Saving Our Schools

Welcome to our new school. Its day is eight hours long. Two are spent in peer learning groups, and one in physical activity. Two hours are spent at an "at-school job," in the library or cafeteria, learning skills and responsibility. There are two 90-minute sessions with an electronic learning system that customizes itself to a student's academic interests. Thanks to computer and video technology, some classes have student-teacher ratios of 100,000 to 1. This means flesh-and-blood teachers have enough time to spend an hour or more every week in one-on-one work with each student.

This scenario isn't science fiction. It's a portrait of a school of the future--1996, to be exact--as envisioned by Christopher Whittle, CEO of Whittle Communications, and Benno C. Schmidt Jr., ex-president of Yale University, now CEO of Whittle's Edison Project. The Edison Project is developing a national network of 200 for-profit schools in four years, a $2.5 billion investment. Ambitious if a bit vague, the project has stirred plenty of skepticism. But whether Whittle pulls it off in 1996 is less important than what he represents in 1992: an outsider's promise of a clean slate, tapping into a sense that the U.S. public schools are such quagmires of inefficiency and incompetence that the only solution is to rebuild them from scratch.

America is fast losing faith in public education. Concern about the system is nothing new: It has been 30-odd years since the publication of Why Johnny Can't Read, nine years since the release of A Nation at Risk, a federal commission's report warning that schools are failing our children. Yet after more than a decade of effort and experiments, research and revelations, the performance of American students remains stubbornly mediocre. For the past 10 years, according to the Education Dept.'s National Assessment of Educational Progress standardized tests, the scores of 9-, 13-, and 17-year-olds in math, science, and reading have mostly remained flat. "It's like the educational system is brain-dead," says Gary W. Phillips, acting associate commissioner of the National Center for Education Statistics.

Most Americans agree--as long as it's someone else's school that we're talking about. In a BUSINESS WEEK/Harris Poll, only 39% would rate the quality of American public education overall as "excellent" or "pretty good," while 60% give high marks to the schools their children or grandchildren attended. The business community, however, is much heavier in its condemnation. Ina 1991 survey of employers, educators, and parents sponsored by the Committee for Economic Development, only 12% of employers felt high school graduates write well; only 22% said they had a good mastery of math.

Small wonder that with so many problems confronting U.S. public schools, the very assumption of the state's role in providing a standard education for all children--the aim of the "common school" developed 100 years ago--is under siege.

At one extreme are those who would dismantle the system via school choice. They would, in effect, place all schools--public, private, and parochial--on an equal footing to compete for student "customers." At the other end are those who would preserve the public school concept, albeit in changed form: They want to break the current power structure of central school administrators and grant more autonomy to individual schools. In between are a host of private-sector representatives, both profit and nonprofit, who are getting involved in schools in increasingly elaborate ways.

Some programs, such as the private-school scholarship fund established in Indianapolis by Golden Rule Insurance Co., consist of opting out. Others favor contracting out--engaging a third party to manage public schools, as Baltimore has done with Education Alternatives Inc., a private company, and Chelsea, Mass., has done with Boston University. And finally, there are programs that help out: companies using their management expertise--often backed up by funds--to design systemic reform, as Champion International Corp. is doing for middle schools in Stamford, Conn., and a business group did for Cincinnati's entire school system.

SPREADING LIGHT. Corporate America has plenty of reasons to get involved in reforming education. The most obvious is that in so doing, the private sector is ensuring good preparation for its future employee pool. Once, American workers were considered the best-educated in the world, but international test results show our kids slipping compared with their foreign peers. Also, with parents of school-age kids now heading only around 25% of American households, companies must become a key force in exerting pressure on politicians to invoke change. Along with clout, companies possess the resources for research and development--and they have the funds to test innovations. "The private sector is the only way we can hope to get the investment we need in creativity," says Benno Schmidt. "If we can invent and demonstrate new technologies and ways of managing, other schools can pick them up and adopt them."

Adoption is the key. One could argue that the real reason for the dismal school picture is not that Americans lack good ideas to reform education but that the good ideas don't spread. According to the Committee for Economic Development, there are 140,000 academic-corporate partnerships in 30,000 elementary and secondary schools--almost half the public schools in the country. Yet with a couple of exceptions--Brown University Professor Theodore Sizer's Coalition of Essential Schools, or Stanford University Professor Henry Levin's Accelerated Schools Project--there's no organized effort to implement these methods on a systematic basis. When it comes to reform, says Harold Stevenson, co-author of The Learning Gap, a comparison of Asian and American school systems: "We have all these thousands of points of light--but no illumination."

The Edison Project would provide the glow, Whittle thinks. The plan is to open 50 campuses, containing up to four schools each, in 1996. Another 50 campuses, serving 150,000 students, would follow the next year. And by 2010, they would achieve an enrollment of 2 million kids, kindergarten through 12th grade. Whittle Communications is investing up to $60 million in the Edison Project, which consists of a team designing the schools. The $2.5 billion to build them will be raised from investors. The schools will charge tuition of $5,500--about the average amount public schools spend per pupil. About 20% of the students will be on full scholarship.

Whittle's brand of educational entrepreneurship shares a lot with another break-the-mold project, the New American Schools Development Corp. The private, nonprofit NASDC will raise money from corporations (it has garnered $50 million of a projected $200 million so far) to fund 11 design teams--"sort of the defense contractors of the school industry," says Education Secretary Lamar Alexander. Their mission will be to create these designs, "then help communities create the best schools in the world."

Although no one is turning down a source of fresh ideas (not to mention fresh funding), educators are somewhat lukewarm about these ambitious programs. Alexander compares the NASDC teams' mandate to completely rethink education to General Motors Corp.'s approach to building the Saturn car. But "when GM built Saturn, they used their own people, revamped things from the inside--they didn't call in a bunch of outsiders to design and then impose something on them," says Bella Rosenberg, assistant to the president of the American Federation of Teachers.

The Edison Project's stated aim is not to replace public schools but to provide them with a workable blueprint: It will be workable because it will operate at the same cost as the public sector, its founders argue. Nevertheless, many educators don't see why public schools will copy Edison schools any more than they do private schools or innovative programs now.

Certainly, innovation abounds:

-- At Northridge Middle School in Los Angeles, teachers give assignments to small groups of students, who complete lessons as a team--a far cry from "the traditional mode of the teacher talking and everyone else hallucinating," says Ron Klemp, director of the program.

-- In Chelsea, Mass., teachers' aides make regular house calls, tutoring students and setting up family reading programs.

-- The Corporate Community School in Chicago, a tuition-free institution financed by corporate sponsors, offers courses with no grades and classes that group kids in two-year clusters.

Other districts are even inviting a third party to manage an entire school. Education Alternatives Inc. of Minneapolis has just won a $133 million contract to run nine Baltimore elementary schools, with a total of 4,815 students. The company will spend $5,549 per student, the city's average per-pupil expenditure. Baltimore turned to EAI because students' standardized test scores were so low: Of the state's 23 school districts, Baltimore ranked 19th.

The Baltimore Teachers Union originally objected to the arrival of a private, for-profit management. But "there's very little public about public education anymore," says Nathaniel Harrington, public relations director of the Baltimore City Public School Districts. "We contract out for transportation, computers, and other supplies. What we're getting from this company is simply another service."

ESCAPE HATCHES. EAI was already providing that service at South Pointe Elementary, a Miami public school that opened last fall as a showcase for the company's Tesseract method. Tesseract relies on close student/teacher contact. Two teachers--a "master" teacher and an education graduate student--are in each classroom. There are no grades. At the beginning of the year, each student gets a personal education plan to set writing, reading, and math goals.

Along with the Tesseract approach, EAI attributes its results to its third-party power to implement its methods and transfer personnel who don't perform: "Rarely is that authority vested in principals," notes David A. Bennett, EAI president. Nevertheless, some educators attribute their results to other factors. "Their being a private company has nothing to do with it," says Keith Geiger, president of the National Education Assn., the teachers' union. "South Pointe works because EAI is putting $1.2 million of its own into that school. Let's do that in every school in the U.S. and then see if they're successful."

The overwhelming nature of the problems faced by public schools has discouraged many. "I just don't think our inner-city schools are fixable," says J. Patrick Rooney, chairman of Indianapolis' Golden Rule Insurance. That belief led to the establishment of the Educational CHOICE Charitable Trust in August, 1991. Golden Rule gave $1.2 million and started requesting applications from the moderate- and low-income families who wanted to send their kids to private or parochial schools. The deal is that CHOICE will pay half of the school's annual tuition, up to $800 per student, for at least three years.

Some 71 private and parochial schools are now educating 900 CHOICE students. Jennifer Miller, 10, is one of them. Her mother, Pam, a divorcee now living on workers' compensation, was worried when she moved into downtown Indianapolis. "I didn't want to send her to a downtown school because she wouldn't have survived," she says. Jennifer enrolled in Holy Cross Central School, with CHOICE picking up half the $1,000 tuition. At Holy Cross, Jennifer gained confidence and self-esteem, mostly from being accepted by her peers. Her grades improved, too.

CHOICE has been a godsend to kids such as Jennifer. But at the Lilly Endowment, which is evaluating the fund's progress, Education Program Directors Joan Lipsitz and Cyril Kent McGuire think CHOICE will have little or no impact on Indianapolis as a whole. "I don't think removing children from the public school system will reform the public school system. We've had children pulled out of the system forever. And has it improved? No," says Lipsitz.

In fact, it could get worse. Since Indiana funds districts on a per-child basis, CHOICE works to "the fiscal disadvantage of Indianapolis public schools," says Superintendent Shirl Gilbert.

Golden Rule's CHOICE program is essentially a privately backed experiment in school choice--and the controversy it raises reflects the debate over that movement. School-choice advocates, who include President Bush, argue that assigning kids to schools by district unfairly restricts low-income families: "We don't tell people on food stamps they can only buy their food at one grocery store in town," says Lamar Alexander. "So we shouldn't tell a family, just because it's poor, that it can't make a decision about where its child goes to school." To improve the public school system, let the free market reign, the voucher advocates argue. They say competition will cause public schools to shape up or risk losing their clientele--and their funds.

GRIM IMPACT. There's some evidence that this is happening in Minnesota, which for the past four years has allowed students to attend any public school they wish--anywhere in the state. The program has hardly caused a stampede: Only 1% of the state's 500,000 kids have opted to switch. Still, since open enrollment was instituted, some high schools have introduced college-level advanced placement courses and otherwise boosted their curriculum to attract students.

Those opposing vouchers (including Democratic candidate Bill Clinton) argue such programs in effect use public moneys to subsidize private schools. While that isn't unprecedented--in Vermont, students can go to any high school at state expense if their district lacks one--there's little evidence so far that vouchers work on a larger scale. In Milwaukee, the only system currently offering a public/private choice, results have been mixed. In 1990-91, the first year of operation, seven schools enrolled 341 students, more than half of them from welfare families. Although attendance was higher than the system average, achievement test scores didn't show much progress. And 25% of the students left the program this year. "If they're voting with their feet, they're voting not to continue," says John F. Witte, a political science professor at the University of Wisconsin at Madison who is evaluating the program.

Besides, voucher critics say, free-market competition may be fine for the economy, but it won't work well in education. "Choice is triage of the worst kind"--offering an escape hatch for a few students, instead of a way to improve the school system, says Jonathan Kozol, author of Savage Inequalities, a critique of the disparities between school districts. "Even if a school's competitive instinct is up, it has less resources to compete."

For example, Massachusetts instituted a choice program among neighboring public school districts last year. While it improved educational opportunities for the 834 young participants--almost all of whom were white--the plan so far has had more fiscal than academic impact. And that impact has been grim. When a student switched from one district to another, his old district had to reimburse his new one--at the new school's cost.

So when 110 students seized the chance to flee the lower-class, industrial town of Brockton for neighboring, wealthier Avon, they brought $887,232 in funding with them. The state has since revised the program so that a community forfeits only 25% of the departing pupil's cost. Still, deprived of vital funding, school districts that are already near bankruptcy have shown no evidence of improving schools in an attempt to lure back students.

One company aiding public schools is RJR Nabisco Inc. Its five-year Next Century Schools project is giving away a total of $30 million in grants to 45 schools with innovative reform proposals. But it isn't a completely pretty picture. One problem: What happens to a school's program when the money stops? The grants run for three years, though RJR is planning to extend some aid to schools whose reforms inspire copying (and give small replication grants of around $100,000 to other schools).

Then, there have been a number of situations "where jealousy of the winning schools was quite profound," says Roger D. Semerad, president of the RJR Nabisco Foundation. One school received a $750,000 grant--only to see the school board cut its budget by exactly $750,000, Semerad says.

The Nabisco experience underlines the key problem with Next Century's motto--"Changing Education One School at a Time." "We've had magnet schools for years now. And they've been wonderful. But other schools haven't improved to compete with them. They can't, without the same attention and money," says Diana Rigden, director of precollege programs for the Council for Aid to Education. That's why meaningful reform requires an overhaul "of the whole damn state system, from the governor on down," says Rexford Brown, senior fellow for the Education Commission of the States.

Something very much like that is happening in Kentucky. In 1990, the state passed an education reform act after the state supreme court declared its education system unconstitutional, partly because of funding disparities between districts. United Parcel Service, Humana, Ashland Oil, and other corporations formed the Partnership for Kentucky School Reform to help implement changes. It has spent $2 million on information campaigns, school consultants, and forums to mediate disputes.

PRIVATE PUSH. Perhaps Kentucky's biggest change, in terms of daily operations, is the wholesale adoption of school-based decision-making. By 1996, every school will be run by a school council--consisting of parents, teachers, and principal--that will manage finances and set the curriculum. Several schools in Jefferson County were already practicing "participatory management," as the local educators call it. Among their reforms: team-teaching, multi-age classes, extra advisory periods.

Giving academic and fiscal responsibility to individual schools is being tried all over the U.S. However, as Marilyn Hohmann, principal of Louisville's Fairdale High, observes: "None of this will work in any school district unless you have powerful support from the central administration." That means the school board must move from daily micromanagement--the bane of principals and teachers--into a more long-term planning and advisory role.

When various factions all lock horns, it freezes the school system. An outside force is necessary to melt it, says Paul T. Hill, senior social scientist at the Rand Corp.--and that's a key role the private sector can play. Take Cincinnati. In 1990, its schools were in trouble. The dropout rate was almost 50%. Plagued by political battles and bumbling, the administration was unable to persuade a disgusted electorate to vote a tax increase--even though the district itself was virtually bankrupt. At the superintendent's request, a group of corporate leaders met to evaluate the school system.

Colloquially known as the Buenger Commission, after its leader, Fifth Third Bancorp Chairman Clement L. Buenger, the committee issued its report in September, 1991--and then immediately began lobbying to get its recommendations adopted. By November, it persuaded voters to approve a $9 million school-reform tax. Emergency legislation by the Ohio General Assembly allowed the district to refinance its debt--with a letter from Buenger helping speed the bill through in 58 days.

Cincinnati schools resume this fall under a much-changed administration. Half the central-office posts have been cut, and many administrators have either retired or returned to jobs in the schools--a move that will save the district $16 million over the next two years. Along with staff cuts, the system will be further decentralized by dividing schools into nine minidistricts, with one devoted to pilot programs.

Champion International, the Stamford (Conn.) paper maker, is also working at the school-district level. Impressed by a 1989 Carnegie Council on Adolescent Development report, it approached the Stamford school board, which was planning to create four middle schools. Champion offered to implement Carnegie Council ideas in them. This involved hiring a full-time consultant, financing a summer school for low achievers, and sponsoring biweekly training sessions for every middle-school teacher--a total investment of $2 million.

Since the middle schools opened in 1990, attendance rates have doubled, 15 of the 18 summer-school kids are now on the honor roll, and 93% of parents report their kids are happy at school--a rarity for the notoriously difficult junior-high years. Champion is now spreading its work to other communities that are home to its paper mills. It will continue to spend about $1.5 million per year on the programs.

The initiative works because in each case the company stuck to an advisory role. "They never indicated to us they wanted to take over. Rather, it was, 'How can we help you? Where do our goals meet?' " says Linda Hautala, principal of Stamford's Dolan Middle School.

ESCAPE ROUTES. The real challenge for reform-minded companies is to think systemically--no matter how jammed-up the system seems. Nothing else really works as a permanent, large-scale alternative to public schools. Corporate-run schools and vouchers amount to elaborate escape routes for a lucky few. And "one-school-at-a-time" reforms rarely travel well. Besides, there's always the problem of what happens to the students when the project ends.

So, education should be left to the professional educators--but with help from the private sector in providing the resources, research, and inspiration for change. "Maybe the lesson for public schools isn't literally 'adopt what we do,' " notes Whittle. "Maybe it's more, 'consider starting over.' "

There's room for all types of experiments in education. One of the consistent themes in current reforms is individualism: individual management for the school, individual power for the teacher, individual attention for the child--all with the aim of providing a good education for all children. That's the one principle of American schools that will never need reforming.

      Corporate efforts to "do something for schools" fall into several basic
      categories. Since the mid-1980s, the trend has been for business to
      move to higher and higher levels of
      The most popular type of program, existing in 40% of U.S. elementary schools 
      today. Companies provide tangible goods and services to schools such as guest 
      speakers, employee tutors, small grants, and computers from high-tech 
      corporations. Doesn't cause much fundamental reform by itself but can forge 
      closer relations
      Business tries to change one particular school or one academic program, usually 
      in a multiyear project. Might include management training for administrators, 
      school-within-a-school (as in American Express' academies of finance, travel, 
      or public services in high schools). Can make an impact but critics ask: What 
      happens when the money stops?
      An individual company or a consortium works to change a variety of practices 
      throughout a district. Groups such as the Cincinnati Business Committee's Task 
      Force on Schools and Chicago's Leadership for Quality Education often work 
      directly to decentralize school boards. Can effect some major changes but 
      requires political delicacy
      Business leaders and organizations help develop state legislation. Corporate 
      interests have influenced educational reform acts in Kentucky, South Carolina, 
      and Arkansas. The Business Roundtable promotes public school choice and other 
      educational goals in 30 states. Can result in sweeping reforms, but gains in 
      student performance take time to materialize
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