For Profit Schools' Public Benefits

In the heated debate over reforming U.S. public schools, most of the attention has focused on the issue of vouchers--using government funds to help parents send kids to private, usually religious, schools. The real action, however, has been elsewhere. Public schools run by for-profit educational management companies are are starting to have an impact nationwide. They are providing what the advocates of vouchers are seeking, competition within the public-school arena, without the controversy over using tax dollars for religious purposes.

While the voucher movement remains embroiled in legal controversy, the for-profit trend is growing quickly. Already 100,000 students in 200 schools are being educated under the auspices of such companies as Edison Schools, Advantage Schools, and Beacon Education Management.

For-profits are, in effect, part of the larger charter school movement. Operated independently of the rules that govern most public schools, charters are publicly funded but are free to design their own teaching environments. To do that, they are hiring the educational management companies, who change the curriculums, lengthen the school day, extend the year, offer merit pay and options to teachers, cut administration expenses, and curb red tape.

There is a downside to for-profits as well. Unlike public schools, they must pay for new schools, or rent old ones. Sports, art, music, and remedial classes are often cut to save money. And they have trouble getting experienced teachers. Truth is, hardly any are yet making any profit.

But many traditional public schools are already changing to compete. In conjunction with the charter movement, for-profit schools appear to be a powerful force in reshaping public education.

Before it's here, it's on the Bloomberg Terminal.