roughly the same number of dropout events as did public district schools, which enrolled 91 percent of Ohio’s students.”

A Peek into How the Education Sector Works

Many of us have the sense that profit has become increasingly involved in the world of education, but while the term “education sector” has come into our lexicon, we have only the vaguest idea about the many ways profit is driving privatization in and around our public schools.  Nor do we really understand how the for-profit education sector is wound together with the operation of laws and policies like No Child Left Behind and Race to the Top.

A new article, For Education Entrepreneurs, Innovation Yields High Returns: Learning from Larry Berger, Jonathan Harber, and Ron Packard, posted on the website of conservative Education Next, helps fill in the gaps about the growing role of venture capital and for-profit corporations in education.

Writer Julie Landry Petersen describes the struggles and frequent failures of many private education companies over the past 25 years, but contends that, “the economics of education investing are changing.  Schools are now wired and have accountability incentives to invest in technology to boost student achievement, while teachers are ready to experiment with new tools.  For start-ups, hardware costs have come down and software is cheaper than ever to develop.  Longtime education banker Michael Moe of GSV Capital says a higher quality of entrepreneurs is entering the space. Consequently, education technology companies raised $1.1 billion in funding from venture capitalists in 2012, more than double the amount raised the prior year and nearly 10 times as much as a decade earlier.”

Peterson profiles education technology entrepreneurs Larry Berger of Wireless Generation, sold in 2010 for $390 million to Rupert Murdoch’s News Corporation as the anchor of its ed-tech division Amplify, headed up by former NYC schools chancellor Joel Klein; and Jonathan Harber, founder of SchoolNet, sold to education publishing giant Pearson in 2011 for $230 million.

Both start-ups initially grew when they scrambled to discern ways to fill a technological niche when new federal laws or policies were enacted.  “Wireless Generation employees poured over the No Child Left Behind Act (NCLB) the night it was signed, looking for potential opportunities, and found that the act’s Reading First component ‘created an unusual amount of liquidity centralized at the state level (about $200 million per year) that did not already have a bureaucracy trained to spend it,’ as Berger has written.  Wireless Generation went on to secure at least 18 state contracts….”

SchoolNet, on the other hand, planned to cash in on Race to the Top as well as the need for data demanded by NCLB.  “In 2009 and 2010, states competing for Race to the Top grants began looking for ‘instructional improvement systems’ that would earn them points against the grant program’s criteria for providing teachers, principals, and administrators ‘with the information and resources they need to inform and improve their instructional practices, decision-making, and overall effectiveness.'”  SchoolNet filled the niche with “systems that could capture, analyze, and report formative data quickly to allow teachers and principals to make instructional changes accordingly, a gap that grew even wider when NCLB began to shine a spotlight on the dismal progress of student subgroups and put pressure on schools to improve their performance.”

Petersen also profiles Ron Packard, the founder and CEO of K12, the huge, for-profit, on-line academy.  Petersen’s profile of Packard and K12 acknowledges the serious criticism of this company that has made enrollment growth its priority, while ensuring neither student achievement by any generally accepted measure nor an acceptable course completion or graduation rate.  She quotes investor Whitney Tilson who advised other investors against K12: “K12’s aggressive student recruitment has led to dismal academic results by students and sky-high dropout rates.”  K12 has succeeded as a for-profit company, however, “with revenues skyrocketing from $141 million in 2007 to $848 last year, drawn mostly from its management contracts with states and districts to operate virtual and blended-learning schools, but also from operation of three private online schools paid for by parents and from direct sales of its courses to schools and districts.”  Packard’s annual salary was $670,000 plus stock options.

Those promoting privatization in education value individualism, competition, efficiency, deregulation, innovation, profits and creative disruption.  These are, of course, the values of the marketplace.

Entirely different core values underpin the public school system that has historically served our children in the United States. We have long valued public schools for civic as well as personal benefit and we have counted on a vast and stable publicly owned system designed to serve the needs and protect the rights of all children.  We would do well to consider the warning of political philosopher Benjamin Barber—who reflects on the loss of public ownership and public oversight—as we contemplate the implications of the growing privatized market for education technology and services:

“Privatization is a kind of reverse social contract: it dissolves the bonds that tie us together into free communities and democratic republics.  It puts us back in the state of nature where we possess a natural right to get whatever we can on our own, but at the same time lose any real ability to secure that to which we have a right. Private choices rest on individual power (brute force), personal skills (randomly distributed), and personal luck.  Public choices rest on civic rights and common responsibilities, and presume equal rights for all.  Public liberty is what the power of common endeavor establishes, and hence presupposes that we have constituted ourselves as public citizens by opting into a social contract.”

On a less philosophical level, there are also several really basic things that the three entrepreneurs profiled in  Petersen’s article never consider as they look for a corporate niche in our public schools. What about the school children and their need for personal connection with teachers who will nurture their learning and development?  And what about the stewardship of our tax dollars?  Should we be spending public funds for services from tech companies, for on-line schools, and for corporate profits, salaries and bonuses when we might instead, for example, hire more classroom teachers and thereby lower class size?