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ppp Thursday, 23 August, 2001, 21:45 GMT 22:45 UK
US struggles with education options
Students at St. Rose of Lima School maintain a computer under the supervision of a teacher
Charter schools promise more individualised instruction

Reform of public education has led some parents to call for privatisation as one way to cure the ills that afflict schools across the US.

In recent years, the push to privatise has become a much bandied about issue among politicians in Washington, who have searched in vain for remedies to halt falling test scores among the nation's schools.

The debate over the quality of education at taxpayer funded schools - what are termed "public" schools in the US - has raged for years. So has the struggle to improve them.

graph showing Edison Schools losses over the last five quarters
While examples of poorly performing public schools can be found in nearly every US state, the most acute problems are seen in the nation's inner-city schools, which must often struggle with antiquated school buildings, and entrenched unions and school boards.

In search of better schools

The better schools movement has been around for decades. It was not until 1992, however, that the Edison Project emerged, a for-profit organisation, as an alternative to public schools.

At its outset, Edison promised grand things, improved education through better use of students' time as well as a computer for every child.

Edison, now called Edison Schools and traded on the Nasdaq stock exchange, operates schools in two ways. In some instances, the firm receives contracts from municipalities and states to manage currently operating but failing schools.

Edison also runs what are called "charter" schools, new public schools that operate without the regulations that apply to traditional public schools. Edison operates just a tiny percentage of the US' nearly 1,800 charter schools.

Charter schools got their start in the early '90s as an alternative to traditional public schools. Parents see them as a way to improve a child's education without the steep tuition fees charged by "private" schools, institutions that do not receive taxpayer subsidies.

New York failure

Edison, which now operates 113 schools serving 57,000 students, has a mixed record of success. While it promises to better students' grades through better utilisation of time and technology, its rigid approach to education cost the firm a $50m contract to operate five New York City schools earlier this year.

In rejecting Edison's proposal, parents complained the company ignored their wishes. For that reason, the contract was awarded to much-smaller LearnNow, a competing firm that has built a reputation of building consensus among community members as it tries to reform schools.

"Edison's approach has been more top down, while LearnNow, follows a more grassroots approach with inner-city schools and involves parents and the community in their efforts," says Howard Block, senior analyst with Banc of America Securities.

Private, for-profit education companies such as Edison say they can bring to school management the type of administrative rigour not normally associated with public schools.

Teachers, parents and activists argue, however, that parents should have a say in how their schools are run. They also feel that profits should not be derived from what has traditionally been a not-for-profits enterprise.

"It's a tough operating environment with constant friction between the stakeholders - that is parents and students - and shareholders," says Tom Evans, senior analyst with Eduventures, a market-research firm specialising in education.

Not to be outdone, Edison bought LearnNow for $34m in June, adding 11 schools and over 5,000 students to its numbers. The deal closed on 1 July.

Pennsylvania's decision

While New York-based Edison has had its share of failures, cities and states from around the country still seek the firm out in the hopes of turning around troubled school districts.

Recently, Pennsylvania Governor Tom Ridge hired Edison to evaluate the Philadelphia school district's educational and fiscal management.

"Edison Schools knows what it takes to produce better educational results for children - and they know how to do it within a budget," Governor Ridge said in a written statement.

The Philadelphia contract is worth $2.7m and requires Edison to conduct an expedited two-month evaluation of the school district.

Despite landing such contracts, Edison has yet to reach profitability and does not expect to do so until 2005. On Wednesday, the firm reported a loss of $8.8m during the three-month period ending 30 June. Analysts, however, had expected a much greater loss.

Analysts also say Edison's experience shows there are no clear-cut answers to raising school test-scores. Its struggle to turn a profit may be as much a challenge as educating the kids themselves.


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25 Jun 01 | UK Politics
24 Apr 01 | UK Education
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